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A few things must be done in the case of the death of someone dear to you to ensure that the wishes of the deceased are carried out as they're intended. It's challenging for a family to deal with the loss of a loved one. Even if the person who died had a will, other legal steps might still need to be taken.
For instance, if they had a significant property, then a process known as probate may be required. The complexity of the estate planning process is dependent on the status of the individual's will. Here are the most important things you need to know regarding the probate process in Australia:
Simple Definition Of Probate
To ensure the validity of a deceased person's will, a legal procedure known as probate is required. After receiving a grant of probate from the court, the will and executor are legally recognised as legitimate. It gives the executor of a deceased person's estate the authority to manage the assets of the deceased person. Most banks, insurance firms, and superannuation funds require a grant of probate when it comes to the value of assets.
For example, suppose a person dies with a will. In that case, their executors or administrators will need to apply for a grant of probate through the Supreme Court of the State in North South Wales. Upon the grant of probate, the executor has the authority to collect the estate's assets, which include the proceeds of bank accounts, shares, and real property.
Know When Probate Is Necessary
Probate is required when a person dies and leaves behind certain assets. For instance, if a bank wants to release money from a bank account, it should first ask for a grant of probate. This is only required if the value of the estate exceeds a certain amount. Generally, financial institutions have policies related to deceased estates.
Also, if the sole owner of the real estate passed away, then the transfer of ownership might need to be done through a grant of probate. In addition, if the person who passed had multiple shares in a company, they might require a grant of probate. If the sole owner of real estate was two individuals, then the ownership would be transferred to the second owner.
On the other hand, if a person died without a will, a probate process can also happen. It involves the transfer of assets that are legally entitled to be distributed under the law of inheritance.
Process In Applying A Probate
In most cases, the executor specified in the will handles probate. In the absence of a will, the state probate court decides inheritance. The probate procedure and timeframe would depend on the state, but, in general, such processes are required.
Step 1: You can only act as the legal executor of the estate if the person died in the county where they resided. This step requires you to file a petition to be acknowledged as the executor.
Step 2: You'll need to notify all creditors, beneficiaries, and heirs that the estate is in probate (as required by the court). Several states may require the publication of an announcement in a newspaper.
Step 3: Compile and provide to the court a list of all assets that are subject to probate, including, but not limited to:
Step 4: Review all the debts and unpaid bills of the estate. This step can help you determine how the money will be used. You'll need to go through all of the estate's documents to gather details. You'll also need to file a final income tax return.
Step 5: You'll distribute the remaining assets to the appropriate heirs and according to the will after all claims, obligations, and expenditures have been paid.
Step 6: You'll petition the court to close the estate and relieve you from the job of the executor after you've submitted all receipts and documents to the court.
Step 7: A probate lawyer may assist you if you'd want some advice while you go through the procedure. State-licensed attorneys with experience in helping executors settle an estate are known as probate lawyers.
Cases When To Avoid Probate
Careful preparation may completely prevent probate. For others, this minimises legal bills and avoids the estate tax, which may eat up a large portion of a rich fortune. Probate avoidance might help safeguard privacy since certain records may be private.
A revocable living trust is one of the most common strategies to avoid probate. The trust creator may utilise the assets throughout their lifetime. The trust assets transfer to the beneficiaries upon death by operation of the trust agreement. In this case, no probate is required.
Also, life insurance plans avoid probate. Your beneficiary will get the death benefit immediately without going through probate. In addition, some retirement funds aren't probated. The account owner specifies a beneficiary who receives the account balance upon death. Payable on death accounts works similarly.
Moreso, real estate possessed as joint tenants or joint tenants in whole also transfers without probate. It has two owners. When the original owner dies, the second owner inherits the property. Most families will interact with a probate court, although the procedure is usually simple and affordable.
The Need For Letters Of Administration
Letters of administration and grant of probate are both used when a person dies without an estate plan. Letters of administration are a court order that allows the administrator to distribute the dead person's assets without a valid will. When a person dies in New South Wales and has owned assets, the law enforces who will receive their assets following their death. It's called the rules of intestacy.
Only those entitled to the whole estate or a portion of the estate may be granted administration. An attorney may be granted administration of the estate if the sole individual authorised to the estate resides outside of Australia.
Accordingly, the grant is given to the departed person's 'next of kin,' which is their closest relative. The court might grant administratorship to:
Suppose there are no surviving relatives or none suitable or willing to petition for the award. In that case, the court may give administration to any other person deemed appropriate by the court or NSW Trustee & Guardian.
Common Issues After A Probate
Here are the common issues that relatives or parties involved face after probate:
Asset management in Australia is complex. The length of probate is determined by the company, bank, title office, or other institutions. The fact that each institution may have a unique set of requirements for each state adds to the confusion.
If someone dear to you dies and names you as the executor of their will, it's essential to know what probate implies in Australia. A reseal of probate is also necessary if the deceased owns assets in numerous states within Australia or other countries.