A guide to what to expect when someone passes away
If you’ve lost a loved one, the grief can be overwhelming.
On top of that, once you start to work through the complicated legal processes relating to Wills and Probate, you can feel lost. Especially if you have been appointed as the executor of the will.
Our Wills and Estate lawyers are here to help you.
In this blog post, we’ll talk about the legal ins and outs of settling an estate, so that you are armed with as much knowledge as possible.
But before we dive in, make sure you’ve read our blog relating to Probate and Deceased Estates first. This blog post will give you a broad understanding of what a Will and Probate is.
Now that you are familiar with Wills and Probate, let’s drill down and look at some of the most frequently asked questions our Melbourne estate lawyers are asked.
What does an Executor do?
If you’ve been appointed as the Executor of a Will, it’s easy to become confused about what you need to do.
There’s a good chance you’ve never acted in this role before and without a legal background, it can be tricky territory to navigate.
So, let’s start at the beginning.
Before you can do anything else, you need to find the Will and identify what duties have been assigned to you and others and what powers everyone has to act.
The second duty of the Executor, and one that many people are unaware of, is to organise the funeral. However, in most cases, close family or friends will make funeral arrangements, sometimes without an Executor's involvement.
This doesn’t mean the Executor has no role to play. As noted in step one, they need to find the Will and they need to do so promptly.
Because the person who has passed may have left instructions in their Will setting out their wishes regarding funeral arrangements.
In some instances, the next step is for the Executor to obtain Probate of the Will from the Supreme Court of Victoria, so they can deal with Estate assets. This is generally necessary when there is property owned by the deceased, or bank accounts/ investments with a value of $50,000.00 or more.
Many people who pass away haven’t made a Will. When this happens, the person’s family will need to decide who should act as the Administrator of the Estate. The Administrator’s role is much like the Executor’s role. However, before they act, they’ll need to apply to the Supreme Court of Victoria for a Grant of Letters of Administration.
In legal speak, the fourth duty of an Executor is to 'realise' the assets of the Estate. In plain English, this means they need to identify all the Estate assets. They then need to tell all interested parties, for example, banks that the person who owned the assets has passed away, and organise for the assets to be paid into an account in the name of the Estate.
In addition to this, the Executor will need to pay all the debts owed by the deceased person when they passed away. The Executor also needs to pay tax on any income earned by the Estate from Estate funds, for example, if the deceased owned an investment property or shares, any rent or dividend income received after the date of death will be taxable to the Estate, rather than the individual.
The fifth duty of the Executor is to distribute the remaining assets according to the instructions left in the person’s Will. This is often referred to in legal circles as “the residue.”
Can I still act under a Power of Attorney for someone who has died?
The short answer to this question is no. Once someone dies, any existing Power of Attorney ceases and the role of the Executor or Administrator begins.
Attorneys who have been acting under a Power of Attorney, no longer have any authority to act under that Power of Attorney once that person passes away.
However, an Attorney is often appointed as the executor of a client’s Will. In this instance, they can continue to manage the person’s affairs, but they are acting as an Executor and not under any authority that they previously had under a Power of Attorney.
If you were an Attorney for the person who has died but someone else is appointed as Executor by their Will, you must immediately stop handling their affairs.
How long does the Probate process take in Victoria?
The truth is, it can take a substantial amount of time. This is because several things need to occur before the Estate is finalised.
- Applying for a Death Certificate. This can take up to 6 weeks to be issued by Births, Deaths & Marriages, but it can be a lot longer if a Coroner's Report is required.
- Next, the assets, and liabilities of the Estate need to be determined.
- Once the assets and liabilities have been determined, an advertisement needs to be lodged to notify the public that there is an intention to apply for a Grant of Probate. This advertisement needs to give details of the date of the Will. It gives notice in case anyone else is in possession of a more recent Will, or has concerns that the deceased did not have capacity to make a valid Will at the time it was signed. If there are issues such as this arising from the notification, the relevant questions can be raised before the application is submitted to the Court for approval.
- After 14 clear days, an application can be made for a Grant of Probate (or Letters of Administration). This application needs to be reviewed by the Probate Office at the Supreme Court of Victoria. It can take a week or two for the application to be granted.
- It can then take 6-12 months to settle the Estate (i.e., payout any debts and distribute the remaining assets).
After someone dies, who can get a copy of their Will?
Section 50 of the Wills Act 1997 (Vic) provides the following people with a right to see the last Will of the deceased:
- Any person named or referred to in the Will (whether as a beneficiary or not). Even if they have only been noted because the Will maker wanted to exclude them as a beneficiary.
- Any person named or referred to in an earlier Will as a beneficiary. This means that, if you have a copy of an older Will in which you were a beneficiary, you can ask for a copy of the most recent Will.
- Any spouse of the deceased at the date of the Will maker's death. This means a person the Will maker was married to when they died.
- Any domestic partner who is in a registered relationship with the Will maker or who lived with the Will maker as a couple.
- Any parent, guardian, or children of the Will maker.
- Any person who would be entitled to a share of the Estate if the Will maker had died without a Will.
- Any parent or guardian of a person under 18 years of age referred to in the Will.
- Any parent or guardian of a person under 18 years of age who would be entitled to a share of the Estate if the Will maker had died without a Will.
- Any person who has a legal claim against the Estate of the Will maker (however they will need to provide proof of their claim before they can see the Will).
Can an Executor be a Beneficiary?
There is nothing stopping an Executor of the Will from also being a beneficiary of the Will. It’s actually really common. If there is only one intended beneficiary of the Estate, then it’s often a good idea to make them the Executor as well. It simplifies matters immensely.
That said, trouble may arise if the Executor has any conflict of interest.
Consider this scenario:
A person has been married more than once. They have children with their first spouse but not their second. They leave their home to the second spouse with the stipulation that the house is passed down to their children when the second spouse passes.
In cases such as this, making the current spouse or the child the sole Executor may be the source of conflict.
Because they may both feel like they have a valid claim to the house. When situations such as this arise, the Estate is likely to continue in administration for a long time and incur a lot of costs.
If you find yourself in a situation where you have been named as the sole Executor, but you have a conflict of interest with another beneficiary, you will need to tread carefully. Yes, you can still act as the Executor, but you need to ensure that you act in an objective and balanced way.
I am a beneficiary of a Will, and the Executor doesn't seem to be doing anything. What can I do?
Whilst it can be frustrating, it is important to understand that the administration of an Estate can take a lot longer than most people think.
In most cases, the beneficiaries will not receive their inheritance for 9 to 12 months after a person has passed away, and if there is a challenge to the Will it can take even longer than this.
In some cases, however, excessive delays may be considered a failure to act by the Executor. In general, if an Executor has not brought an application for a Grant of Probate within 6 months after the death, they may need to provide an explanation, or risk being removed from the position on the basis that they have demonstrated an unwillingness to act.
If an Executor obtains a Grant of Probate and then fails to deal with the Estate, they may also need to justify any excessive or unreasonable delays.
It may be helpful to get specific legal advice about this, as the timeframes are fairly flexible, and depend on the circumstances of the Estate. Our Wills and Estate Lawyers can help with this.
Does a Will cover all assets of the Will maker?
In general, a Will covers assets that the Will maker owned in their sole personal name.
Assets owned jointly will not be included in the Will. Nor will assets owned by companies or family trusts.
Assets owned by companies controlled by the Will maker can often be passed to beneficiaries by transferring the shares in the company owned by the Will maker to the beneficiary. This can only happen when those shares are held solely in the Will maker’s personal name.
Additionally, sometimes a Will contains a provision to pass control of a trust to a particular person, or the Will maker may have prepared supplementary paperwork to deal with the family trust.
If the deceased had an interest in a family trust, it will be particularly important to obtain professional legal and financial advice about how this is dealt with after their death.
Does Victoria have death duties?
There is no State or Federal duty payable on a Deceased Estate; however, there is a fee payable to the Court when an application for a Grant of Probate or Letters of Administration is lodged. This fee is based on the value of the Estate.
However, the Executor needs to ensure that the deceased’s tax obligations have been met before any assets can be distributed.
It is also important to note that superannuation death benefits may be taxable after your death if they are paid to a person who does not qualify as a tax dependant. In general terms, a tax dependent is a spouse or domestic partner, minor children, financial dependent, or interdependent.
Can an Executor named in a Will get paid in Victoria?
An Executor may be paid for their time in administering an Estate provided one of the following applies:
- There is a provision in the Will allowing for the payment of the Executor;
- All the beneficiaries of the Estate agree to the payment; or
- The Court agrees to the payment, based on the Executor Commission provisions of section 65 of the Administration and Probate Act 1958 (Vic).
In relation to Court approval, whether a commission is permitted will be based on the size of the estate and the "pains and trouble" incurred in its administration.
It is important to note that this provision allows for up to 5% of the assets to be paid to the Executor as commission, although the award may be less than this, depending on the work involved in the administration of the Estate. Generally speaking, the practice of the Courts has been to award commission on this basis within the range of 1% to 3%, and the amount generally depends on the size of the Estate and the amount of work involved in the administration.
If you’re still feeling confused by the intricacies of Wills, Estates, and Probate, contact one of our Wills and Estates Lawyers today. You don’t have to walk through this tough time on your own. We are ready and waiting with our expertise to make the process as easy as possible for you. You can reach out directly to our experienced Wills & Estates lawyers, Rohani Bixler, Luke Palmer or you can phone on +61 3 9822 8588 and speak to them directly.