There is no doubt that attending to the administration of a deceased estate can be very challenging for an administrator \/personal representative. Not only are there some difficult decisions to be made but the demands of beneficiaries who are often family members and co-administrators, and also of well-meaning bystanders \u2018who are often family members\u2019 can take its toll on the determination, enthusiasm and resolve the administrator has in performing a task entrusted to them because of the confidence the deceased had in them when they were nominated to the role.<\/p>\n
Where no will exists, the administrator takes on this role often because of a duty to the deceased and their family or because they are the \u201cone that gets things done\u201d or because \u201cnobody else wanted to do it\u201d.<\/p>\n
In any case the administrator attends to their role with some trepidation and a little ignorance about what they need to do. No doubt they often receive guidance from someone who say they have all the answers and who suggests that they could do a better job.<\/p>\n
There is no simple way of dealing with the complexity of administering an estate but in this article, it is hoped to give some insight into some of the practical aspects of administration and the tasks to be carried out in that role.<\/p>\n
Set out below are some comments on administration which are mostly recorded as dot points for simplification and as a summary. It is hoped that this assists you with understanding the administration role. Where it does not give enough information or if the estate requirements or questions are very complex a discussion with RMO Law may be a better option rather than trying to figure things out for yourself or by asking for guidance from Google or the internet.<\/p>\n
To administer an estate a Personal Representative must attend to the following:<\/p>\n
Bank accounts<\/strong> – Identification of bank accounts are usually done by the administrator being given or by locating bank statements. A letter to the financial institution will reveal what funds are held in the deceased\u2019s name and the banks requirements for the funds to be released.<\/p>\n \u2022 \u00a0If the bank accounts are in joint names the surviving joint account holder will keep the funds in that account. Note: Each bank has their own requirements which must be attended to before the funds are released. This may take the financial institution weeks or months for the release of funds to be achieved.<\/p>\n Nursing Home \u2013 Refundable Accommodation Deposit (\u201cRAD\u201d)<\/strong> – These are the funds paid by the deceased to enter a nursing home. Company Shares<\/strong> – The shares are usually the deceased\u2019s investment in a company listed on the stock exchange but can also be an interest in a private company in which the deceased had a business interest or in a company acting as a trustee for a family or other trust. Real Property<\/strong> – The deceased\u2019s home or an investment property Superannuation<\/strong> Other assets<\/strong> It is the administrator\u2019s role to identify, pay and account for the estates liabilities before making a distribution to the beneficiaries. If the liabilities are not paid the administrator may be personally liable for the estate\u2019s unpaid debts.<\/p>\n \u2022 \u00a0The Funeral Cost<\/strong> is the first expenses to be paid and has priority over all other expenses. The Personal Representative\u2019s obligation<\/strong> is to ensure that all expenses are paid prior to the distribution of the estate to the beneficiaries.<\/p>\n If there is a will<\/strong> Beneficiaries if no will \u2013 (intestate)<\/strong> Learn more about administering deceased estates in part 2 of our next newsletter. In the meantime, call one of our expert wills and estates lawyers for more information.<\/p>\n To speak to one of our experienced Wills & Estates<\/a> lawyers call\u00a01800 999 529<\/a>, email\u00a0mail@rmold.newwebsite.live<\/a>\u00a0or submit an enquiry below.<\/p>\n
\n\u2022 \u00a0Non-joint accounts. The most important question – Is Probate or Letters of Administration required by the bank? If so, an application will need to be made to the Supreme Court before the funds are released.<\/p>\n
\n\u2022 \u00a0Probate or letters of administration are usually required before the RAD is released by a nursing home.
\n\u2022 \u00a0The refund process is very quick as the refund must, by law, be paid within 14 days of the nursing home being given a request for the funds and a certified copy of the grant of probate or letters of administration.<\/p>\n
\n\u2022 \u00a0The options when dealing with shares are for the shares to be transferred to a beneficiary, transmitted to the administrator or for the shares to be sold. If the shares are in a public company, they will be sold with the assistance of a stockbroker.
\n\u2022 \u00a0Taxation issues may arise.
\n\u2022 \u00a0Probate or Letters of Administration may be required in order to have authority to deal with the shares.
\n\u2022 \u00a0Jointly owned shares will transfer to the surviving joint owner.<\/p>\n
\n\u2022 \u00a0There are a few ways of dealing with real property including transmission of the property into the beneficiary\u2019s name (ownership) or transmission of the property into the administrator\u2019s name so that the property can then be sold or transferred.
\n\u2022 \u00a0Depending on the circumstances, probate or letters of administration are used to transmit property.
\n\u2022 \u00a0An original will can sometimes be used to transmit the property directly to the beneficiaries without the need to apply for a grant of probate.
\n\u2022 \u00a0If real property is owned in joint names as \u201cjoint tenants\u201d, the real property does not become an estate asset and the surviving joint tenant receives ownership of the property by recording the death in the title\u2019s office.
\n\u2022 \u00a0If the jointly owned property is instead held as \u201ctenants in common\u201d, the deceased person\u2019s share becomes an estate asset and is distributed pursuant to the instructions in the deceased\u2019s will or if there is no will, by the administrator applying the intestacy rules in the Succession Act 1981.<\/p>\n
\n\u2022 \u00a0If there is a valid \u201cBinding Death Nomination\u201d made by the deceased the nominated beneficiary will receive the death benefit from the superannuation fund. The deceased can nominate their estate as the beneficiary and in this case the funds form part of the estate for distribution by the administrator.
\n\u2022 \u00a0If there is no Binding Death Nomination, the trustee of the super fund will determine who will receive the death benefit. This will be a spouse, child, someone in an interdependent relationship or who is being maintained by the deceased. The trustee can determine to pay the death benefit to the deceased\u2019s estate and be dealt with as part of the estate distributions.<\/p>\n
\n\u2022 \u00a0Depending upon the nature of the assets and the requirements of the estate, they will be distributed, transferred or sold. If sold the sale proceeds will be distributed to the beneficiaries.<\/p>\nIdentify the Liabilities<\/h2>\n
\n\u2022 \u00a0Other Expenses<\/strong> may include the following:
\na)\u00a0 Rates
\nb)\u00a0 Electricity\/Gas accounts
\nc)\u00a0 Loans in the deceased\u2019s name- personal or housing loans
\nd)\u00a0 Tax owing by the deceased or by the estate
\ne)\u00a0 Legal Costs and fees
\nf)\u00a0 Money or debts owed by the deceased.<\/p>\nIdentify the Beneficiaries<\/h2>\n
\n\u2022 \u00a0The beneficiaries will be named in the will.
\n\u2022 \u00a0The executor\u2019s obligation is to ensure that the beneficiaries are properly identified and are \u201centitled\u201d to receive a distribution from the estate.<\/p>\n
\n\u2022 \u00a0The beneficiaries are those persons named in Schedule 2 of the Succession Act. The beneficiaries must also be \u201centitled\u201d to receive the funds from the estate.
\n\u2022 \u00a0An example of when a beneficiary may not be entitled to receive a distribution from an estate is where the beneficiary is an undischarged bankrupt.<\/p>\n\u8054\u7cfb\u6211\u4eec<\/h3>\n