Probate is a grant made by a Court that ‘proves’ the validity of a Will of a deceased person and vests title to the deceased estate assets in the executor/s. This is the official process that allows the executor to deal with the deceased’s estate.
As the legal personal representative of the estate, the executor named in the Will must, arrange the funeral and burial or cremation, determine the assets and liabilities of the estate, liaise with debtors, creditors and beneficiaries, sell, transfer and distribute assets and finalise the estate in accordance with the Will.
The executor is often guided by a lawyer who provides professional advice to ensure protection from liability and to deal with any complications or claims made against the estate.
If the deceased died without a valid Will or the Will appointed an executor who is unable to fulfil that position, an interested person (usually a spouse, partner or child) may apply for letters of administration.
This article explains the process of obtaining a grant of probate where there is a valid Will, and what is involved in administering the estate of a deceased.
Is a grant of probate necessary?
There is no statutory requirement to obtain probate and a grant of probate may not be necessary for small estates. Property held jointly by the deceased with another person can usually be dealt with and transferred to the name of the surviving owner/s by lodging the appropriate documents with the relevant authority without the need for a grant of probate.
Banks, financial institutions and share registries will generally release modest amounts from a deceased’s bank accounts without probate on production of the death certificate and proof of those entitled to the funds, as well as an indemnity releasing them from future claims or any wrongdoing if the funds are later found to have been wrongfully paid. The relevant enquiries should be made with each entity holding assets to determine whether a grant of probate is necessary.
In South Australia a grant of probate is always required in order to transfer real estate that is not subject to a joint tenancy.
Unless the estate is small, simple and there is no risk of any claims being made against it, an executor will generally seek an application for a grant of probate.
Process
The following documents are filed with the Court:
- Executor’s Oath (the Probate Application);
- Affidavit of Assets and Liabilities;
- Certificates for each of the assets held (including Registrar’s certificates, if relevant);
- Original Will and death certificate.
The executor’s oath states the name of the testator (as well as any other names used by the testator), his or her occupation and last known address, and identifies the Will and, if relevant, vouches for the deceased’s signature on the Will. It includes a sworn statement that the deceased held assets in South Australia.
Sometimes additional documents will need to be prepared to explain unusual circumstances relating to the will such as evidence that the will has been in some way tampered with or altered and an estate lawyer can advise in this respect.
The affidavit of assets and liabilities discloses the estate assets and liabilities by way of an inventory. The executor has a continuing obligation to ensure that all estate assets and liabilities are disclosed to the Court.
Once probate is granted, the executor may proceed with the administration of the estate.
If assets are held outside of South Australia, the grant of probate may need to be ‘resealed’ in the relevant jurisdiction to deal with those assets. This is a procedural matter in which a copy of the original grant, together with a summons and supporting documentation is filed with the relevant Court in the jurisdiction where those assets are held. A grant of probate made in each Australian jurisdiction will generally be accepted in each other Australian State for the purposes of any reseal.
Protecting executors
Executors may be liable for losses sustained by beneficiaries through negligence or delay in administering an estate but must also ensure that all claims are considered before distributing estate assets. To protect an executor from liability for potential claims by creditors, a notice is often published providing a specified timeframe for a party to notify the estate of any claim (such as monies alleged to be owed by the estate) prior to its distribution.
The possibility that a family provision claim may be made on the estate must also be considered. In such cases it is prudent to wait for a period of six months from the date of the grant of probate before distributing the assets of the estate unless there is agreement by all interested parties and potential claimants.
An estate lawyer will explain the most appropriate means of protecting an executor from liability.
Administering the estate
The Will should be examined to ensure the distribution of the estate is in accordance with its provisions. Understanding the correct interpretation of a Will’s terms can be confusing and an estate lawyer will assist with explaining the proper construction of the Will.
The executor and beneficiaries should receive appropriate legal or financial advice when transferring / receiving assets to ensure that stamp duty, capital gains tax, land tax and other taxes are considered.
Executors should also be mindful of their duty to protect and preserve estate assets and to ensure that appropriate insurance, where relevant, is in place.
Estates that include business interests will require additional attention – the business may need to be wound up, or the interests sold or transferred to one or more beneficiaries.
Prior to distributing assets, the executor will need to be certain that:
- the debts of the estate have been ascertained and paid in accordance with the statutory order for payment of debts;
- funds are retained in the estate for contingent expenses such as taxes and other fees;
- all beneficiaries have been identified and provision (if relevant) made for holding a minor beneficiary’s share in trust;
- the estate is not distributed until all creditors are identified and the requisite timeframe has expired for an eligible person to make a family provision claim;
- a proposed distribution statement has been prepared and approved, particularly where there are multiple beneficiaries;
- beneficiaries who are receiving insurable assets have arranged insurance cover in their own names before cancelling existing policies.
Conclusion
Applying for probate and administering an estate is an important function, and for many executors and beneficiaries, the process can seem tedious and daunting.
However, these processes are in place to ensure that executors and beneficiaries are protected and that the testamentary wishes of a deceased person are properly carried out.
Source – Donlan Lawyers
