A Guide to The Administration of an Estate
In Victoria, when a person passes away, usually the Executor in their Will, or their next of kin, must deal with their Estate. “The Estate” comprises of all the property and liabilities of a person in existence after his or her death. It is important to note that some assets do not form part of the Estate, including property owned jointly with another, superannuation and life insurance proceeds that are paid directly from the fund to a beneficiary.
The Executor or the Administrator may have to:
• Arrange the funeral;
• Collate the deceased’s assets, have them valued and potentially sold;
• Ascertain and pay the deceased’s debts;
• Keep proper accounts of the distribution and payment of the above assets and liabilities;
• Arrange tax returns; and/or
• Distribute the Estate in accordance with the Will and defend legal action on behalf of the Estate should it arise.
The Executor must act in the best interests of the estate and all beneficiaries and cannot act in his or her own interests if this is in conflict. If there is more than one executor, they should consult with each other and agree on a course of action.
To be able to do the above, a legal document issued by the Court called a Grant of Representation is usually required. This enables the Executor named in the Will, or the Administrator in other circumstances, to deal with the assets of the deceased. This is proof that the individual who is named in the Grant is entitled to collect and distribute the estate comprising of the deceased’s bank accounts, debts, property and other assets and liabilities. If a deceased person owned assets in more than one state or country it may be necessary to apply for a Grant in each place where the assets are located.
Types of Grants
There are four different types of Grants of Representation, Probate, Letters of Administration with the will annexed, Letters of Administration and Limited Grants.
A Grant of Probate is issued in circumstances where the deceased’s last Will has been proved by one or more of the Executors named in the Will. This establishes the validity of the Will as the last Will of the deceased.
Letters of Administration with the Will annexed is granted in cases where the deceased has left a valid Will, but the nominated Executor can not or will not apply for the Grant. The Grant will usually be issued to the beneficiary who has the greatest proprietary interest in the Estate.
Letters of Administration is granted in circumstances where there is no valid Will. It is generally granted to the next of kin of the deceased, for example a spouse, partner or child of the deceased.
Usually, the above Grants extend to the whole of the Estate and endures for the whole period of its administration. Where appropriate however, the Court can impose a Limited Grant of any of the above limiting what it extends to, or the time or purpose for which it is made.
Please note the above is intended to be commentary and general information only. Commentary and general information should not be relied upon or substituted as legal advice. Formal legal advice should always be obtained. If you would like to get legal advice on your specific situation then please contact our office.
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