The process of obtaining probate

Probate is a grant made by the Supreme Court of New South Wales that ‘proves’ the Will of a deceased person and vests title to the estate’s assets in the named executor/s. This is the official process that enables the executor to legally deal with the deceased’s estate.

As the legal personal representative of the estate, the executor must determine the assets and liabilities, liaise with debtors, creditors and beneficiaries, sell, transfer and distribute assets and generally finalise the estate in accordance with the Will.

The executor should maintain written records of the affairs of the estate and, where necessary, file estate tax returns.

The executor is often guided by a lawyer who provides professional advice to ensure protection from liability and to deal with any complications or claims made on the estate.

If the deceased died without a valid Will or the Will appointed 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 explains the process of obtaining a grant of probate where there is a valid Will, and the general process of administering the estate.

Is a grant of probate necessary?

There is no statutory requirement that probate is obtained and a grant may not be necessary for small estates. Property held jointly can be transferred to the name of the surviving tenant/s by lodging the appropriate documents with the relevant authority.

Financial institutions will generally release funds of up to $50,000 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 relevant enquiries should be made with each institution.

A grant of probate is always required to transfer real estate that is not subject to a joint tenancy.

Unless the estate is small, simple and there is no risk of a claim being made against it, an executor will generally seek an application for a grant of probate.

Process

An application for probate should be made within  6 months of the testator’s death. Delays will usually require an explanation to the Court.

A notice of intended application must be published on-line with the Supreme Court Registry at least 14 days before the application is made. This warns interested parties (creditors, 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 by way of an inventory and the filing fee is determined according to the estimated value of assets. Joint assets are included in the inventory but not in the assessment of filing fees.

Once probate is granted, the executor may commence administration of the estate. If assets are held outside of New South Wales, the grant of probate may need to be ‘resealed’ in the relevant jurisdiction. This is a procedural matter in which a copy of the original grant, together with a summons and supporting documentation is filed with the relevant Court in the jurisdiction where those assets are held. 

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. As a fiduciary to the beneficiaries, executors must act with care and diligence as they may be held liable for losses sustained through negligence or delay.

On the other hand, before distributing assets, 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 within which to make a claim. This process protects 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 wishes of the deceased are upheld and the distribution is in accordance with its provisions. This may be obvious where the executor is the sole beneficiary, 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 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.

Executors 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 executor will need to be certain 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 probate and administering an estate is an important function, and for many executors and beneficiaries, the process can seem tedious and daunting.

However, these processes are in place to ensure that executors and beneficiaries are properly protected and, importantly, that the testamentary wishes of a deceased person are properly carried out.

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.