Getting ‘probate’ when there is no Will – Letters of Administration

When a person dies without a valid Will (dying intestate), or a person appointed as an executor under a Will is unable to fulfil that role, an ‘interested person’ may apply to the Supreme Court for letters of administration.

Letters of administration allow the interested person, known as an administrator, to deal with the deceased’s estate in the same manner as an executor would.

This article explains the process involved in obtaining letters of administration where the deceased has left no Will, and the general process of administering the estate.

What is the role of the administrator?

Any adult person who resides in New South Wales may be appointed an administrator however in practice the applicant is usually a spouse, partner, child or other close relative with a beneficial interest in the estate.

As the court-appointed legal representative of the deceased, the administrator will determine the estate assets and liabilities, liaise with debtors, creditors and beneficiaries and distribute and finalise the estate. The administrator must maintain written records of the affairs of the estate and, where necessary, file estate tax returns.

If, after the estate is finalised, there are continuing obligations, such as carrying on a trust, the administrator will become a trustee.

Applying for letters of administration on intestacy

An application for letters of administration should be made within six months of the testator’s death. Delays will usually require a reasonable explanation to the Court.

A notice of intended application to apply for letters of administration must be published on-line with the Supreme Court Registry at least 14 days before the application is made. This warns interested parties (creditors or family provision claimants) of the application and provides an opportunity for the relevant claim, objection or caveat to be lodged.

The following documents are filed with the Court:

• Summons (or application) for letters of administration.

• Affidavit of applicant. This sets out full details of the deceased, particulars of the relationship between the applicant and deceased, an explanation that the deceased did not have a Will and the searches undertaken to try to locate a Will, details of those entitled to an interest in the estate (names, ages and relationship with the deceased), information as to whether the deceased had a de facto spouse at the time of death and an explanation of any irregularities or doubts as to the applicant’s entitlement (if relevant).

• Where complex issues are involved, or there are questions around the cause of death, an additional affidavit is usually filed.

• Attached to the affidavit is the death certificate and an inventory of property disclosing the estate assets and liabilities. The Court filing fee is determined according to the estimated value of gross assets. Joint assets are included in the inventory but not in the assessment of filing fees.

• Legal fees for application for Letters of Administration are also set by the Court according to the gross assets.

• Consent to administration (if applicable).

Additional documents required

When a person dies intestate, their assets are distributed according to formulae set by legislation. Essentially, the rules provide for a specific order of distribution to the deceased person’s next of kin, depending on their family circumstances. Accordingly, the following documents (where relevant) will also be filed as proof of those entitled to a distribution from the estate:

• marriage certificate (if married at the time of death);
• for a former marriage, death certificate of former spouse or certificate of dissolution of marriage;
• birth certificate of the deceased person;
• birth certificate/s of all those entitled under intestacy;
• death certificate of a deceased child beneficiary and, if relevant a birth certificate for the deceased child’s child / children (as grandchildren to take by substitution);
• if the deceased left no spouse, children or grandchildren, then such certificates as establish the entitlement of other persons under the intestacy rules.

Distribution of the estate on intestacy

Where the deceased left no Will, the statutory distribution of the estate will typically be according to the Succession Act 2006 in the following order:

Spouse and child or children of the relationship

The spouse will inherit the whole of the estate.

Spouse and a child or children from a prior relationship

The spouse is entitled to the personal effects (property) of the deceased, a statutory legacy of $350,000 (adjusted by CPI) and half of anything remaining. The statutory legacy is amended by the Court from time to time.

All the deceased’s children (including children from a previous relationship and those of the relationship with the current spouse but excluding step-children) are entitled to share equally in the remaining half of the estate.

No spouse, children

The estate is shared equally between the surviving children. If the deceased is predeceased by a child, then that child’s share is shared equally between his or her children, where relevant.

No spouse, no children

The parents share equally in the whole estate.

No spouse, children or parents

Full and half blood brothers and sisters will take in equal shares or their children if he / she / they predecease/s the deceased.

A spouse includes a married or domestic partner of the deceased person and, for the purposes of an intestate estate, there may be multiple entitled spouses. This, and the particular dynamics of a deceased’s family can make determining entitlements complex which will generally require advice from an experienced lawyer.

Administering the estate

Administrators must act with care and diligence to ensure the proper administration of the estate. Whilst the estate should be distributed without undue delay, administrators should ensure that liabilities are met and there are no claims on the estate.

A notice of intention to distribute the estate should be published to protect the administrator by giving potential claimants and creditors a specific timeframe within which to make a claim. If no claim is made within that time, the administrator may distribute the estate.

The administrator 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.

Administrators may need to make strategic decisions, under the guidance of an expert as to the appropriate timing for the sale or transfer of significant assets such as real estate and shares.

Administrators should also be mindful of their duty to protect and preserve estate assets and to ensure that appropriate insurance, where relevant is in place.

If the estate includes a business interest this will require careful attention, whether the business is to be wound up, sold or transferred to a beneficiary.

Prior to distributing assets, the administer should ensure 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 other 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, particularly where there are multiple beneficiaries;
• beneficiaries who are receiving insurable assets have arranged insurance cover in their own names before cancelling existing policies.

Conclusion

Applying for letters of administration for a deceased estate can be complex, particularly, when there are multiple parties involved. The guidance of an experienced estate lawyer can be invaluable in streamlining the process and ensuring that administrators are assisted and protected when carrying out their duties.

If you or someone you know wants more information or needs help or advice, please contact us on (02) 9918 0222 or email office@millardslawyers.com.au.