Executor Assistance
When you prepare your will one of your most important decisions will be who to choose as executor. The executor is the person or persons who you name to be responsible for carrying out your wishes after death and distributing your assets according to your wishes. Often people nominate their spouse, their children or specialist trustee companies.
The executor’s responsibilities include:
- Identifying and collecting all of the assets of the estate and arranging for valuations, if necessary.
- Looking after any special wishes that the deceased person may have included in the will.
- Determine what debts existed and attend to payment of those.
- To apply for a grant of probate at the probate office.
- Maintain or wind up any businesses.
- Arrange for tax returns to be prepared and attend to payment of taxes.
- Take or defend legal action on behalf of the estate.
- Finalise the estate by selling assets or transferring them to beneficiaries.
What is a grant of Probate
A grant of probate is a court order giving the executor the right to carry out the wishes expressed in the will. Unless the estate is very small, banks and other institutions holding assets of the deceased will not hand those assets over to the executor until a grant of probate is produced.
If assets are jointly owned, then probate may not be necessary. In many husband/wife situations, the family home is jointly owned and the parties have joint bank accounts. If you are named as an executor of a will, it is wise to seek legal advice as to whether a grant of probate is necessary. In small estates, even if assets are held in the name of the deceased alone, it is sometimes possible to administer the estate without the need to apply for probate.
Letters of administration
If there is no will, then it is not possible to apply for probate; instead, it is necessary to apply to the court for an administrator to be appointed and once this application is approved, instead of receiving a grant of probate, Letters of Administration are granted. Letters of Administration serve the same purpose as a grant of probate in that it enables the estate to be collected and then distributed to beneficiaries after the payment of outstanding debts and charges.
If there is a will but no executor then it will be necessary to apply to the court for what is known as a grant of Letters of Administration With the Will Annexed.
Intestacy
If there is no will the deceased is said to have died “intestate” and application must be made to the court for grant of Letters of Administration authorising the administrator to proceed to administer the deceased estate according to statute.
Intestate estates are distributed according to a statutory formula. A common myth is that if a person does not make a will the result is that the Government benefits by receiving the whole of the estate. This occurs only if there are no next of kin at all.
In Victoria, if a person dies intestate or has not made a valid will or the will does not completely distribute all of the deceased’s possessions, the estate is distributed in the following way subject to the overall value of the estate:
If the deceased is survived by:
- A partner with no children (or grandchildren): the partner receives the entire estate.
- A partner and children: the partner receives two thirds (2/3) of the estate and the remaining one third (1/3) is divided equally among the children. If one of the children has died that share goes to his/her children.
- Children, but no partner: the estate is divided equally among the children (or their children).
- Parents, but no partner or children: the estate is divided equally between the parents or given entirely to one parent if only one survives.
- Brothers and sisters only: the estate is shared equally among them, with the children of a deceased brother or sister taking his/her share.
- Nieces and nephews only: the estate is divided equally among those surviving.
- Other next of kin only: the estate is divided equally between the nearest in equal relationship to the deceased.
- No next of kin: the estate goes to the State.
In this context, ‘partner’ means not only a spouse but a same sex partner or a person who has had a caring role for the deceased. If the deceased at death had a spouse and a domestic partner, a further division of the estate can be made between them if the length of the domestic relationship is at least 4 years.
Who may know what is in a will?
In Victoria, the list of people who have a right to know the contents of a will is set out in the Wills Act.
This right does not operate until the will maker dies, as a will has no effect until the death of the person who made it.
A person may tell others before he dies what is in his will but nobody can legally demand to know or see the contents of another’s will before the death of the will maker.
The people who have a right to ask to inspect and copy a will include:
· Any person named in the will;
· Any person named in an earlier will as a beneficiary;
· The deceased’s spouse at the date of death;
· Any de facto spouse of the deceased;
· Any parent, guardian or children of the deceased;
· Any person who would be entitled to a share of the estate if the deceased died intestate (ie without a will);
· Any creditor of the deceased or other person who produces evidence that he has a claim against the estate.
Many people mistakenly believe that it is a legal requirement to have a “reading of a will” and that if they are a beneficiary, they will be invited to that.
There is no legal requirement to have a reading of the will. The executor of the estate has a legal duty to inform beneficiaries of the nature and extent of their entitlement under a will and beneficiaries. If a person believes he or she may be a beneficiary under the will and has not been notified by the executor, they should write to the executor asking for confirmation of their status and to inspect and copy the will. The executor should also tell the beneficiaries approximately when they might expect to receive their entitlement from the estate.
If you believe that you should have been named as a beneficiary and were not, or were named but did not receive a fair entitlement having regard to your relationship with the deceased, you should seek immediate legal assistance as strict time limits apply to the lodging of will disputes with the courts.
