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If you’re an executor of a Will and the Supreme Court has issued you a Grant of Probate; or if no Will exists and you’ve been issued Letters of Administration, you may be wondering what you need to do next.
This estate administration checklist and 11-step guide explain generally what happens after Probate has been granted. To learn more about Grants of Representation, read our article ‘What is a grant of probate and letters of administration’ here.
If you require assistance at any stage, our team of wills and estate lawyers are available to chat on 1800 959 371.
1. Determine if a testamentary trust account is needed.
If the deceased's estate is large, you may need to open a testamentary trust. Sometimes a trust account is even requested in the Will. A testamentary trust comes with additional costs, so it is only viable if the estate’s value justifies the need. Now that Probate has been granted, you can open this account if you need to.
To learn more, read our article what is a testamentary trust?
2. Register for a Tax File Number.
Before you begin to collect all assets of the deceased estate for distribution you may need to set up the estate so that assets may be transferred to you. Register the deceased estate for a Tax File Number (TFN) to avoid paying tax at the highest income rate.
You can register online by completing the Australian Tax Office’s application for a deceased estate form here. Then you will need to register through a tax agent. Discuss this step with a tax agent to obtain the best advice.
3. Make certified copies.
You will need certified copies of the Grant of Probate or Letters of Administration before larger value assets may be transferred. Certified copies are usually needed before you will be able to access the deceased person’s accounts, including banks, superannuation and insurance companies. To learn who has authority to certify these documents, read our article who can certify a Will or death certificate.
In addition to certified copies of the Grant of Probate (or Letters of Administration) you will likely need to provide certified copies of the death certificate, too. If you are a Bare customer, we will have provided copies of these when sending the original death certificate. We can provide additional copies if required.
4. Transfer of assets.
You may now request assets to be released and transferred either to the deceased’s existing bank account, or an account set up in the name of the deceased’s estate. This will ensure funds are ready to be distributed in accordance with the Will or the rules of intestacy.
Where the deceased person owned a real estate jointly with a spouse or another surviving person, the property will, in most cases, transfer to the surviving joint owner and does not form part of the deceased estate. However, if they owned a property asset solely, or as ‘tenants in common’ with another owner, the asset needs to be transferred into the Executor or Administrator’s name. It then forms part of the deceased estate and may either be sold or transferred to the appropriate beneficiaries.
Before any distribution of real estate assets, ensure the notice period requirements are met.
5. Sell assets (where required).
Often an asset must be sold so that the funds can be distributed. You will need to keep evidence of the valuations, advertisements and sales contracts as proof that you acted in the best interest of the estate by selling the property at the market rate.
6. Confirm assets have settled.
After making transfer or release requests, you’ll need to check that the transfers have been processed. For cash transfers, review the deceased estate’s bank account or trust bank account to check if funds were deposited. For real estate transfers, you can check if the property owner has changed by completing a title search.
7. Pay all final debts and bills.
Check for any outstanding debts and pay them now. If you engaged legal or accounting services to help manage the estate administration process and you no longer require further assistance, request an invoice and pay it before the deceased estate’s bank account is closed.
8. Lodge tax returns.
As the Executor, Administrator or Next of Kin, you are responsible for managing the taxes of the deceased estate for the time that it is in your custody. This may include preparing and lodging any of the deceased person’s individual tax returns outstanding from previous financial years; a date of death tax return; deceased estate tax return; and a trust tax return, if a trust account was in use.
You may only need to complete one of these, or a combination of these as one tax return, depending on your circumstances.
Tax returns completed on behalf of a deceased person must be completed using the ATO paper forms, rather than be submitted online. They are due for lodgement by 31 October of that financial year, for the financial year ending on 30 June (as per the usual individual tax return lodgement deadline). The words ‘DECEASED ESTATE’ must be written clearly on the top of the page.
The tax assessment will identify how much tax is payable from the estate. You can either pay it immediately or set aside that amount before assets are distributed to beneficiaries. For further information on tax returns and taxation matters for deceased estates, call the ATO on 13 28 61, visit the ATO website here, or contact a tax agent for specialised advice.
9. Determine the estate’s full value.
Once all debts and taxes have been paid, you can determine the estate’s full value by having property valued and finalising an inventory of assets. In most cases, you should be ready for distribution of the estate to beneficiaries. Depending on your state or territory, you may be required to publish a notice of intent to distribute. This notice allows the opportunity for any creditors, other family members or previous spouses to make a claim if they believe they may be a beneficiary entitled to an inheritance.
10. Distribute the estate.
The Will, if one exists, determines the beneficiaries’ eligibility of any inheritance and how much of the deceased estate they are entitled to. If no Will exists, the rules of intestacy follow a hierarchy, set by law in the relevant state or territory, of who should benefit from the estate and how much inheritance they may be entitled to.
Once you have determined the beneficiaries and each of their entitlements in accordance with the Will or intestacy rules, you should inform each beneficiary of the inheritance they will receive.
Finalise and distribute the deceased estate to all beneficiaries. Where there was no surviving joint owner of a real estate asset, you’ll generally need to determine if stamp duty is payable through the Stamp Duties Division of the Office of State Revenue.
11. Close off final accounts.
Congratulations! You have reached the final step of executing or administering the deceased estate.
If all debts and liabilities have been paid and the deceased's estate has been fully distributed, you may close any of the deceased person’s bank accounts held solely in their name and other accounts used during the estate administration process. Any insurances held while assets were in trust may be cancelled. You may also close off any email or social media accounts if you are sure they will no longer need to be accessed.
You should file all documents in a safe place for at least seven years, in case there is a tax or other inquiry into the estate administration later on. If that is the case, you will be required to produce documents as required.
This article is not legal advice. You should chat with your solicitor or accountant for specific advice on your personal or financial situation.