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After someone close dies, dealing with their estate can be challenging for those left behind. In New South Wales (NSW), managing and distributing a deceased’s assets is governed by various legal procedures, with Probate playing a crucial role.
Obtaining a Grant of Probate from the Supreme Court of NSW is often a fundamental step in the estate administration process, ensuring that executors can prove their authority to administer the deceased’s Will to asset holders and other institutions.
This blog aims to demystify what happens after Probate is granted in NSW, guiding executors with useful information.
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Understanding Probate in NSW
A Grant of Probate is a legal document issued by the Supreme Court of NSW that validates the deceased’s Will and authorises the named executors to manage and distribute the assets in their estate.
Executors apply for Probate of the Will by submitting an application to the Supreme Court via its online Platform. The purpose of the application is to prove that the deceased person left a valid Will and to identify the assets and liabilities in their estate. This process requires meticulous attention to detail, ensuring complete and accurate information is provided to the Court.
Probate Applications in NSW consist of the following documents:
- Summons for Probate
- Affidavit of Executor(s)
- Certified Copy of Death Certificate
- Inventory of Assets
- Supplementary Affidavits (if any)
- Original Will (marked)
In cases where there is no Will, an application for Letters of Administration is made instead and the deceased’s estate is distributed according to the laws of intestacy. If there is a Will, but there are no executors to apply for Probate, an application for ‘Letters of Administration with the Will Annexed’ can be made. The applicant is usually the beneficiary(s) with the largest interest in the estate.
Learn more about Probate in NSW by reading these blogs:
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Next Steps Following the Grant of Probate
Once the Supreme Court of NSW grants Probate, executors can focus on administering the estate. The Grant of Probate is a green light, indicating to asset holders and other institutions that the Court has validated the Will and the executors’ authority to act on behalf of the estate.
Estate administration involves three general steps:
- Collecting all property and assets
- Paying any debts
- Distributing the assets according to the Will
While executors can administer the estate as soon as Probate is granted, many opt to publish a Notice of Intended Distribution on the NSW Online Registry before distributing any assets. This notice informs the public that the executors intend to distribute the estate once:
- Six months have passed since the death of the deceased
- The Notice has been published for 30 days
Persons wishing to claim against the estate generally must do so within the specified time frames. Once the Notice of Intended Distribution has been published for 30 days, and 6 months have passed since the date of death, executors can distribute the estate, considering only the claims they are aware of at that time.
Responsibilities of the Executor in NSW
Once Probate is granted by the Supreme Court of NSW, the executor steps into a pivotal role, shouldering the responsibility of ensuring that the deceased’s wishes, as outlined in their will, are honoured. This role encompasses various duties, from dealing with financial institutions to distributing the estate’s assets to the beneficiaries.
Dealing with financial institutions is fundamental. After receiving the Grant of Probate, most executors will open a deceased estate account and conduct much of the estate administration through it. This step is crucial as it unlocks access to the deceased’s funds, allows for estate-related payments to be made and received, and facilitates distributions to beneficiaries as the estate is being finalised.
Another significant responsibility is valuing the estate, including real estate, personal property, and any investments. Whilst the value of assets at the date of death is important for Probate, their current value is critical for the estate administration, especially when calculating the distribution of assets to beneficiaries and any tax liabilities.
Administering the estate also involves paying off any outstanding debts. Executors must ensure that all of the deceased’s liabilities, including utility bills, credit cards, and loans, are settled before making final distributions to beneficiaries. It might require liquidating some assets of the estate. It’s a delicate balance to maintain, as the executor must also consider the beneficiaries’ interests and the deceased’s intentions as expressed in their Will. Where assets are sold in the estate, there may be capital gains tax implications. These must be factored in before final distributions are made to beneficiaries.
Learn more: What Does an Executor of a Will Do?
Distributing the Assets
Once debts are paid and tax liabilities calculated, executors can distribute the net estate to the beneficiaries according to their entitlements in the Will. Executors distribute the estate by transferring ownership of assets to the beneficiaries. It could involve transferring titles for real estate, transferring the ownership of shares or other investments, allocating funds from the deceased’s bank account, or physically handing over personal property. The process requires meticulous record-keeping, ensuring that each beneficiary receives their rightful share.
This phase of estate administration can be complex, especially when dealing with specific bequests or many beneficiaries. Executors must also be mindful of the potential for disputes among beneficiaries regarding the distribution of assets. Clear communication and adherence to the terms of the Will are crucial for navigating this stage successfully. Whilst beneficiaries have limited rights in relation to how the estate is managed, they can sue the executor if they feel the estate has been administered incorrectly or there has been a breach of legal obligations.
Special Considerations in Estate Administration
Administering an estate can be complicated. Executors may encounter complex assets, such as businesses, overseas properties, or digital assets requiring special handling. Each type of asset may have its own legal and tax implications, and navigating these successfully calls for a thorough understanding of the assets themselves and the relevant laws.
For instance, if the deceased owned a business, the executor needs to consider its structure, value, and any succession plans in place. Overseas properties may involve dealing with foreign legal systems and tax regulations. Digital assets, including social media accounts and digital currencies, are emerging with evolving legal frameworks. Executors must tread carefully, often seeking expert advice to handle these assets correctly.
Disputes among beneficiaries are another area requiring careful navigation. While the executor’s role is to administer the estate according to the Will, disputes can arise over the interpretation of the Will, the valuation of assets, or the distribution process itself. Effective communication and mediation skills can be invaluable in these situations, helping to resolve conflicts amicably. In some cases, legal intervention may become necessary to settle disputes.
Finalising the Estate Administration
Once all debts have been paid, taxes settled, and assets distributed, the executor’s work is nearing completion. The final accounting is a crucial step, requiring the executor to prepare a detailed report of all actions taken to administer the deceased’s estate, including the following matters:
- Sale of assets
- Tax liabilities
- Payment of debts
- Expenses incurred during the administration process
- Distributions made to beneficiaries, including interim and final
This report is shared with the beneficiaries and, in some cases, filed with the Supreme Court of NSW.
Another step to consider is obtaining a release from the beneficiaries, acknowledging that they have received their entitlements and have no further claims against the estate. This release protects the executor from future claims regarding their estate administration.
Conclusion
Administering an estate after Probate is granted in NSW involves a series of tasks that can be complex and often emotionally challenging. From dealing with financial institutions, valuing assets, and paying off debts to distributing the estate, executors carry a significant responsibility. The process requires a thorough understanding of the estate, legal and tax implications as well as sensitivity to the needs and emotions of the beneficiaries.
While this guide offers a general overview of what happens after Probate is granted in NSW, each estate is unique. Executors often benefit from seeking professional advice, especially where there are complex assets or disputes amongst beneficiaries. Legal professionals specialising in estate administration can provide valuable guidance, ensuring that the estate is administered efficiently, according to the deceased’s wishes and in full compliance with the law.
Frequently Asked Questions
Note: The information provided is general in nature and is intended to offer an outline only. It is not comprehensive, nor does it constitute legal advice.
Once Probate is granted in Australia, banks have the proof they need to identify who is authorised to manage the deceased’s estate. Once provided with the Grant of Probate, Banks will take instructions from executors regarding the release of funds, with timeframes determined by their policies and procedures.
Note: Often, banks will process transfers, including distributions to beneficiaries, on the same day the request is made.
Beneficiaries can expect to receive their inheritance 6 to 12 months after Probate is granted in NSW, depending on the complexity of the estate.
Executors are generally expected to finalise an estate within 12 months of the Grant of Probate being issued by the Supreme Court. This is known as the ‘Executor’s Year’.
If Probate is required to administer the deceased’s estate, receiving inheritance money in Australia typically takes 6 to 12 months on average. However, complex estates may take longer to finalise.
If Probate is not required, beneficiaries can receive their inheritance much faster. The timeframe will depend on who is entitled to administer the deceased’s estate and the policies of the institutions holding the money.
Executors are generally expected to settle an estate within 12 months in Australia. This is known as the ‘Executor’s Year,’ but complex estates may take longer to finalise.