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 and authorise the executor to manage and administer the deceased’s estate.
While probate is often a necessary step after someone dies, there are circumstances when it may not be required. Understanding these situations can help save time, money, and additional work for the deceased’s family.
This is general information only and you should obtain professional 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 by the deceased
- How the assets are held
- The policies of asset holders regarding release of assets
As a general guide, probate is required in New South Wales if the deceased person owns significant assets and/or real estate in their sole name. The following examples provide some guidance; however, each case should be individually assessed. An experienced probate and estate lawyer can assist with this process.
Small Estates – No Real Estate / No Significant Assets
If the deceased person did not own real estate and their assets were relatively minor and easily transferable (i.e., a modest bank balance and some personal belongings), probate may not be necessary.
Typically:
- The institution holding the asset determines whether probate is required,
- The criteria may differ between different asset holders
- Most financial institutions have policies regarding the release of funds to beneficiaries.
For example:
If the value is below a specific threshold (say, $50,000) a bank may release funds upon presentation of:
- A death certificate
- Other relevant documents, such as a copy of the Will
In such cases, the asset holder will usually require an indemnity releasing them from liability from claims of others.
Jointly Owned Assets
If most of the significant estate assets are owned jointly with another person, probate may not be required. In such cases:
- The assets pass to the surviving owner(s) and do not form part of the deceased’s estate.
- For example, when real estate is owned as joint tenants between spouses/partners, the surviving owner is automatically entitled to the deceased owner’s share. This is known as the “right of survivorship.”
- To transfer ownership to the surviving owner, documents and evidence of death are lodged with the relevant state titling authority.
On the other hand:
- If real estate is held solely in the deceased’s name or as a tenant in common with another owner, a grant of probate will be required to deal with the asset.
- A title search of the relevant property will identify how it is held between co-owners.
Assets with Designated Beneficiaries
Some assets, such as life insurance policies and superannuation funds, allow the deceased person to nominate a beneficiary to receive the proceeds upon their death.
- These proceeds do not generally form part of the deceased’s estate.
- In many cases, they can be paid directly to the nominated beneficiary without a grant of probate.
Each case, however, is assessed individually, and a trustee may sometimes require a grant of probate before determining entitlements to a superannuation fund or insurance policy.
Trusts
Assets held in a trust generally do not form part of the deceased’s estate and do not require probate. The trustee of the trust will distribute the assets according to the terms of the trust deed.
How to Determine if Probate is Needed or Recommended
If you are unsure whether probate is required in your situation, you can contact the various entities holding the deceased’s assets. It is advisable to seek legal advice from a qualified lawyer who can assess the specific circumstances of the deceased’s estate and advise you on the best course of action.
Executors have a legal duty to comply with the terms of the deceased’s Will and the relevant legislation when administering an estate. Before distributing assets, they should ensure that the estate liabilities are met and there are no outstanding claims on the estate. An estate lawyer can explain your obligations and help protect you from potential liability by recommending steps you can take before administering the estate.
Checklist and Guidance for Executors
- Review the Will: Check if the Will names an executor and if it provides clear instructions on how the assets should be distributed.
- Identify the assets: Make a list of the deceased’s assets and their estimated values.
- Check ownership: Determine how the assets are owned (e.g., sole ownership, joint ownership, trust).
- Consult with institutions: Contact banks, financial institutions, and other organisations holding the deceased’s assets to ask about their requirements for release.
- Seek legal advice: If you are unsure about any aspect of administering an estate or the process of applying for probate if it is required, we recommend consulting an experienced estate lawyer.
Final Thoughts
Determining whether probate is needed requires consideration of the deceased’s assets and circumstances. While probate is often a necessary part of administering a deceased person’s estate, there are situations where it may not be required. Understanding these exceptions can help streamline the process and reduce the burden on the deceased’s loved ones. If you are unsure whether probate is needed in your situation, seek professional legal advice to ensure you are taking 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].