When someone dies, they may leave a Will appointing one or more executors to manage their affairs. The executor’s duties typically include:
- Making funeral arrangements.
- Identifying, collecting and valuing the deceased’s assets.
- Notifying account providers and government authorities of the death.
- Paying any outstanding debts and taxes.
- Transferring property and distributing assets according to the Will.
In many cases, the executor may need to apply for a grant of probate. Probate is the legal process of requesting the Supreme Court of New South Wales to validate the Will. It authorises the executor to manage and administer the deceased’s estate.
While probate is often a necessary step, some circumstances do not require it. Understanding these situations can help save time, money, and additional work for the family. This is general information only. You should obtain professional legal advice relevant to your circumstances.
Situations When Probate May Not Be Needed
There is no statutory requirement to obtain a grant of probate after a person dies. Whether or not probate is needed depends on the type and value of assets owned. It also depends on how the deceased held those assets and the policies of the asset holders.
As a general guide, probate is required in New South Wales if the deceased person owns significant assets or real estate in their sole name. An experienced estate lawyer can assist with this assessment.
Probate Requirements: Quick Comparison
| Asset Type | Probate Likely Required? |
|---|---|
| Solely Owned Real Estate | Yes |
| Jointly Owned Property | No (Right of Survivorship) |
| Small Cash Bank Balances | No (Subject to bank policy) |
| Assets in a Trust | No |
Small Estates – No Real Estate / No Significant Assets
If the deceased person did not own real estate and their assets were minor, probate may not be necessary. Typically, the institution holding the asset determines whether probate is required. For example, a bank may release funds below a specific threshold (say, $50,000) upon presentation of a death certificate and a copy of the Will.
Jointly Owned Assets and Survivorship
If significant assets are owned jointly, probate may not be required. In such cases, the assets pass to the surviving owner and do not form part of the estate. For example, when spouses own real estate as joint tenants, the survivor is automatically entitled to the deceased’s share. This is known as the “right of survivorship.”
Conversely, if real estate is held solely or as tenants in common, a grant of probate will be required. A title search will identify how co-owners hold a property.
Assets with Designated Beneficiaries
Some assets, such as life insurance policies and superannuation funds, allow for a nominated beneficiary. These proceeds do not generally form part of the deceased’s estate. In many cases, providers pay them directly to the beneficiary without probate.
Assets Held in Trusts
Assets held in a trust generally do not form part of the deceased’s estate. Therefore, they do not require probate. The trustee will distribute the assets according to the terms of the trust deed.
How to Determine if Probate is Recommended
If you are unsure whether probate is required, you can contact the entities holding the assets. It is advisable to seek legal advice from a qualified lawyer. They can assess the specific circumstances and advise you on the best course of action.
Executors have a legal duty to comply with the Will and relevant legislation. Before distributing assets, they should ensure estate liabilities are met. An estate lawyer can help protect you from potential liability by recommending necessary steps.
Checklist and Guidance for Executors
- Review the Will: Check for a named executor and clear distribution instructions.
- Identify the assets: Make a list of assets and their estimated values.
- Check ownership: Determine if assets are held solely, jointly, or in a trust.
- Consult with institutions: Contact banks to ask about their requirements for release.
- Seek legal advice: Consult an experienced estate lawyer if you are unsure about any aspect of the process.
Final Thoughts
Determining whether probate is needed requires consideration of the deceased’s assets. While probate is often necessary, understanding exceptions can streamline the process for loved ones. If you are unsure, seek professional legal advice to ensure you take the appropriate steps.
If you or someone you know wants more information or needs help or advice, please call (02) 4987 3344 or email [email protected].