What is Probate?
The death of a loved one, whether expected or not, is a time of great sadness. It can also be extremely stressful and full of uncertainty. Many people have never experienced the death of a loved one before, and do not know what to do or what to expect. So, we’re going to take you through the process.
What Is A Grant of Probate + When Is It Required?
When an individual dies and leaves a Will, an Executor is appointed in that Will. The Executor is the only person entitled to manage the affairs of the deceased, including planning the funeral, accessing bank accounts and selling property/properties.
Formally speaking, a Grant of Probate is a document that is issued by the Supreme Court that gives the Executor the right to deal with the assets of the Estate. Generally, any Estate that has assets over approximately $20,000 will be required to obtain a Grant of Probate before any asset holder will release the assets.
It is important to note that a Grant of Probate is always required before land can be sold or transferred.
When Is A Grant of Probate Not Required?
The main occasion when a Grant of Probate is not required is when assets are held jointly with another person (usually a spouse). When this is the case, ownership of the asset/s automatically transfers to the surviving joint holder. Examples of this are:
- Joint bank accounts;
- Joint shareholdings; and
- Property that is held as joint proprietors (as opposed to tenants in common).
The other occasion when a Grant of Probate is not required is when the assets of the Estate are minimal and the asset holders are prepared to waive the requirements. This is generally only the case with bank accounts.
What Is Involved In A Grant of Probate?
Once it has been determined that a Grant of Probate is required, many people still feel overwhelmed as they do not know what is involved in obtaining the Grant. The process can easily be broken down into a number of steps which should make things feel less overwhelming, so let’s go through them.
Step 1: Who Can Apply?
As mentioned above, the person or persons who are appointed as the Executors in the deceased’s Will, apply for Probate. If more than one person is appointed, multiple people can apply, or it can be agreed that only one or two people will apply.
Step 2: Gathering Information
The first thing that we like to do once an Executor provides instructions in relation to an Estate is to write to all the asset holders (banks, share registries, investment holders etc.) to obtain information about the assets and the amount(s) held. This should be done because, firstly, we need to determine whether a grant is required and, secondly, the probate application needs to reflect the deceased’s wealth as at their date of death.
Step 3: Advertisement
Once it has been agreed on who will apply for Probate, an advertisement must be placed on the Supreme Court website. It is usually preferable to have the death certificate before the advertisement is placed so that we can be sure all the details match. The advertisement needs to be on the Supreme Court website for 14 days before the Probate Application can be lodged with the Supreme Court.
Step 4: Probate Application
Once we have gathered all the information, we prepare the Probate Application. This involved an affidavit by the Executor setting out material facts in relation to the application. It also involves an ‘Inventory of Assets and Liabilities’ which breaks down the assets of the Estate and the value as at the date of death. This application is signed by the Executor and lodged with the Supreme Court. The Supreme Court reviews the application and, if they are satisfied, will make the Grant.
Step 5: Executor’s Duties
Once the probate application is granted by the Supreme Court, the Executor must start to call in the assets of the Estate; close bank accounts, sell or transfer shares, and sell or transfer property for example.
An Executor generally has one year (an Executor’s year) to obtain the Grant of Probate and transfer the assets. If they take longer than this, a beneficiary could question the delay.
Step 6: Executor’s Responsibilities
When an individual agrees to be an Executor, they do take on personal liability and responsibility.
- Creditors Notice
An Executor is personally liable to pay any debts of the deceased (unless the Estate is considered to be insolvent). In most cases, Executors have a relationship with the deceased (mother, father, spouse, child) and are therefore aware of any debts that need to be repaid. However, there are some cases when an Executor is not aware of this. In these circumstances, an Executor can place a Creditor’s Notice in the Government Gazette which gives the creditor 90 days to come forward. If they do not do so, an Executor is no longer personally liable.
- Part IV Claim
There are many situations where a deceased person has left out a person whom they possibly should have provided for (for example a child) or they have only given them a minimal amount. In these circumstances, a person has six months from the date of the Grant of Probate to make a claim against the Estate.
If an Executor distributes the Estate within this timeframe, they can be personally liable to satisfy a successful claim. It is for this reason that it is recommended to Executors that they do not distribute within this timeframe.
Step 7: Tax Returns
If the deceased was lodging tax returns at the date of death, it is the Executor’s responsibility to ensure that these are completed, up until the date of death of the individual. Any tax must be paid from the Estate and any refund received is paid into the Estate and distributed amongst beneficiaries.
Step 8: Distribution of Estate
Once all of these hurdles have been overcome, it is time to distribute the Estate. The Estate must be distributed in accordance with the Will. We often have people come to us and say that the deceased person “would have wanted” a particular person to receive a share in the Estate. If it is not written in the Will, it cannot be done (obviously, there are always exceptions).
An Executor must distribute the Estate as soon as possible after the above timelines have been satisfied.
Letters of Administration
Letters of Administration is an application that is made when an individual dies without a Will. When this is the case, it is the person most entitled to share in the deceased person’s Estate who is eligible to make the application. If this person is a minor, it is the minor’s next of kin who is eligible to make the application.
Help From Canny Legal with Wills + Estates
Canny Legal is here to help navigate the somewhat daunting process that ensures when a loved one passes away, it is as easy and stress-free as possible. We ensure that during this great time of sadness, to do everything we can to make the process as uncomplicated as possible.
Get in touch with our team to find out how we can help.