Probate is the legal process of application and obtaining the Court’s authorization to administer a deceased person’s estate. The beneficiaries or persons named as executor of the Will can apply for the right of probate.
What is a Deceased Estate?
In law, when a person dies, a trust is automatically created in the name of the deceased person. The trust owns the deceased persons estate – their assets and debts. The trust is referred to as “The Estate of the Late <deceased’s name>”. If the deceased person had a Will the estate is appointed an Executor named in the Will. If there is no Will the closest relative can apply to the Court’s probate registry to become the Administrator of the deceased estate.
The Executor/Administrator of the Estate has the responsibility to take control and secure all the property and personal belongings of the deceased, pay debts and distribute the estate to the beneficiaries.
How Can I Write My Last Will & Testament?
What is Probate?
When a person draws up a Will, they need to appoint someone to administer their estate when they die. This person is known as the Executor. The Executor is responsible for carrying out the terms of the Will. The executor will sometimes need to apply for probate. Probate means the official recognition that a will is legally valid. The application is made to the Probate Registry of the Court for a “Grant of Probate”. The grant is a document certifying that the Court recognises the authority of the Executor(s) to deal with the estate. This will enable the Executor(s) to collect the assets and pay any debts of the deceased person and then to distribute the estate as directed by the Will.
Where probate is granted, the original Will remains permanently in the Court. A copy of the Will is part of an original probate document which bears the seal of the Court.
Where there is no Will, or some part of the Will is not valid, the Executor(s) or the next of kin may need to apply to the Court to be the Administrator of the estate of the deceased. In this instance, the Court will issue a “Grant of Letters of Administration“.
How to Apply for Probate
Obtaining probate from the Court is the only process where you may want to engage a lawyer if you are uncertain what to do or ask a lawyer which type of court order you need.
The probate process is simple once you know who is going to apply for Grant of Probate/ Letters of Administration. In the first instance it will be the Executor(s) named in the Will, otherwise, if no Will, the spouse/children, parents, brothers & sisters, etc. in the order outlined in the rules of intestacy below.
The probate application is no more difficult than opening a bank account. For a simple estate, containing a house, car, furniture, possessions, simple investments and bank accounts, you won’t need a lawyer.
If the estate contains a business, overseas assets or substantial assets you are best to seek the advice of a lawyer but you may still be able to manage most of the estate yourself to dramatically cut down the legal fees.
Lawyers love to administer a large, complex estate because they can bill the estate considerable fees for many months.
What is an Executor of a Will?
An executor is a person appointed by a Will to act in respect of the estate of the testator upon his or her death. An executor is the legal personal representative of a deceased person.
The appointment of an Executor is only effective following the death of the Will maker. Once he or she has died then if you are appointed by the Will as executor you should decide very quickly whether or not you wish to accept the position. You are under no legal obligation to do so. If you don’t want to act as an Executor you will need to “renounce probate”. The testator may have discussed the appointment with you but frequently the Executor is unaware of the appointment until death.
What is an Administrator?
When a person dies without a Will then the legal personal representative is known as “the Administrator”.
Executor/Administrator Fees & Expenses
When the Executor/Administrator is a lawyer or the Public Trustee they will charge the estate service fees and recover expenditures. The fees can be very expensive.
When a relative/beneficiary is the Executor/Administrator there is no need to charge service fees. However, the Executor/Administrator recovers any expenditure of their own money from the estate.
The Executor/Administrator is accountable for expenditure and must retain all receipts as evidence. The estate’s trust bank account reimburses the Executor/Administrator and serves as a record of payment.
The Executor recoups expenses from the estate.
- Professional fees of tax agents, valuers, solicitors, real estate agents or stockbrokers
- Transfer fees for property title or motor vehicle registration
- Transport costs for moving a motor vehicle, household furniture
- Advertising the Estate in the Public Notices section of the newspaper
- Filing fees charged by the Probate Registry at a Court of Law
- The costs of postage, telephone, photocopying and other associated expenses
What are the Duties of the Executor/Administrator?
The Executor/Administrator has a fiduciary duty to act honestly and fairly with the estate’s property and finances in consultation with the beneficiaries and relatives of the deceased.
The Executor/Administrator is responsible for managing the estate but he/she can employ agents, such as lawyers, accountants or real estate agents to perform work.
In the course of administering an estate, an Executor/Administrator will:
- Assist with funeral arrangements.
- Secure all property and personal belongings of the deceased.
- List all assets and liabilities, including the values.
- File an application for probate in some circumstances.
- Pay outstanding debts and liabilities.
- Realise the assets to pay debts.
- Close bank accounts.
- Work out the order in which assets have to be used to pay debts. In some cases this will be set out in the will, otherwise there are laws which tell you which assets to use first.
- Lodge taxation returns for the deceased and for the estate.
- In some cases, arrange for documents to show that the Executor is the legal owner of certain types of assets before these can be sold.
- Pay debts and taxes.
- Distribute the net assets to beneficiaries according to the terms of the will.
- Transfer or sell real estate, motor vehicles, investments or other assets as required.
Multiple Executors
If there is more than one Executor named in the Will the forms need to be completed by all Executors. It may be convenient to have only one executor proceed with the application in which case the other executor(s) may renounce their duties. Submit the application in one executor’s name. In this circumstance, the summons should include a clause that leave is to be reserved to the other named executors to obtain a Grant of Probate. The probate registry will also require proof that the remaining executors have been put on notice of the application and reserve the right to make an application at a later date.
Renunciation of Rights to Administration of an Estate
Sometimes persons may renounce their right to become the Administrator. This often happens when parents or grand-parents are first in line to become the Administrator but renounce their rights as they are old, don’t have knowledge of estate law and feel that someone else is better suited to the task.
For example
John died intestate (without a Will). There is no wife or de facto partner. There are no children. Under the rules of intestacy John’s parents have the right to administer the estate. However, John’s parents are old and feel that John’s brother, Jack, who is an Accountant, is the best person to apply for Letters of Administration.
John’s parents sign a form called “Renunciation of Administration in case of Intestacy” and lodge with Jack’s probate application to the Court for Letters of Administration.
Administering a Deceased Estate With a valid Will
If there is a Will you must carry out the wishes contained in the Will, where practicable, to the best of your ability.
Administering a Deceased Estate with an Invalid Will
If there is an invalid Will you must comply with the Intestacy Rules.
Administering a Deceased Estate Intestate (without a Will)
Intestacy occurs when either the whole or part of the deceased’s estate is not disposed of by a Will. Total intestacy occurs when the deceased failed to make a will at all, failed to make a valid will or made a valid will but all the beneficiaries have since died. Partial intestacy occurs when the deceased made a valid will but the terms of the Will do not dispose of the whole of the estate or one or more beneficiaries have since died.
An Administrator is the person who takes care of finalizing a deceased estate without a Will.
If you are the spouse, de facto spouse or other direct family member of the deceased, and the deceased died without a Will, or the Will is declared invalid, then you can apply to the Court to become the Administrator of their estate. Following your application, the Court will issue a Grant of Letters of Administration in the name of the applicant. The Grant will then authorize and enable the Administrator to collect the assets of the deceased and to distribute them according to the State intestacy laws.
The duties of an Administrator are exactly the same as an Executor and include paying debts, collecting assets, finalizing tax affairs and distributing the assets in accordance with the Intestacy Rules.
Do I need to obtain a Grant of Letters of Administration?
Not necessarily. The main reason to apply for a Grant of Letters of Administration is to satisfy the requirements of some organizations, such as Banks and the Land Registry.
Financial institutions that hold assets of the estate will not release them to the Administrator for distribution without sighting a grant of representation from the Court. Contact the financial institutions concerned to establish whether they require a grant or not.
This will be more relevant for smaller estates. Apply for a grant of representation for larger estates comprising real estate and substantial assets.
Intestacy Rules
Intestacy Rules are in place to determine how an estate will be distributed when someone dies without a valid Will.
The intestacy rules govern the distribution of an estate to the next of kin such as spouse, de facto and issue (children & grandchildren). If there is no spouse or issue, then provision is made for parents, brothers and sisters, nephews and nieces, then grandparents, then uncles, aunts and cousins.
Note: Your in-laws are not classified as next of kin and are not included in the rules of intestacy for the distribution of an estate. A step-parent is not next of kin and neither is a mother-in-law or a father-in-law.
The Purpose of the Rules of Intestacy
Intestacy occurs quite frequently. Half of all people who die do so without a Will. The aim of the legislation in each state/country is to try and produce the same sort of result as if the deceased had made a Will.
It identifies the deceased’s closest relatives as the main beneficiaries and assumes that these are the people that the deceased would most want to benefit. The rules make assumptions about who the deceased is closest to. The rules do not therefore take account of individual circumstances, such as, the deceased not getting along with other family members. The law cannot be written to take account for all types of individual family circumstances or disputes.
The rules are designed to act as a safety net to protect those who have failed, for whatever reason, to direct what they would like to happen to their net assets when they die.
Letters of Administration
An Administrator does not have authority to deal with a deceased estate until the probate registry at the court has granted Letters of Administration (which is a Court Order) giving the Administrator the right to deal with the deceased’s estate. It is similar to the Grant of Probate to the Executor of a Will.
The court in considering an application for Letters of Administration must be satisfied that the applicant is the appropriate person to administer the estate. The descending order of priority for people who the Court may grant Letters of Administration in instances of intestacy are:
- spouse (including de facto partner)
- children (over 18 years old)
- grandchildren or great grandchildren (over 18 years old)
- parents
- brothers and sisters
- children of brothers and sisters
- grandparents
- uncles and aunts
- first cousins
- If no such person exists or if, in the opinion of the court, the person concerned is not fit to be trusted with the responsibility, the Court can grant administration to any person it thinks fit.
Usually, to share in the estate, a beneficiary must survive the intestate person by at least 30 days. Usually a de facto partner must have been in a continuous relationship with the deceased for a minimum period of two years. In most western countries the gender of the partner is not relevant.
The Role of the Administrator in Probate
The role of the Administrator is the same as an Executor except there is no Will providing instructions as to how to distribute the estate to the beneficiaries. An Administrator has the right to deal with the deceased’s estate according to the rules of intestacy.
The Grant of Letters of Administration of the deceased’s estate is a court order. The order makes all the deceased’s assets become vested with (become the property of) the Administrator. For example, if the deceased held shares in a company, upon seeing the grant from the court, the company will register the Administrator as the shareholder in place of the deceased. This will enable the Administrator to sell the shares and distribute the proceeds in accordance with the intestacy rules. The Court confirms the legal authority of the Administrator to deal with the deceased person’s estate. This will satisfy those institutions who hold the deceased’s assets that the Administrator has the authority to deal with those assets. It will give the administrator some protection from liability in dealing with the estate.
The Probate Administration Process
The basic procedure, common to all organizations, is to make contact (in person or writing) with the organization. Then request their procedure for transferring the assets in the Administrator’s name. You will need to complete some forms to identify yourself. You will need your ID such as driver’s license and passport. Provide a copy of the death certificate, copy of Grant of Probate or Letters of Administration. Give instructions to the organization where to transfer the funds.
If you engage a law firm to act as Administrator/Executor they write to the organizations (banks, etc.). They inform them of the deceased person’s estate. They enquire as to how to close the account(s) and transfer the funds to their trust account.
Do not allow a law firm to act as Administrator/Executor. It will be very expensive and they will be holding the funds in their trust account. The law firm will not agree to release the funds until you agree to their legal fees. They will deduct their legal fees from the proceeds of the estate.
Other Circumstances for Granting Letters of Administration
Where there is a Will but the Executors are not able or willing to act
This can be the case where one or more of the named Executors have predeceased the testator or are elderly and unwilling or otherwise not available to make the application for Probate.
There is provision for an application of Letters of Administration with the Will Annexed. Any person with an interest in the estate can make this application. This will usually be the closest relative(s) and/or beneficiaries.
Where the Will is Invalid
A Court will not grant probate where the Will is invalid. However, the Court will give “Letters of Administration with the Will Annexed” to an Executor named in the Will or the closest relative so as to enable the administration of the estate of the deceased.
The applicant may be the person nominated in the Will or document stating a testamentary intention as the Executor if that has been done. Otherwise any person who has an interest in the affairs of the deceased may make application for Letters of Administration.
Where there is partial intestacy
Partial intestacy occurs where there is a Will but it does not deal with all the assets of the estate. In this case the Executor, named in the Will, makes an application for a Grant of Probate. Distribute the assets, included in the Will, according to the Will’s instructions. Distribute assets not included to the beneficiaries according to the rules of intestacy.
What is a “Reseal of the Grant of Probate/ Letters of Administration”?
Obtain a reseal of probate when a deceased estate contains assets in another state. Obtain the Grant of Probate or Letters of Administration in the deceased’s state of residence where most of the deceased’s assets are located. If the deceased owned property in another state then the Grant of Probate/ Letters of Administration can be “resealed” by the Court in that state to effectively extend the Court order to that state. The reseal process is simply asking one Court to recognise the other Court’s order so you don’t have to go through the whole probate process in each state.
For example, the deceased lived in the state of Queensland, Australia and owned a property in that state. The deceased also owned a property in another state – New South Wales, Australia. Lodge an application for Grant of Probate or Letters of Administration in the Supreme Court in Queensland. Reseal the probate in the Supreme Court of New South Wales.
Assets Overseas
If the deceased owned assets in another country then you can make an application to the Court in that country. Support your application with your Grant of Probate/ Letters of Administration from the deceased’s country/state of residence. The difficulty here is that you may need to travel to that country to finalize the estate. Otherwise you would need to hire a local lawyer to finalize the estate. If you hire a local lawyer, make sure you get a quote first. Ensure you give them very specific instructions as to what you want them to do. Otherwise they may perform all sorts of unnecessary work and charge you for it.
For example, the deceased lived in the UK and owned a holiday home in Spain. Lodge an application for Grant of Probate or Letters of Administration in the UK. The UK probate will support the application for probate in Spain.
Probate & Pre-Nuptial Agreements
The deceased may have a registered financial agreement with their spouse or de-facto spouse. These agreements may be pre-marital or post-marital and may affect the claim of a spouse or de-facto spouse of the deceased’s estate. The agreement may be in conflict with the Will.
If there is a registered nuptial financial agreement it is best to consult a lawyer as to how to determine the rights and entitlements of the spouse. Under the terms of the agreement, the spouse may only be entitled to a small fraction of the estate. The spouse may hire a lawyer to contest the Will or financial agreement to be awarded a larger share of the estate.