Probate is a grant made by a Court that ‘proves’ the Will of a deceased person and vests title to 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 must determine the assets and liabilities, 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 on 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 adult 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.
Is a grant of probate necessary?
There is no statutory requirement to obtain probate and a grant may not be necessary for small estates. Property held jointly can be transferred to the name of the surviving owner/s by lodging the appropriate documents with the relevant authority.
Banks, financial institutions and share registries will generally release modest amounts without probate on production of the death certificate and proof of those entitled to the funds, and an indemnity releasing them from future claims. The relevant enquiries should be made with each entity.
A grant of probate is always required to transfer real estate that is not subject to a joint tenancy.
Unless the estate is small, simple and there is no risk of a claim being made against it, an executor will generally seek an application for a grant of probate.
Process
A delay in making an application of more than three years from the date of death will require an explanation to the Court.
A notice of intended application must be advertised on-line with the Supreme Court Registry at least 14 days before the application is made. This warns interested parties (creditors, family provision claimants) of the application and provides an opportunity for the relevant claim or objection to be lodged.
The following documents are filed with the Court:
- Originating Motion for a Grant of Probate;
- Affidavit of Publication of Notice and Searches;
- A copy of the advertisement;
- Affidavit of Executor with a copy of the death registration, Will and an inventory of assets and liabilities of the estate.
The affidavit sets out the relationship between the deceased and the executor, identifies the Will and death certificate and, if relevant, vouches for the deceased’s signature on the Will. The affidavit may also include information to explain irregularities, such as different spellings of names or the death of a beneficiary named in the Will. The estate assets and liabilities are disclosed by way of an inventory.
Sometimes additional documents will need to be prepared to explain unusual circumstances and an estate lawyer can advise in this respect.
Once probate is granted, the executor may commence administration of the estate.
If assets are held outside of Victoria, the grant of probate will 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, a summons and supporting documentation is filed with the relevant Court in the jurisdiction where those assets are held.
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 published providing a specified time frame for a party to notify the estate of any claim 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 six months from the date of the grant of probate before distributing assets.
An estate lawyer will explain the most appropriate means of protecting you as executor, from liability.
Administering the estate
The Will should be examined to ensure the distribution 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, 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 a beneficiary.
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 time frame 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.
If you or someone you know wants more information or needs help or advice, please contact us on (03) 9422 5439 or email laurie@irvinelawyers.com.au. We have lawyers and solicitors in Warrnambool and the northern suburbs of South Morang ready to help you.