In this article, we explore some of the complications that can arise in administering a deceased estate, and why it is often wise to ask a solicitor to help with the process. After someone passes away, complications can arise at the very beginning with the will or lack of a will or interpretation of the will. Some recent examples we helped clients with include:
Question: A family member has died. What should you do? Answer: Keep calm and ring the AV Estates team!
At this point family members often say, “It is a fairly straightforward estate, there will be no problems.” You would be surprised.
Complications may arise at the very beginning with the will or lack of a will or interpretation of the will. Some recent examples we helped clients with include:
A home-made will that did not appoint an executor: This meant that we had to make an application for Letters of Administration with the will annexed. The person with the greatest interest in the estate, the deceased’s partner, made the application but the documentation required was more complex and detailed.
No will, the deceased lived overseas and had assets in Australia: We made an application for Letters of Administration. However, because the deceased’s wife also lived overseas we had to appoint an attorney in Australia to make the application and at the request of the Supreme Court we obtained expert evidence about the rules of intestacy from a solicitor admitted in Australia and the deceased’s country of domicile.
There is also the administration of the estate when the assets are distributed to beneficiaries in accordance with the will, after Probate or Letters of Administration have been granted. Again, it’s not always so simple. Estate assets may include property, shares, cash, managed funds, shares in private companies.
Property may include the deceased’s principal place of residence, an investment property or commercial property subject to lease. There is a different tax treatment for each property depending on the circumstances and we discuss with and advise beneficiaries, with the assistance of accounting advice, as to the best options for either sale or transfer of property.
Sometimes one beneficiary wants to take an estate property as part of their share of the estate. This requires an appropriation of the property and consideration of the Duties Act, the Trustee Act and correspondence with Revenue NSW to ensure the best outcome.
Shares may be sold or transferred in specie to beneficiaries. The documentation required to transfer shares tends to be voluminous and must be carefully completed and executed by executors and beneficiaries. If care is not taken capital gains tax liabilities may be triggered, for example a beneficiary preferred to prepare the documents herself to save money. She included her husband, who was not a beneficiary of the estate, as transferee. Fortunately, she brought the documents into the office to check before lodgement. Had she lodged the documents, the transfer of shares would not have been in accordance with the will, and there would have been capital gains tax issues. We prepared fresh documents for signature.
Many charities have deductible gift recipient status, so it is often better to transfer shares in specie to charities and cash to individuals.
There is a lot to consider for any estate matter even if it looks simple and the legislation that we routinely consider on behalf of our clients includes:
- Probate and Administration Act (NSW) 1898;
- Succession Act (NSW) 2006;
- Trustee Act (NSW) 1925;
- Supreme Court Rules (NSW) 1970;
- Uniform Civil Procedure Rules (NSW) 2005;
- Corporations Act (Cth) 2001;
- Superannuation Industry (Supervision) Act (Cth) 1993
And that’s not all! Estates are never as easy as they seem. Let us take the worry away by helping you through the process.