Estate Planning

The Importance of a Will

The most important reason for making a will is to ensure that, after your death, your property is distributed in the way you wished. In making a will an executor, who is responsible for making sure your requests are carried out, is appointed.

• If you die without a will, the courts determine who will administer your estate, handle financial matters and act as guardian to your minor children. With a will, you can choose who will be your beneficiaries.
• In some instances, joint ownership of property may not mean your share is passed on in the manner you wish. Should you and your spouse die in a common accident before a proper will has been executed, your property will pass on according to state law.
• Changes in circumstances, which may seem insignificant at the time they occur, can have a profound effect on who benefits from your estate. As state law has very specific guidelines regarding the rights of spouses, de facto spouses, children, grandchildren and business associates, a will should be reviewed every few years.
• A properly worded will, with the correct signatories, is very important. The law is exact in its requirements for a will. It is important that a competent person oversees its preparation, as a homemade will may not stand up in a court of law.
• Your will instructs your executor to carry out your wishes. The best time to make it is well in advance, when you are calm and without stress. Like your Pre-paid Funeral Plan, it provides peace of mind and will ease the burden for family and friends.

GOVERNMENT ALLOWANCES & REBATES

Allowances and Rebates

Various Government Departments and organisations offer bereavement payments for Australian residents. You should contact your nearest Centrelink office or call 13 23 00 for details on your situation. Here is a list of some entitlements and allowances (please note these may be subject to change by the Government):

Married Pensioner

Surviving partners receive a further 14 weeks of their spouse’s pension, usually paid in a lump sum.

Single Pensioners

The estate receives one full pension payment after the person’s death.

Carers’ Pension

Entitled to a further 14 weeks pension following the death and this is paid in fortnightly payments. If the deceased was single/widowed/divorced there may be an additional lump sum payment.

Sole Parent Pension

Entitled to a further 14 weeks pension following the death and this is paid in a lump sum.

Surviving Spouse Bereaved Allowance Pension

If the surviving spouse does not have sufficient means to support him or herself, the bereavement allowance is available for 14 weeks.

Widows Allowance

If the surviving wife is over 50 and she has no recent experience in the workforce, she may be entitled to regular payments.

Where possible we will try to attain individual information for you. Depending on the history of the deceased and the State in Australia in which they died, additional allowances may be payable through other institutions, including; The Department of Veterans Affairs, trade unions, some private health funds and insurance companies.

ESTATE ADMINISTRATION

The Executor

The person making the funeral arrangements should note that, legally, the executor of the deceased person’s will is the ‘owner’ of the body. On most occasions though, the executor will ask the next of kin or a close relative of the deceased to arrange the funeral.

When there is no will and no executor the next of kin is automatically responsible.

In the case of there being no will and/or relatives but there is some estate, the Public Trustee will administer the deceased person’s affairs.

Practical Guidelines

Leanne O’Dea is pleased to offer you some practical guidelines for Estate Administration. Intended as a guide only, the attached information may help you when making some of the decisions you might need to make in what can be an emotional and difficult time.

Estate Administration

The finalisation of a person’s Estate is a responsibility for which the Executor or Administrator is personally liable.

Finalisation of an Estate should be viewed as a process. A process to be followed that leads to the proper result for the Estate and comfort for the Executor/Administrator in discharging their duties.

Ten practical tips to assist with the process are:

1. Obtain a folder or file to store all relevant information, correspondence and notes. Keep all correspondence in the course of the process in this file and take notes of telephone conversations and other discussions.
2. Place this card on the inside cover of the folder/file, refer back to it as needed and tick off items as completed.
3. Identify and make a list of the assets and liabilities of the Deceased i.e. what they owned, how they owned it (were there any joint owners?) and what they owe.
4. Obtain the Certified copy of the Registration of the Death issued by the Registry of Births, Deaths and Marriages (this can usually be obtained within 14 days).
5. Determine if there is a Will. If there is a Will locate it, keep it safe and contact the Executor named in the Will. If you are not the Executor pass your file to the Executor, as the Executor should deal with matters going forward. Do not mark the Will, do not staple the Will with other documents and do not remove staples already attached to the Will.
6. If the Deceased owned land, shares or assets of significant value it is likely it will be necessary to obtain a Grant of Probate or Letters of Administration. These are orders from the Supreme Court. Broadly, Probate is obtained if there is a Will with a valid Executor; otherwise Letters of Administration are obtained. Probate/ Letters of Administration gives the person to whom the order is granted the ability to deal with the Estate of the Deceased. Seek advice from an experienced solicitor on making an application to the court for Probate or Letters of Administration. While applications can be made without legal assistance, it is often more efficient to obtain the order with the assistance of an experienced solicitor.
7. If the deceased only owned property as a joint tenant, a bank account with a low balance or a car, it is often possible to transfer these items without the need for Probate or Letters of Administration. If you are unsure how to “distribute” such property, consult with the bank, with the Department of Transport (for cars), Landgate for land, or an experienced solicitor.
8. After obtaining Probate/Letters of Administration and authority to deal with the assets of the Estate, collect the assets. This will involve identifying yourself to the relevant holders or registration authorities of the assets as the person with authority to deal with the assets. Arrange to have the assets come under your control whether through physical possession or registration as the Executor/Administrator.
9. Pay liabilities and expenses of the Estate in accordance with law.
10. Distribute the remaining proceeds of the Estate in accordance with the Will (if a valid Will exists) or the law as applicable.

Remember: An Executor/Administrator is personally liable for their actions in administering an Estate. If you are unsure what to do seek advice from an experienced solicitor.

PROBATE AND LETTERS OF ADMINISTRATION

10 Points on Probate

• Requires a Will.
• Is an application to the Supreme Court for a Grant of Probate.
• The order grants the Executor(s) the authority to deal with the Deceased’s estate.
• Application is made by the Executor(s). If named Executor(s) is deceased or unable to act an application must be made for Letters of Administration with the Will annexed.
• The application to Court requires preparation and lodgement of items such as; Affidavit of the executor; Statement of assets and liabilities; Will and Death Certificate.
• Court considers application; if it has queries it issues requisitions (i.e. questions).
• If the application is not contentious, the order made without a hearing.
• Generally, Court takes approximately 2 months from the time of lodgement to consider an application in a non-contentious matter and make a Grant.
• If the application is contentious, for example there are questions as to the validity of the will, a hearing is required to determine if an order should be made.
• Once in receipt of the order the Executor(s) collects the assets of the estate and pays liabilities in accordance with the law and distributes remaining assets in accordance with the Will. Executor is personally liable.

10 Points on Letters of Administration

1. Required where there is no Will or where there is no Executor of a Will.
2. Is an application to the Supreme Court for a Grant of Letters of Administration.
3. The order grants the Administrator(s) the authority to deal with the Deceased’s estate.
4. Application is made by the persons who will benefit (usually next of kin). If named Executor(s) in a Will is deceased or unable to act an application must be made for Letters of Administration with the Will annexed.
5. The application to Court requires preparation and lodgement of items such as: Affidavit; Statement of assets and liabilities; and Death Certificate.
6. Court considers application; if it has queries it issues requisitions (i.e. questions).
7. If the application is not contentious, the order is made without a hearing.
8. Generally, Court takes approximately 2 months from the time of lodgement to consider an application in a non-contentious matter and make a Grant.
9. If the application is controversial, for example there are questions as to who should be appointed as administrator, a hearing is required to determine if an order should be made.
10. Once in receipt of the order the Administrator(s) collects the assets of the estate and pays liabilities in accordance with the law and distributes remaining assets in accordance with the law (or Will if the Grant is Letters of Administration with the Will Attached). Administrator is personally liable.

Treatment of Some Common Assets After Death

Land owned as Joint Tenants

The surviving joint tenants “gain” the interest of the deceased joint tenant. A Survivorship Application must be made to Landgate to change the registration of the Property so that the “new” owners are able to deal with the property.

Land owned as Tenants in Common or Land Solely Owned

Probate or Letters of Administration is required to enable an Application by Personal Representative to Landgate to transfer the land to those entitled.

Bank Accounts

Bank Accounts with less than $6,000 can be closed and proceeds obtained without Probate or Letters of Administration. Some Banks and Financial Institutions will allow access to accounts with more than $6,000. If the Bank or Financial Institution will not allow access, Probate or Letters of Administration will be required.

Shares in Public Listed Companies

Probate or Letters of Administration is required to enable the shares to be transferred to the beneficiaries.

Shares in Private or Unlisted Companies

It is necessary to check the constitution of the company to determine the process for transfer to the beneficiaries. Some constitutions allow the transfer without Probate or Letters of Administration. Others require Probate or Letters of Administration.

Motor Cars

Registration can usually be transferred to the beneficiaries by contacting the MTA with a copy of the Death Certificate and Will.

Trusts

If a person held interest in a trust or was an office holder of a trust (such as a trustee), it is necessary to review the Trust Deed to understand what procedures must be followed. Often, legal advice is required.

Superannuation Funds

If a binding nomination of a beneficiary exists, the proceeds of the fund will not form part of the Estate of the Deceased. The Superannuation Fund trustee will pay any entitlements direct to those entitled (usually nominated dependants). The proceeds only form part of the Estate of the Deceased if paid to the Estate by the Trustee of the Fund. Probate or Letters of Administration are usually required before a payment to an Estate will be made.

Life Insurance

Proceeds of life insurance will be paid to the person entitled under the policy. The proceeds only become part of the Estate if the policy provides for payment to the Estate.