This Basic Guide is intended to provide a general overview of the steps involved in administering a deceased estate in NSW.
After someone close to you dies, it is hard to deal with something like the administration of their deceased when you are grieving. This can make it a really challenging task and one that you should definitely seek professional help with.
You should contact us at Craddock Murray Neumann Lawyers for assistance with a specific deceased estate if you have to administer one, but we have also compiled this step-by-step general guide. What follows is a summary of what is commonly involved in a typical uncontested deceased estate administration process.
However, if there is a dispute about the deceased estate, legal advice will need to be sought straight away.
1. Arrange the funeral
The first step in administering a deceased estate is usually the need to organise the deceased’s funeral.
The deceased may have left instructions or expressed about their funeral arrangements wishes in their Will or in some other document. The deceased might also have purchased a pre-paid funeral plan. It is important to look for a Will or other documents amongst the deceased’s personal papers and to speak to other family members to see what they know about such arrangements.
If there is no pre-paid funeral plan, or there is one but it doesn’t adequately cover the full cost of the funeral, the invoice from the funeral director can be presented to the deceased’s bank to see if the bank will arrange payment from the deceased’s bank account. Otherwise, whoever pays the funeral expenses can seek reimbursement from the deceased estate once the estate is administered.
2. Find out if the deceased left a Will
Along with arranging the funeral, you need to establish whether or not the deceased made a Will. It may be that you or other family members already know this and know where the original Will is kept. Otherwise, you will need to search amongst the deceased’s personal papers for the Will or a copy of it or clues as to where the deceased may have kept it.
Other places to look for it are in the safe custody of the deceased’s solicitor or the bank or building society used by the deceased (such as in a safe deposit box). Sometimes Wills are stored with the Supreme Court of NSW or with the NSW Trustee and Guardian.
It is important to ensure that you find the most recent Will made by the deceased. People often make more than one Will in their lifetime and each one made will revoke the previous one. It is the most recent Will that should be submitted for a Grant of Probate.
If you find the Will, you will see that it appoints one or more people to act as Executor, whose job it will be to administer the deceased’s estate. If that person is not you, then the person or persons appointed as Executor will need to be notified as soon as possible.
If you can’t locate a Will, you will need to promptly seek legal advice about who would be the most appropriate legally permitted to administer the deceased’s estate.
3. Obtain the death certificate
A death certificate is an essential document to have in order to administer a deceased estate. In NSW, they are obtained from the Registrar of Births, Deaths and Marriages. The funeral director is usually the person who arranges the application for a death certificate with you. It can take anywhere from 2 – 6 weeks for the death certificate to be issued.
4. Identify the deceased’s assets and liabilities
The Executor appointed in the Will, or the person applying for Letters of Administration if the deceased did not leave a Will, must make inquiries to establish what are the deceased’s assets and liabilities. This is essential for any application for a Grant of Probate or Letters of Administration.
Details of the deceased’s personal assets and liabilities can hopefully be gained from going through their personal papers and speaking to the deceased’s family members, solicitor or accountant.
It is important to get details of assets that were both solely owned by the deceased and those that are jointly owned with someone else. The kind of assets the deceased may own will usually include real estate, bank accounts, shares, superannuation and life insurance policies. There may also be entitlements owed by the deceased’s employer or business that also need to be ascertained.
Our Wills and Estates lawyers at Craddock Murray Neumann can also assist you with Inquiries to banks and financial institutions and in carrying our searches to ascertain ownership details of real estate and other assets as well as details of liabilities such as mortgages and credit cards.
We can also help to untangle details of what assets and liabilities are personal to the deceased and what ones may belong to a company or trust as part of the deceased’s business activities.
5. Apply for a Grant
To be able to legally administer the deceased’s estate, depending on the value and nature of the deceased’s assets, it will usually be necessary to apply to the Supreme Court of NSW for a Grant of Probate (or a Grant of Letters of Administration in certain other circumstances, including when there is no Will).
The Grant made by the court confirms the appointment of the Executor or the Administrator, gives them legal authority to deal with the deceased’s assets and liabilities and includes an inventory of the deceased’s assets. In the case of Probate, it also confirms the validity of the deceased’s Will.
In cases where the only assets of the deceased are jointly owned with someone else (e.g. their spouse) as “joint tenants”, a Grant of Probate will not be required because the co-owner will automatically become the sole owner by “right of survivorship”. A Grant of Probate will be required in cases where the deceased was the sole owner of real estate or other assets above a certain value.
Applications for a Grant of Probate or Letters of Administration should be lodged within 6 months of the date of death, otherwise the court will require an explanation for the delay.
6. Gathering in the deceased’s assets after the Grant
After obtaining the Grant of Probate or Letters of Administration, the Executor or Administrator must then gather in all of the deceased’s assets.
This could involve doing things like closing bank accounts, arranging payment of superannuation death benefits, seeing to the payment of life insurance proceeds, selling real estate or share portfolios and distributing the proceeds or transmitting the ownership of those assets to beneficiaries.
The Executor or Administrator should also identify any debts owed to the deceased and take steps to recover payment from the relevant debtors as part of gathering in the deceased’s assets. In cases where a beneficiary owes a debt to the deceased, that debt may have to be set off against the beneficiary’s inheritance entitlement.
7. Ensuring payment of the deceased’s tax and other liabilities
After gathering in the deceased’s assets, the Executor or Administrator will have to ensure payment of any debts and taxes owed by the deceased.
This will involve the executor or Administrator engaging the deceased’s accountant or another tax advisor to see whether a final income tax return must be lodged by the deceased and/or by the deceased estate.
If the deceased lodged tax returns, this means ensuring that all tax returns are submitted up to the date of death, and that any outstanding income tax owing to the Australian Taxation Office is paid.
Depending on the assets of the estate, the estate itself may also need to pay tax. If this is the case, an estate tax return will need to be lodged and any tax owing paid.
Any debts owed to banks (e.g. mortgage or credit card debts) or to anyone else will also have to be ascertained and paid before the estate proceeds can be finally distributed. Provision must be made in this regard for payment of professional fees to accountants or lawyers.
8. Distributing the remaining balance of the estate to beneficiaries
Once the Executor or Administrator is sure that all outstanding debts and tax have been paid from the estate’s assets, the remainder of the assets can be distributed to the beneficiaries in accordance with the terms of the deceased’s Will if Probate of the Will was obtained.
In the case of an “intestate” estate administered pursuant to Letters of Administration, in the absence of a Will the beneficiaries of the estate are determined in accordance with relevant legislation (in NSW this means Chapter 4 of the Succession Act 2006).
Craddock Murray Neumann Lawyers can help you
For legal advice on matters relating to Wills and Estate Administration, or if you have a question relating to anything in this article, please do not hesitate to get in contact with one of our Wills and Estates lawyers at Craddock Murray Neumann.
Craddock Murray Neumann Lawyers has many years of experience and provides expertise in all areas of Wills and Estates and the administration of deceased estates.
With our expertise and guidance, we can take a lot of the stress and worry out of this unwelcome but necessary part of dealing with the death of a loved one and make it a lot easier and more understandable for you.
Our team will be able to assist you throughout the estate administration process, including providing advice on whether a Grant of Probate or Letters of Administration is required and preparing the necessary application to the Supreme Court for you.
For more information on how our Wills & Estate Planning lawyers can help you, please contact our team at craddock@craddock.com.au.