Probate is a grant made by the Supreme Court of New South Wales that ‘proves’ the validity of a Will of a deceased person. This is the official process that enables the executor named in the Will to deal with the deceased’s estate.
As the legal personal representative of the estate, an executor must determine the assets and liabilities, liaise with debtors, creditors and beneficiaries, sell, transfer and distribute assets (as relevant) and generally finalise the estate according to the Will. The executor should maintain written records and, where necessary, file estate tax returns.
If a person dies without a valid Will, or their Will appoints an executor who is unable to fulfil that position, an interested person (usually an entitled beneficiary – spouse, partner, child) may apply for letters of administration. This involves additional procedural steps.
This article provides an overview of the probate process in New South Wales where there is a valid Will. The information is general only and we recommend obtaining professional advice relevant to your circumstances.
Is a grant of probate necessary?
Technically, there is no statutory requirement to obtain probate and a grant may not be necessary for small estates.
Property held jointly (for example, real estate owned by spouses or domestic partners and held as ‘joint tenants’) can be transferred to the name of the surviving tenant by lodging the appropriate documents with the relevant Lands authority.
Financial institutions will generally release funds to a certain amount on evidence of the death of the deceased, proof of those entitled to the funds and an indemnity releasing the financial institution from future claims. This is not always the case, however, and enquiries will need to be made with the relevant institution.
Generally, unless the estate is small and simple and there is no risk of a claim being made against it, an executor will seek an application for a grant of probate.
Process
An application for probate should be made within six months of the testator’s death. Delays will usually require an explanation to the Court.
A notice of intended application must be published online with the Supreme Court Registry at least 14 days before the application is made. This warns interested parties (i.e., creditors and family provision claimants) of the application and provides an opportunity for the relevant claim, objection, or caveat to be lodged.
The following documents are prepared and filed with the Court:
- Summons (or application) for probate
- Will and any codicils
- Affidavit of executor/s attaching the death certificate and an inventory of assets and liabilities
The affidavit sets out the relationship between the deceased and the executor, identifies the Will and, if appropriate, attests to the deceased’s signature on the Will. The affidavit includes details of the beneficiaries and any additional information to explain irregularities or unusual circumstances (for example, different spellings of names or the death of a beneficiary).
The affidavit discloses the estate assets and liabilities, and the filing fee is determined according to the estimated value of assets.
Protecting executors
Executors have a duty to uphold the provisions of the Will and to distribute the assets in accordance with the testator’s wishes. They must act with care and diligence as they may be held liable for losses sustained through negligence or delay. Before distributing assets, however, executors must ensure liabilities are met and there are no claims on the estate. Consequently, a notice of intended distribution should be published, giving potential claimants and creditors a specific timeframe to make a claim. This helps protect the executor from liability provided the requisite notice period has expired before distribution.
Administering the estate – dealing with the assets and liabilities
Once probate is granted and the period in the notice of intention to distribute expires, the executor may deal with the estate assets.
The Will should be carefully examined to ensure the proposed distribution is in accordance with its provisions. This may be obvious, however, occasionally there is uncertainty regarding some of the terms. The construction of the Will should be properly explained and understood.
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 and trustees (if the Will creates a trust) may need to be guided by professionals regarding the appropriate timing for the sale or transfer of significant assets such as real estate and shares. They should also be mindful of their duty to protect and preserve estate assets and to ensure that appropriate insurance, where relevant, is in place. Additional considerations are necessary if the estate involves business interests.
Key matters for executors to keep in mind before distributing assets include ensuring 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 professional fees
- all beneficiaries have been identified and provision (if relevant) made for holding a minor beneficiary’s share in trust
- the minimum notice of distribution period has expired, and any claims have been considered and dealt with
- a proposed distribution statement has been prepared and approved by all beneficiaries
Conclusion
Applying for probate and administering an estate is an important function, and for many executors, the process can seem daunting.
An experienced estate lawyer can provide professional advice to help alleviate the burden by ensuring the correct processes are followed, any complications are dealt with, and the estate is correctly administered.
If you or someone you know wants more information or needs help or advice, please contact us on 02 9792 8413 or email [email protected].