Farm Guide VIC : 2008 - 2009
105 Succession Planning Probate and estates After the death of a person, the property they leave behind (the “estate”) must be dealt with, usually by the person or persons appointed by the deceased in their Will as the executor(s). There are a number of legal and administrative steps that need to be attended to in order to gain access to bank accounts and superannuation funds, transfer real estate and deal with other assets of the deceased. If the deceased person dies with a legal Will, it is generally necessary for the executor to apply for a Grant of Probate of the Will from the Supreme Court. A Grant of Probate is a certification by the Court that a Will is valid and registered and that the applicant has the authority to act as executor of the deceased’s estate. This will enable the executor of the Will to stand in the place of the deceased to collect the assets and pay the debts of the deceased, and to distribute assets in accordance with the deceased’s wishes as set out in his or her last Will. It is not always necessary to apply for a Grant of Probate and if you are appointed an executor of a Will you should always seek timely legal advice before you take any steps. It is possible that Probate is not necessary as certain financial institutions may often accept the production of a death certificate and a certified copy of the Will in order to transfer the ownership of assets. Where real property forms part of the deceased’s estate, unless the “right of survivorship” applies, a Grant of Probate will always be required before the property can be transferred to the beneficiaries or otherwise dealt with in accordance with the Will. The right of survivorship only applies where property is owned in joint names. In such cases, where one of the joint proprietors predeceases the other(s), the property automatically transfers to the surviving joint proprietor(s), and production of the Will or Grant of Probate is not required. Any property owned by the deceased as tenants in common with another person(s) does not enjoy the right of survivorship and therefore will be dealt with in accordance with the Will once probate has been granted. A Grant of Probate will also be necessary where the deceased had substantial assets such as shares, bank accounts and stocks and bonds. In complicated estates where there are many beneficiaries or the deceased had a wide and diverse range of assets and liabilities, it is always advisable to have a lawyer assist you with obtaining the Grant of Probate and dealing with the administration of the estate. This process can be onerous and it may save the estate a lot of time and money in the long run if proper legal advice is sought. Where the deceased leaves no valid Will or where there is no executor willing or able to act under a valid Will, it is possible for the next of kin to make application for what are called ‘Letters of Administration’. However, applications for Letters of Administration are more complicated and potentially more costly than applications for a Grant of Probate, and therefore it is always advisable to have a valid and current Will in place. Letters of Administration allow the administrator to deal with the assets of the estate in the same way an executor can. There is a hierarchy of people who can apply for Letters of Administration set out in the legislation, starting with the deceased’s spouse and then followed by their children. An executor is also required to meet various tax obligations after the date of death of a deceased. Tax returns must be lodged for all indirect taxes as well as for all income, profits or gains of a capital nature or of any other nature prescribed by legislation. Such tax returns would include amounts received that would have been assessable to the deceased had they been received during his or her lifetime. The executor should consult with the deceased’s accountant or other relevant professional to ensure that all the tax requirements are dealt with properly. By Renishka Naidoo, Managing Partner of Slidders Lawyers.
2009 - 2010