Estates Administration & distribution
Estate Administration & Distribution.
What you need to know.
Administration of deceased estate
Estate administration is fancy legalese for “sorting out the assets and liabilities”. If there are any assets in an estate, there will be an administration stage of your loved one’s estate.
Estate administration is fancy legalese for “sorting out the assets and liabilities”. If there are monies, this would involve getting it out of banks and investment companies. If there are shares, this may involve updating dividend payments and/or transmitting shares. If there are properties, this may involve transmitting it into the name(s) of the executor(s) until it is sold or transferred.
Monies in Deceased Estates
Nearly every adult in Australia has a bank account. In fact, if you need to apply for Probate or Letters of Administration and there isn’t a bank account, you will need to explain to the Supreme Court ‘why not?’. If there are monies, administration involves confirming each organisation’s requirements, combining accounts and/or paying any credit cards or loans, completing paperwork to arrange release or transfer and providing proper direction for the release.
Shares in Deceased Estates
If there are shares, it will depend on whether the shares are held solely or jointly. Usually the process will involve updating dividend payments and transmitting or selling the shares. It’s always a good idea to be careful of any Capital Gains Tax implications before selling shares but if the right enquiries have been made with an estate accountant, the shares may be sold with the sale proceeds ultimately being distributed.
Property in Deceased Estates
If your loved one owned a property in their sole name or as tenants-in-common with someone else, you’ll have to apply for Grant of Probate or Letters of Administration. Once you have the Grant the property will usually need to be transmitted into the executors’ names by registering a Transmission Application with NSW Land Registry Service. In NSW, this is done through the online PEXA system.
If the property was owned by your loved one with someone else as joint tenants, a Notice of Death will need to be registered so that the property can be registered in the surviving owner’s name. In NSW, this is also done through the online PEXA system.
If a property was your loved one’s primary place of residence, it’s important to get the right advice if you’re thinking of the estate renting out the property; you may inadvertently cause the property to get hit with capital gains tax when sold. If you’re thinking of selling the property it’s important to know that it must be disposed of within 2 years of date of death for any capital gains tax exemption to apply.
Superannuation in Deceased Estates
If your loved one left a superannuation account, the trustee of the super fund will need to be notified of your loved one’s passing. It is especially important to confirm whether your loved one had a death nomination in place, whether it was a binding nomination and whether the super balance will form part of the estate assets.
It’s also important to check if there are any life insurance policies through the super fund and who the beneficiary of the policy is.
Tax in Deceased Estates
Tax in deceased estates is everyone’s favourite – can’t forget the tax (wo)man! Silver lining? Most people are happy when they’re told death duties in Australia were abolished in 1979.
If your loved one was lodging tax returns before their passing, the Australian Taxation Office will need to be formally notified of their passing by filing the relevant paperwork. If your loved one earned enough income in the tax year of their passing, a last individual tax return will need to be lodged. If the estate earns enough income from date of death until end of financial year, the estate will also need to lodge a tax return.
Our Estate Administration services
We can assist you in all aspects of administration of your loved one’s estate. We can provide you with the right advice when you need it most, we can prepare all documents, liaise on your behalf with all organisations and creditors of the estate and attend to registration of any and all property dealings on your behalf.
- If there are bank accounts, we can prepare the paperwork and arrange release of monies.
- If there’s property or real estate we can look after the conveyancing and/or transmission of property to Administrators, including preparing a Contract for Sale.
- If there are shares, we can arrange transmission to beneficiaries or sale through a broker
- If there is superannuation, we can help and guide you through the often voluminous paperwork.
Distribution of deceased estates
The final stage is distribution. Distribution needs to be done under the terms of the Will and inside the “executor’s year” – i.e. 1 year from the date of your loved one’s passing.
How and when distribution takes place will depend on several factors including what the Will says, whether there are any disgruntled beneficiaries, whether you have notice of any claim on the estate and what the nature of the assets are.
It’s very important to get the right legal advice before distributing any assets of your loved one’s estate as there are time periods that you need to be aware of. If you need Probate or Letters of Administration in your loved one’s estate, you shouldn’t distribute any asset of the estate until after 6 months from the date of your loved one’s passing to get the protection provided to executors under NSW legislation.
Executors need to act in the best interest of beneficiaries and part of these duties include keeping all paperwork and documentation relating to the assets and liabilities of the estate. Beneficiaries are entitled to an accounting – that is, a breakdown – of the estate assets and liabilities. While this accounting is often at the own cost of each beneficiary who makes the request, it’s important to prepare a distribution statement to confirm each beneficiary’s entitlement and what each beneficiary will receive when the time comes.
Our Estate Distribution services
We can assist you in the distribution of your loved one’s estate including effecting the distribution itself, confirming each beneficiary’s entitlement under the Will or under intestacy. We provide you with the right advice and prepare all documents so that each asset can be transmitted to a beneficiary or the assets sold – including acting on your behalf in the sale of a property – and the proceeds ultimately distributed. We can also assist in liaising and managing beneficiaries.
Depending on the assets, the provisions of the Will, the estimated timeframe of finalising the estate and the nature of the estate itself and type of beneficiaries, smaller (interim) distributions can be effected until final distribution can be effected. Other times, it is more practical and cost effective to do one final distribution of the estate once the estate is ready.
- Preparing a Distribution Statement confirming the breakdown of how the estate will be distributed.
- Accounting of the assets and liabilities of the estate for beneficiaries.
- Calculating and confirming each beneficiary’s entitlement.
- If there’s property we can transmit the property to beneficiaries.
We can assist you with giving the right legal advice on what to do, how to do it, when to do it, and get the paperwork done for you.