We get this question a lot in estate matters. If a person passes away and leaves a will appointing an executor to deal with their affairs, many assume that is all that is required to deal with the estate. However, an executor may find it is not that simple. Many banks, share registries and nursing homes will require a grant of probate or letters of administration before releasing the deceased’s funds to an executor of an estate. A grant will also be required by NSW Land Registry Services to transfer real estate from a deceased owner to their executor or beneficiaries unless there is a surviving a joint tenant.
What is a grant of probate? A grant of probate is a legal document issued by the Supreme Court authorising the executor to deal with the estate assets and distribute them to the beneficiaries in accordance with the deceased’s last will.
What if the deceased did not leave a will? If the deceased had assets of value or real estate but a will cannot be located, a grant of letters of administration may be needed. The relevant legislation determines who the beneficiaries of the estate will be, and an interested party can apply to act as the administrator of the estate. The grant of letters of administration once issued by the Supreme Court essentially has the same effect as a grant of probate.
Why are these types of grants needed? For the protection of the asset holders and creditors but also to protect the executor and the rightful beneficiaries of the estate. Once estate funds have been paid to an executor and distributed to beneficiaries, the funds can be difficult to recover if another will is subsequently located naming different beneficiaries or if there is an outstanding debt not paid prior to distribution. In some cases, executors have been found personally liable for distributing the estate funds incorrectly. The application process provides notification to other parties that a grant is being applied for so that it reduces the risk to executors of these sorts of problems occurring.
If you would like any further information in relation to the information contained in this article, please contact K.C. Hilton at WNB Legal, 0419 464 946.