Deceased Estates

The person’s estate and wishes are administered by an executor, who is a person appointed by the deceased in his or her Will to administer the estate. This is usually a responsible person in the deceased’s family or a professional.

If the deceased died without a Will, an administrator will administer the estate.  An administrator is usually the deceased’s next of kin.

As executor has a number of jobs to do in administering an estate. The scope of their duty will depend on a number of factors including:

• whether the deceased had a Will
• their assets – how many and what type?
• their liabilities – to whom?
• their family situation – has everyone been provided for who would expect to be?

You do not have a legal obligation to accept the appointment as an executor. If you do not wish to act, you can renounce your executorship and a substitute executor (if named in the Will) will act in your place.

The laws of intestacy in Victoria establish the order of priority for potential beneficiaries of an estate. This can be complicated and can be costly, and we would suggest that where someone has died without a valid Will, legal advice be obtained.

A Grant of Representation is a legal document issued by the Supreme Court, which enables the executor or administrator to deal with the estate assets.  The Grant is proof that the person named in the Grant is entitled to collect and distribute the estate of the deceased so it can be provided to banks and government institutions etc by the executor or administrator to show that they have the power and right to administer the estate.

It allows the deceased’s money held in banks, managed funds and so forth to be collected, their debts to be paid, and their property to be sold or transferred.  

There are different Grants available, the most common being:

• Grant of Probate; and
• Letters of Administration.

If the deceased owned only jointly held assets, then a Grant is usually not required to transfer these assets.

Generally it is the deceased’s next of kin who will apply for letters of administration however, the court will usually grant administration to the following next of kin in order of priority:

• the spouse or de facto spouse of the deceased;
• spouse and children;
• children;
• parents;
• brothers and sisters;
• grandparents;
• aunts and uncles; or
• any other person the Court thinks fit.

However if more than 3 years from the deceased’s date of death, you will need to provide reasons for the delay in your Application. 

There are certain steps an executor or administrator must do when dealing with an estate and an application for a Grant of Representative. These include:

• reviewing the deceased’s final Will (if any);
• ascertaining the deceased’s assets and liabilities as at their date of death;
• determining whether a Grant of Representation is needed;
• If a Grant is required, which type is necessary;
• advertising the intention to apply for a Grant;
• preparing the relevant Application and supporting documents required;
• filing the Application with the Probate Office;
• receiving the Grant and redeeming any assets such as bank accounts, superannuation, etc.;
• finalising any remaining taxation issues; and
• transferring or distributing the estate assets in accordance with the deceased’s Will or intestacy laws.

Depending on the assets owned by the deceased at the time of death, and what is stated in the Will, this could include closing their bank accounts, obtaining payment of any death benefit payable under a superannuation policy, selling or transferring assets to the beneficiaries, including real estate and shares.

If assets are liquidated, a bank account will have to be opened in the estate’s name, into which any sale proceeds should be deposited, and from which creditors must be paid.

Once the assets have been collected, you will need to ascertain the debts owed by the deceased at the time of death. This includes funeral expenses and income tax.  If you have paid for expenses relating to the estate, you are entitled to claim reimbursement.  

You must also finalise any tax returns for the deceased, as well as for the estate (if required) and pay any outstanding income tax owing to the Australian Taxation Office.

Once all debts have been paid, you can distribute the assets to the beneficiaries in accordance with the Will (or intestacy rules if there is no Will).  It is important to administer the estate accurately, as some family members may be aggrieved if they are not provided for.

As the executor/administrator, you must prepare a report and Statement of Account for the beneficiaries showing details of the assets, proceeds of any sale of assets, and expenses paid.

Any payment to an executor is referred to as a commission and in Victoria, it cannot exceed 5% of the total value of the estate assets.