Find out more about why you need a grant of probate in NSW and when it may not be required. Also, what steps are necessary and how long you should allow for the process. A grant of probate is generally required for an executor if they wish to obtain the authority to manage the estate of the deceased. There are some situations when it is unnecessary; it is crucial to know the cases when it is not needed as it can save you a lot of time and money and can avoid personal liability. Let’s take a closer look.
Why Do You Need To Obtain A Grant Of Probate?When someone dies, their estate needs to be effectively managed. The executor named in the will of the deceased person must obtain authorisation to administer the estate. The Supreme Court of NSW will issue a grant of probate, which will enable them to dispose of the assets and liabilities of the deceased person. Probate protects the interests of those who hold the assets. This may include a bank, financial institution, super fund, insurance companies, or utility companies. It ensures that the estate assets are transferred to the correct beneficiary as stated in their will. Retirement homes will generally require probate to release the exit entitlement of the deceased.
When Are Letters Of Administration Required?If someone dies intestate, without a valid will, the Supreme Court will need to appoint an administrator to manage the deceased’s assets. They are not eligible for a grant of probate but will receive a similar legal document called letters of administration. The administrator acts similarly to an executor to manage the deceased person’s estate. The documentation provides the individual with the necessary authorisation to distribute the assets. Administration letters are also required in New South Wales when there is a valid will, but the executor listed has passed or does not wish or cannot act as the estate’s executor. The Supreme Court will nominate a substitute executor or an administrator, who will generally be a family member who has a share in the deceased’s estate.
When Is A Grant Of Probate Not Required In NSW?Many organisations may ask for a grant of probate to indemnify themselves against any future claims that they gave away the deceased person’s assets to the wrong beneficiary. Therefore, In most cases, an executor will require a grant of probate to access the assets. There are some times where it may not be necessary.
Property Held As Joint TenantsProbate is not necessary if a property or asset is held as joint tenants, as the surviving joint tenant will automatically have the property passed onto them. Any jointly owned assets will not form part of the deceased’s estate, as the principle of survivorship applies. As well as real estate, this can also include bank accounts, motor vehicles, and other jointly owned items. Unlike a joint tenant, where a spouse may own a home with their partner, probate is not required. Tenants in common, where at least two or more people own shares in a property, will require probate, as their share in the property may not be equally split and will therefore need to become a part of the deceased’s property pool. Regardless of the proportion of ownership, tenants in common will always require probate.
IntestacyIn some instances a deceased person may not have left a will. In Australia, dying without a will is known as intestacy, or having died intestate. When this occurs, obtaining probate is not required. An immediate family member will need to apply for authorisation from the Supreme Court of New South Wales to release the assets. This may also occur when the deceased person’s will can not be found.
Low-Value AssetsAfter establishing the value of the assets and liabilities, an executor can estimate the value of the property pool and determine whether the deceased estate will fall under the low-value threshold. Financial institutions and the share registry have a low-value cap. If the total value of the assets falls under this amount, then probate may not be necessary. The administrator will need to provide a certified copy of the will and the original death certificate to transfer the low-value assets. The executor or administrator may also need to sign a release form and indemnity, which can protect against claims on the estate. There are circumstances where the asset pool may be borderline on the low-value threshold. In this instance, seek legal advice from an experienced lawyer to help you draft a cover letter to explain why probate is not necessary. Your arguments may include:
- The asset pool is minimal
- Only one financial institution falls over the threshold
- Probate would be expensive for a small estate
- The estate is left to the surviving children in equal shares
- No claims have been made against the deceased person’s estate
What Are The Low-Value Asset Thresholds?To determine the value of a small estate, check with the individual asset holders to find out their low-value cap. If the balance is over their limit, you may still need to obtain letters of administration from the NSW Supreme Court to release the funds. Each organisation may have different limits and will be able to advise whether probate is required. Probate is generally needed in NSW if the value of the individual assets are more than $50 000.
How Do I Know If Probate Is Required?Before asking each organisation if probate is required, you must first identify all of the deceased person’s assets and liabilities. Establish the ownership holding, for example, individually owned, jointly owned or held as tenants in common. Find out where each asset is held, whether it be the bank’s name, land titles office or share registry. Establish the current market value of each asset and determine any associated liabilities. After gathering the necessary information, you can approach each organisation to confirm their requirements, low-value thresholds and procedures for releasing assets.
How Long Does It Take To Obtain Probate?After probate applications have been submitted to the Supreme Court, it does not take long for the court to grant probate. But beforehand, several steps need to be taken before the application can be submitted, of which many can be very time-consuming. They include:
- Finding the original will
- Obtaining the death certificate
- Publishing an intended application for probate notice
- Completing the necessary paperwork, including an affidavit
- Compiling an inventory of the estate, calculating the assets and liabilities