The death of a loved one can be an overwhelming, confusing and busy time. Although nothing will remove the sting of grief, unnecessary stress can be reduced by understanding the steps involved and seeking the right advice. Most of the angst that accompanies the administration of an estate stems from being uncertain as to who is the right person to make decisions, what documents are needed and how to navigate the system.
Who has authority to make decisions after death?
Where there is a will, the executor has a key role in administering the estate. The executor has the responsibility of arranging the deceased’s funeral, securing the deceased’s assets, applying for a grant of probate (if necessary), making sure all of the deceased’s debts are paid and distributing any remaining assets according to the terms of the will. If there is more than one executor, they need to work together to make joint decisions.
Where there is no will, then the Court must appoint an administrator to deal with the deceased’s assets, usually the next of kin.
If the deceased had made an Enduring Power of Attorney during their lifetime, that power ceases upon death and the attorney no longer has authority to act.
Practical steps to take immediately after death
The funeral director will provide you with helpful information about what needs to be done immediately after death.
If the deceased was receiving a pension from Centrelink, the Department of Veterans Affairs or a superannuation fund, then it is wise to notify the pension authority as soon as possible to ensure that no overpayments are made.
Once a bank has been notified of a person’s death, the deceased’s accounts will be frozen to withdrawals, although the accounts can usually still accept deposits. The reason for this is to protect them from unauthorised access until all of the legal requirements have been met.
If the deceased person held a joint account with another person, the surviving joint accountholder is entitled to the balance of that account and can continue to operate the joint account despite the other person’s death.
In most cases, the bank will be willing to release funds from a deceased person’s account to pay for the funeral invoice.
What is probate?
A grant of probate is a court order that confirms the validity of the deceased’s last will. A grant of probate is evidence that the executor has authority to act on the deceased’s behalf.
Where the deceased did not leave a will, or there is no executor named in the will, then an application for letters of administration needs to be made instead.
The process for obtaining a grant involves publishing notices, swearing Affidavits and preparing Court forms. As it is an important Court process, it is a good idea get a lawyer to assist you.
When is probate required?
The short answer is that it depends on the assets of the estate. Where the deceased held land in their sole name, or with another person as tenants in common, then it will always be necessary to obtain a grant in order to deal with the land. Other institutions, such as banks or share registries, each have their own threshold for when they will require a grant before releasing funds.
In some circumstances, it is possible to deal with non-estate assets, such as property owned as joint tenants, or superannuation or life insurance for which there is a nominated beneficiary, without needing to obtain a grant.
Each Australian State and Territory has different rules relating to probate and therefore you should seek legal advice as to the appropriate process in your jurisdiction.
The importance of being prepared
Estates where the deceased left a will are far easier than administering intestate estates. It is clear who has authority to act and it is easier to obtain a grant. Being prepared by making a will makes things simpler for your loved ones.
Avoiding estate disputes
Unfortunately, it is not uncommon for disputes to arise while an estate is being administered. Common reasons for estate disputes include:
- Executors being unable to agree on how the estate should be administered;
- Beneficiaries being concerned about how the executor is dealing with estate assets;
- Where there is uncertainty as to the deceased’s last will; or
- Persons feeling that they should have received more from the estate and bringing a family provision claim.
If you are involved with an estate and are facing a possible dispute, you should seek advice early to ensure that you understand your rights and responsibilities.
Rebecca Tetlow is an Accredited Specialist in Wills and Estates Law (NSW) and a Senior Associate at Dobinson Davey Clifford Simpson, 18 Kendall Lane, New Acton, Canberra ACT 2601 and can be contacted on (02) 6212 7600.