One of the most commonly asked questions is “what is probate?”
What is probate is a question asked by many people who all of a sudden, find themselves dealing with the death of a loved one.
Simply put, probate is the official process that seeks to validate the deceased person’s will to enable the executor of the Will to administer the assets etc (the estate) of the deceased person. If the application for probate is successful, then the Court will award what is referred to as a “grant of probate.” The Grant of Probate will then allow the executor to distribute those assets in accordance with the Will.
The other primary reason why probate is needed is that because some financial institutions will not release assets or record a transfer to the executor for distribution unless there is a grant of probate. For examples institutions like banks, finance companies, superannuation funds, insurance and utility companies commonly require the grant. In the event that your loved one was residing in a retirement village, it’s likely that they will require a certified copy of the grant of probate before releasing the exit entitlement.
At Law By Dan, regardless of where you’re located, we can assist you with the Application for Probate.
Who Applies for Probate?
Typically is only the executor/s who is named in the Will.
It is a good idea if an application for probate is needed that you seek help from an estate administration lawyer to carry out this work for you. It can be complex and time-consuming and many executors start the process only to find that they do not have the time, skill or patience to successfully complete it. This, of course, places the estate in an awkward position. The legal fees associated with seeking a Grant of Probate are invariably less than $5,000 and that fee comes from the estate rather than an individual person’s pocket.
Are There Times When a Grant of Probate is Not Needed?
There are occasions when probate may not be required, but if you’re the executor, you’re best seeking legal advice on this before making the decision.
Limited and Low-Value Assets
In circumstances where the deceased has limited and/or low-value assets, as executor, you may be able to avoid probate.
The far majority of financial institutions will have a threshold that will set out the amount that they will accept before requiring a copy of the grant of probate. Typically the range for most institutions is between $20,000 – $50,000. Financial institutions refer to this threshold figure as being the “low-value cap.”
Importantly, if you believe the deceased’s assets are under the low-value cap, to successfully transfer those assets you will need to provide the institution with a certified copy of the Will and the death certificate. As executor, it is usually required that you will sign an indemnity and release form which basically indemnifies the institution in the event that there is any later claims on the estate. In this context, a claim may be from some person wishing to contest the Will, but more about that later.
Another important thing you need to be aware of is the proposed transfer of funds etc from the deceased’s account will require an account to be opened in the name of the estate and you can run into dramas here because some banks may require a Grant of Probate before doing so.
Property held as Joint Tenants
In circumstances where any of the deceased’s assets are held as “joint-tenants” then probate will not be required. For example, Dad has passed, but Mum is still alive and the family home is in both of their names. This asset technically does not form part of the deceased’s estate because it passes to the surviving joint tenant.
Remember this only applies to assets that are held as “joint-tenants.”
If the assets are held as tenants-in-common, it follows that the deceased’s share in the relevant asset will form part of the estate and will require probate.
Intestacy
Intestacy refers to a person who dies without a Will. If the deceased does not have a Will, you do not require a Grant of Probate.
However, in this circumstance, you will need to apply to the Supreme Court for “Letters of Administration.” This process is similar to obtaining a Grant of Probate, but can prove a little more complicated.
It’s wise to seek legal help in this regard. If you’re stuck, at Law By Dan we have lawyers across Australia who can assist.
The other time that Letters of Administration will be required is in the event that the deceased has actually got a Will, but the executor named in the Will has since passed away.
If your loved one has died without a Will, please contact Law By Dan and we can assist you with obtaining a grant of Letters of Administration.
How to Apply for Probate
Now that we’ve probably explained what is probate, the next step is to let you know how to apply for probate.
First things first, applying for probate differs from state to state. If you’re the executor and you’re going to do this work yourself, then it’s advisable that you make contact with the relevant court in your state.
How You Should Prepare before Applying for Probate
Getting ready for probate is usually where the executor realises the complexity and generally hard-work that can be required in getting a Grant of Probate. It’s for this reason that most people will seek legal help, knowing that the few thousand dollars that it will cost comes out of the estate and no individual’s own pocket.
Do a List of Assets & Liabilities
Compile the list of all the assets and liabilities owned in the deceased’s name and identify how they are held (jointly, tenants-in-common or solely)
Next identify the relevant institution that holds those assets and liabilities.
Following this, you need to assess the value of those assets. Obviously you may need professional help in this regard through either a lawyer or accountant.
Transfer the Property Held as Joint Tenants
In the event that assets are owned as joint tenants, then depending upon the state of Australia the assets are located, you may need to lodge a “Request to Record Death.” You will need to lodge this document with the relevant Land Titles Office and/or other registries to pass the asset to its surviving owner.
With Property Held as Tenants-in-Common Contact Financial Institutions
It may be the case that you find that some assets are held in the sole name of the deceased or as tenants-in-common. In this circumstance, in the event that the value of each asset held is under the low-value cap set by the institution then Letters of Administration or Probate may not be required. More than likely you will need to simply provide the relevant organisation with:
- a Death Certificate; and
- Copy of the Will (if it exists);
- Certified copy of identification for the Executor;
- Some form of Indemnity and Release document that is completed by the Executor.
Importantly, if the assets are close to the wire, that being, a little over the low-value threshold it can be useful to provide the relevant institutions with a letter from a lawyer suggesting that in the full circumstances of the matter, the assets should be released without the need of a Grant of Probate.
Typically some of the reasons that are used in such correspondence are:
- there are limited assets
- the estate is small and requiring probate would unnecessarily erode it
- the estate is uncomplicated with equal shares being left to beneficiaries
- there are no claims that are being held against the estate
Seek the Grant of Probate
On most occasions, you’re going to have to get a Grant of Probate, unless the circumstance is one of the above. However, if you believe that such an application for probate should not be necessary, contact one of our lawyers at Law By Dan.
