Probate is a critical legal process an executor of a Will undertakes before he or she is able to administer an estate, pay off any outstanding debts and distribute the remaining assets to beneficiaries.
The court will issue a document confirming that the Will is valid. It also confirms the appointment of the executor.
It’s officially called a grant of representation.
There are two types of these grants:
- Probate – where there is a Will.
- Letters of administration – where there is no Will (intestate).
A grant of representation gives a person the legal right to administer the estate of a person who has died.
Some small estates might not need a grant of representation. To determine whether you need to file for probate, give Ryan & Seton Lawyers a call today.
Common Probate Problems
When you apply for probate, there are a number of issues you should be aware of.
The person’s Will may be contested or challenged for a number of reasons, including if someone believes the person:
- Didn’t have the capacity to make the Will.
- Was facing undue influence when they made the Will.
Getting a grant of probate can also be delayed by:
- Problems with the Will, such as it not being witnessed properly or being damaged.
- An informal Will – a document listing a deceased person’s wishes that doesn’t meet the requirements for a valid Will.
- Using a copy of the Will – when you can’t find the original.
Other problems include:
Not identifying all of the assets – A grant of probate should be applied for within six months of death in NSW. Often, executors move too quickly in applying for the Grant and fail to disclose assets to the Court that should later be disclosed. Executors may be liable for losses if creditors or beneficiaries are harmed by this mistake and the estate will have to spend time and money to correct it.
Distributing the estate too early – The executor should aim to complete the administration of the estate within 12 months of the date of death. If the estate received income, tax returns may need to be filed. The executor will need to account for capital gains tax if property is sold. It can be challenging to recoup funds from beneficiaries if the executor distributes the estate too soon.
Delaying administration – In addition, an executor delayed in settling an estate may have to deal with impatient creditors and beneficiaries, incurring new costs. Beneficiaries may be entitled to interest after an executor’s year has expired. Executors who fail to administer an estate quickly or aren’t acting in the interests of the beneficiaries can be held personally responsible and removed from office.
Poor management of beneficiaries’ expectations – Sometimes, executors hide information from beneficiaries or make unrealistic promises to them. Executors may misunderstand the timeframes or overestimate net assets, which can lead to impatient beneficiaries becoming suspicious or difficult in the aftermath. In order to manage beneficiaries’ expectations without creating too much expense for the estate, executors need to keep an open dialogue with beneficiaries.
Failing to keep proper records – Beneficiaries should be made aware of all expenses incurred by the estate, so executors should maintain proper records. In particular, this is crucial when an executor claims reimbursement for expenses he/she has personally paid. Executors should be able to produce evidence of expenditures if a beneficiary asks for an account or questions an expense. In the absence of enough evidence, the executor could be personally liable for the expense(s) in question.
Ryan & Seton Lawyers can handle all these issues for you. Call us today for advice.
When Do You Need To Apply For Probate?
Generally you’ll need to apply for a grant of probate if:
- The assets are owned solely by the person that has died.
- Assets are over a certain amount.
You may not need to apply for a grant of probate if:
- All assets are shared with a single person. Shared assets means that the asset (eg. house, bank accounts, or shares) is jointly owned. This is often the case for people who have been married.
- The total value of assets is relatively small.
- The asset holder/s (.g. a bank, an aged care facility etc) don’t require a grant of probate to release the funds they hold.
The estate of a deceased person might require probate if they left behind certain assets. In some instances, a financial institution may ask for a grant of probate before releasing funds to the executor, such as when there is money in a bank account and the deceased was the only account holder. This is generally only required if the money is above a certain amount. See your relevant financial institution for more information.
If the deceased held real estate in New South Wales in their name alone a grant of probate will be necessary before the property can be sold or transferred.
If the deceased held many shares, the company or trading platform might require a probate grant before they will release the shares. You may also need to apply for probate if the will of a deceased person is contested. For advice on contesting a Will, or general counsel on dealing with a contested Will as an executor, Ryan & Seton Lawyers can help.
How Do You Apply For Probate?
If you are the executor of a Will and have determined that you need to apply for probate in NSW, you must first publish an online notice of your intention to apply for a grant of probate.
After waiting a minimum of 14 days, you can file your summons for probate.
Once you file your summons, you will be assigned a case number that should be used for future matters related to your case.
All applications must be filed at the Supreme Court of New South Wales registry, either in person or by post (subject to COVID-19 restrictions and amended operating procedures). The application must be accompanied by supporting documents including the will and death certificate, as well as an application fee.
The Probate Registrar of the Supreme Court publishes the current estimated processing times. At the time of writing, the current processing time is twenty business days.
If you do require a Grant of Probate or Letters of Administration, please contact us and we would be happy to assist you obtain a Grant or administer the estate. Ryan & Seton Lawyers will be by your side throughout the process.
Another thing to note is that if the person who passes has assets in multiple states across Australia or more than one country, a reseal of probate may be required. You should apply for probate or letters of administration as soon as possible. As you wait longer, the greater the chance that there will be expenses to pay for the assets. Beneficiaries may become frustrated while waiting for their payments, and if the delay is too long, you may be removed from your role as executor. The probate process also reduces the risk of fraud.
Power Of Attorney vs. Probate: What’s the Difference?
Power of attorney deals with events that happen while your loved one is alive, and will no longer have effect when they die. So, while you may be responsible for your loved one’s affairs during their lifetime, this will end at the moment of their death. After their death, responsibility for the estate passes to the executors named in the will. Or, if there isn’t a valid will in place, it generally passes to the person with the largest interest in the estate (who for the purposes of probate is called the administrator). The executor or administrator must prove that they have the legal authority to deal with the estate. To do this, they must go through the probate process. This ensures that the correct person is administering the deceased person’s estate.
What if there is no Will?
When a person dies without a Will (intestate), there is no executor to administer the estate. In these cases, the closest next of kin can apply for letters of administration. The closest next of kin can also appoint a trustee company to do this for them. Ryan & Seton Lawyers can help you with this.
Do You Need A Grant Of Probate To Access Super Or Life Insurance?
When accessing a superannuation account or claiming life insurance, you might need a grant of probate just like when accessing bank accounts. The beneficiary of a life insurance policy is generally determined by instructions, so it is not usually included in an estate. In some cases, a simple claim form or account number is adequate for dealing with the insurance company or the superannuation fund. Death certificates, birth certificates, and health records can be among these documents.
How long does probate take?
Being granted probate usually takes four to six weeks from when you apply. If more complicated information is needed or if there are questions from the registrar of probates, it may take longer to obtain a grant of probate.
For all your Will, estate management and probate concerns, please contact Ryan & Seton Lawyers – our friendly team will be happy to advise you, or take on as much of the process as you need to make it a little less stressful for you.
Probate-Related Resources And Links
Please note: The content of this blog is intended to provide a general guide to the subject matter. This blog should not be relied upon as legal advice. If you still have questions and need more information, contact Ryan & Seton Lawyers now to speak with one of our consultants and talk about your options.