Losing a loved one and the administration of their estate is one of the most difficult times in anyone’s life.
The Estate Administration process can seem overwhelming and confusing with many people not knowing where to start.
A good Estate Administration Manager will help simplify and streamline the process as much as possible, while remaining accessible and keeping the lines of communication open.
It also helps to have an understanding of key terms and stages of the Estate Administration process.
The Estate Administration Process
There are several steps required to administer an estate, but the key stages are as follows:
- Locate the Will
- Make funeral arrangements
- Conduct preliminary conference with family, legal representatives and business associates
- Advise beneficiaries and ascertain immediate needs of family
- Protect the assets
- Determine assets and debts
- Obtain Grant of Probate (if required) and attend to legal formalities
- Establish trusts
- Continued administration and asset management
- Calling in and/or transferring assets, obtain receipts and provide final statements to beneficiaries.
- Distribute estate.
Who is responsible?
When an individual dies the person nominated as their Executor is obliged to look after the assets of the deceased person and arrange for the person’s debts to be paid. The person is usually appointed as the individual’s Executor by the Will.
If there isn’t a Will or an appointed Executor is unwilling or unable to fulfill their role, an application may be made to the Supreme Court for appointment as the Administrator of the Estate (we will refer to the Administrator also as the Executor). This Order of the Court or “Grant” is referred to as “Letters of Administration”.
An Order of the Court may also be referred to as “a Grant of Probate” – a Court order which is sometimes necessary and used to declare a deceased’s Will valid and that the person named in the Will as the Executor can finalise the deceased’s affairs.
A Grant of Probate is a formal recognition of a person’s right to administer the estate and gives that person the authority to deal with the world at large in relation to the distribution of the deceased’s property.
When is Probate required?
The need for Probate in any Estate is largely governed by the attitude of individual financial institutions, insurance companies or similar. There are also certain circumstances where there could be risks attached to the distribution of the Estate assets without obtaining a Grant of Probate.
While an application to the Court incurs costs in advertising of the application in a newspaper, Court lodgement fees and legal costs, it is sometimes necessary before assets can be distributed.
For example, a bank account in the name of the deceased, as far as the bank is concerned, belongs to the deceased. If the bank is satisfied that another person has lawful authority over the account then it will release the funds to that person. If they’re not satisfied, they would require a Grant of Probate as that authority.
The same applies to land. The Registrar of Titles may, in certain circumstances, require a Grant of Probate before transferring land to another person.
Where a dispute may arise over the Estate a person appointed as Executor would be wise to apply for Probate. Where it is later determined a person does not have the right to deal with an Estate, or a Will with a more recent date is located, the Executor can be liable to beneficiaries.
A solicitor specialising in Wills and Estates can provide advice on whether Probate may be required.
What happens after the Grant (of Probate) has been made?
After you have collected the Grant from the Supreme Court Registry, you physically take it or send it to the places where the deceased’s assets are held. For instance, if the bank requires the Grant, you take it to them and they will place a copy of the document with their records. Any money in the accounts will then be paid to the Executor to distribute in accordance with the Will.
Likewise, any land in the sole name of the deceased can be transferred to the beneficiary by taking the Grant to the Land Titles Office and making an application for that transfer.
Any debts of the Estate must of course be paid before the Estate is distributed. The Executor has a legal obligation to make those payments. In many ways the process is simply a lot of ‘leg work’ rather than being a difficult process.
- An Executor must always keep their own money and affairs separate from those of the deceased estate – especially where the Executor is not the sole beneficiary.
- Always act in accordance with the Will and in an open manner so all concerned can see that you are carrying out the deceased’s wishes.
- It’s essential to have a high quality legally binding Will in the first place to avoid bitter arguments, disputes, confusion and heartache at a time when loved ones are trying to cope with the loss of someone close to them.
- Don’t forget to lodge that final tax return and seek expert advice about the tax implications of the disposal or retention of the deceased’s assets.
Gill & Lane are very experienced at administering estates and advising on complex situations.