Complete guide to deceased estate administration.
ESTATE PLANNING

Estate Administration: 10-step guide to deceased estates

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  • Mel Buttigieg
  • Writer, Bare
  • October 13, 2020
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When someone dies, an Executor of a Will or an Administrator takes ownership of the deceased estate administration and to make funeral arrangements. You should understand the estate administration steps that need to happen if you are in the process of writing your Will, or if you are executing or administering a deceased person’s estate.

There are generally a lot of things that need to happen to take care of the deceased estate administration. The process can take months to complete – and in some circumstances, it can even take years. Whether the deceased person had a large or small estate, there are usually many steps involved in their estate administration.

Many people don’t know where to start, nor do they have the energy to think about it while they are trying to cope with their immense grief. So, we’ve put together this 10-step guide to estate administration to help Executors and Next of Kin to take care of the practical things that may need to be done when someone dies.

This estate administration guide for Executors and Next of Kin will explain what generally needs to happen after in the weeks and months after someone dies. It is broken down into the following sections:

 

This estate administration guide will assist you as you work through each step of the process. However, if you require assistance at any stage, give us a call on 1800 202 901, and we will connect you with Bare’s specialist estate administration partners.

Immediate Steps

This estate administration guide explains the general process of what needs to be taken care of after death. This initial step outlines what needs to happen immediately, including identifying an Executor or Administrator.

Determine Who Has Legal Authority

Immediately after someone dies, there are a few things that need to be taken care of. Firstly, you will need to determine who has the legal authority to make decisions and if they are willing and capable to Execute. An Executor or Administrator carries out the wishes of a person after they die, generally with regard to funeral planning and managing the deceased estate, including the distribution of assets to beneficiaries named in the Will (where one exists).

Locate the Will

Early in the estate administration process, you will need to determine if the deceased made a Will, then locate it. It will guide most of the next steps in the estate administration process. A Will (Last Will & Testament) is a legal declaration of a person’s final wishes, as to the disposition of their property and assets after death.

Perhaps the deceased left the original or a copy with you, as the Next of Kin or Executor. Other popular methods of Will storage include at your bank, usually in a safe deposit box or envelope. If the box or envelope was held in the deceased’s name only, you can generally gain access if by providing the bank with written proof that you are the executor named in your Will. In most cases you can do this by presenting a copy of the Will (if you have one) and your ID to the bank.

If there is a Will

Where a Will exists, it should nominate an Executor, or Executors. It should be established that they are willing to take on the responsibility to Execute the Will and the deceased estate. If they are, you can proceed through the estate administration process. However, if the Executor named in the Will elects to withdraw from the Executor duties, they must write a letter of renunciation and lodge it with their local Probate Office.

You will need to determine if the deceased made a Will, then locate it.
You will need to determine if the deceased made a Will, then locate it.

 

What if there is no Will?

Where no Will exists, you will need to determine who the senior available Next of Kin is and if they are willing and have the capacity to take on the duties of Administrator. An Executor or Administrator’s role is to act in good faith and in the best interest of the deceased estate. It’s their job to establish the value of the estate, administer it and distribute the estate to the deceased person’s beneficiaries.

When someone dies without a valid Will, certain laws of intestacy apply and the estate will be distributed under a standard formula set out by state government law. The formula varies slightly between state and territory, but generally in absence of a Will, your assets will be distributed by default to a surviving spouse and children. If there are none, then the estate goes to family members.

What if there are multiple Wills?

If multiple Wills (or multiple versions of Wills) are found, you need to determine which is valid. This is crucial for the estate administration process.

If you are unsure which Will is valid, it is recommended that you seek help from an estate planning specialist. Give us a call on 1800 202 901, and we will connect you with Bare’s specialist estate administration partners.

Notify Family & Friends

The passing of a loved one is a difficult time, so at this early stage, it’s often best to only notify immediate family and close friends. The loss may be less confronting if the passing was expected. However, if the death was unexpected it is usually more difficult to bear the news. If possible, it can be best to deliver such tragic news in person. You may find it helpful to write down and practise what you will say to help you, or bring someone with you to offer support.

People accept death in different ways, and every situation may be different. Be prepared that the person receiving the news may want time to process the information alone. If the passing happened peacefully, it can be helpful sharing this information as you break the news, as it can help put family and friends at more ease.

You might want to hold off on posting about the passing on social media until other family members have been notified, and request that family and friends also avoid posting on social media at this time.

Gain access to the deceased’s residence

As the person who is likely to become the Executor (someone nominated to administer the deceased estate) or Administrator (the senior Next of Kin to administer the estate if there is no Will), you will need to obtain access to the deceased person’s home. It’s a good opportunity to request to gain access to the home while you are informing immediate family members of the passing. Alternatively, you can organise a time to visit later on. If you don’t already have a set of keys you should arrange to obtain a set as soon as practical.

If the deceased person lived alone, it may be appropriate to request all keys for the duration of the estate administration process. It’s important to ensure nothing is taken from the deceased person’s home. Beneficiaries may want to enter the premises to claim possessions now, however this may be considered illegal, as the Executor or Administrator is required to compile a list of all the deceased person’s assets to make a valuation of their estate.

Notify other family and friends of the death

Once the most immediate family, friends, care providers and employer or business partners have been informed of the death, you can bear the news to other relatives and friends. It may help lighten the load if you ask other family members to pass on the news to others. You may choose to use social media to inform others of the funeral or memorial service later on.

Notify Care Services and Employers

Notify care services of the death

If the deceased person was receiving care – either in their home or in a nursing home – the relevant service providers will need to be notified of the passing.

If the deceased person was receiving services provided by their local council, for example Meals on Wheels, you should also notify the council so they may update their records and cancel the services – unless the services are still being used by a surviving dependant living at the residence. In addition, if the deceased subscribed to a regular meal delivery service like Marley Spoon or Hello Fresh, this will need to be cancelled immediately.

We will explain notifying government and relevant organisations later as part of Step 4.

Notify employer or business partners of the death

If the deceased person was still working or had business dealings, their employer or business partners will need to be notified of their passing.

Companies may want to the Next of Kin or another family member to come to the workplace to collect personal belongings and return any keys or company property. Their administrative policy may also require a family member to meet the Human Resources department in person. You shouldn’t feel pressured to do this immediately. If you need more time, you should request more time or find out if another family member can do this on your behalf.

Notify any Professional Associations (if applicable)

If the deceased person held any professional memberships like Chartered Accountants, Engineers Australia, Law Society, etc. you will need to notify them of the death. If members were close contacts of the deceased person, they may even wish to attend the funeral or memorial service, so you might wish to pass on those details once arranged.

You may need to provide a copy of the Death Certificate as proof to cancel the membership. The process will be explained over the next few steps.

Step 1. Funeral Arrangements

This step outlines the process of engaging a funeral director and arranging transportation of the deceased person.

Determine Any Funeral Intentions

If any funeral directive or pre-paid funeral plan exists, contact the service provider to advise them of the death and determine what services are covered.

Review funeral intentions outlined in the Will

You should first check if any pre-arranged funeral, pre-paid funeral or funeral insurance plans are in place. Sometimes the deceased person’s funeral wishes may be outlined in their Will, or in a separate document stored with their Will.

Locate an Advance Care Directive

If the deceased person’s funeral intentions are not included in the Will, or if you have determined that no Will exists, but there is a Living Will, Advance Care Directive or Advance Health Directive (or similar) there may be funeral instructions in that document.

Organ and body donation

If the deceased was registered as an organ donor or body donor, you will need to notify the relevant register immediately, as collection needs to happen as soon as possible.

For organ donation, contact the Organ Donor Register on 1800 777 203.

For body donation, there is no central register so you will need to contact the university where the deceased registered as a body donor. The university will arrange and pay for their own cremation or burial in due course, so there is no need to make your own funeral arrangements. You may wish to arrange a memorial or celebration of life (a service held without a body present). This is explained later in this step.

Be mindful that registering for body donation doesn’t guarantee that the body will be accepted at the time of death, as the university can refuse the body for a number of reasons. If this is the case, you will need to make funeral arrangements. Refer to the next item in this step for details on arranging a funeral.

Donating your body to medical science
If the deceased was registered as an organ donor or body donor, you will need to notify the relevant register immediately, as collection needs to happen as soon as possible.

 

Engaging a Funeral Director

A funeral provider can be engaged after passing, once death has been verified. If your loved one has passed at a hospital or nursing home, you will need to contact a funeral provider, then the funeral provider will liaise with the facility to organise collection of the deceased. If they have passed at home you will need to have had a doctor or palliative care nurse come to the home and verify passing first. If death was not expected and a doctor will not provide a cause of death certificate, the police will need to be called and your loved one may need to go to the Coroner.

Firstly, you should establish if the deceased person had a pre-arranged or pre-paid funeral plan in place. As part of estate planning, funeral instructions or wishes are usually outlined in the Will or an Advance Care Directive / Advance Health Directive (or similar). If the deceased person’s funeral intentions are not included in the Will, or if you have determined that no Will exists, they may have made an Advance Care Directive or Advance Health Directive (or similar). An Advance Care Directive usually outlines a person’s wishes for a funeral service and provides other instructions that may guide you now.

If you can establish that a funeral has been pre-arranged with a particular provider, or if funeral wishes have been specified, contact the nominated funeral provider to advise them of the death and arrange collection. If there was a pre-paid funeral, determine what services are covered.

If no funeral intentions are known, you will need to consult the Next of Kin and use your discretion to make arrangements with a chosen funeral provider. If you would like to arrange a funeral with Bare Cremation, you can call us any time of day or night on 1800 071 176 or fill in your details on the website.

Arrange the Transfer of Your Loved One

The funeral director will arrange to collect the deceased from their place of passing and transfer them into their care to prepare for the funeral, as arranged by the Executor, Administrator, or Next of Kin.

In some locations, you will need to sign an Authority to Release form, giving the funeral provider authority to collect your loved one.

Death Certificate and Other Documents

The deceased person’s Next of Kin is required to complete a number of documents as part of the estate administration process.

Medical Certificate

Your funeral provider will liaise with the doctors to organise these documents. In most instances, the Next of Kin will not need to be involved.

If the death occurred at home, the funeral provider will ask you for the deceased person’s last treating doctor’s details.

If the deceased person was transferred to the Coroner after death, your funeral provider will contact the Coroner’s office and obtain the necessary paperwork.

Application for Cremation Form

If a cremation will be taking place, an Application for Cremation Form is required, sometimes with other forms depending on your state or territory. The funeral provider will advise the executor, administrator, or Next of Kin of the process required to complete, sign and return the required documents.

Each state in Australia has its own guidelines that determine how a death is to be registered. Your funeral provider will gather the information required about the deceased from you and then register the death with the Office of Births, Deaths and Marriages on your behalf. The death certificate will then be posted to you from the Office of Births Deaths and Marriages. This certificate can take up to four weeks after the cremation to arrive, and longer if a Coroner is involved. Typically you’ll need a Death Certificate to cancel bills, bank accounts, utilities and administer other parts of the estate.

Register Death and Apply for Death Certificate

If any funeral directive or pre-paid funeral plan exists, contact the service provider to advise them of the death and determine what services are covered. If you would like to arrange a funeral with Bare Cremation, you can call us any time of day or night on 1800 071 176 or visit the Bare Cremation website here.

Review funeral intentions outlined in the Will

You should first check if any pre-arranged funeral, pre-paid funeral or funeral insurance plans are in place. Sometimes the deceased person’s funeral wishes may be outlined in their Will, or in a separate document stored with their Will.

 

Claim Funeral Insurance

If the deceased had funeral insurance cover, this can be claimed now. You don’t need to wait for an official Death Certificate to make the claim. The beneficiary can make a funeral insurance claim with an application and a copy of the Medical Cause of Death certificate, which the funeral provider can supply.

Funeral insurance benefits may still be claimed if the funeral has already been arranged, as there is no requirement that the money must be used to pay for a funeral.

Arrange the Memorial Service

Depending on your chosen funeral provider, you will need to determine what sort of funeral or memorial is most appropriate, and make arrangements with the funeral director.

If you’re arranging a Bare Cremation, we provide a direct cremation service. This is a cremation that happens privately, separate from any memorial. A direct cremation allows the deceased person’s family to plan a more personalised memorial that celebrates their loved one’s unique life, at a later date, when they are more emotionally ready.

Despite having a no-service cremation, it is important that something is done to celebrate and honour your loved one’s life. You may still wish to have a more formal funeral service or memorial, even though the coffin will not be present – but you don’t need a funeral director when planning a funeral.

There are many unique ways to memorialise someone. We’ve had families have barbeques in the garden, a meal with family and friends, a long hike and scattering in the bush, a fireworks show – the list goes on! For some inspiration, read our articles memorial ideas with ashes and types of memorials after a Bare cremation.

If a cremation is being arranged, your chosen funeral director will arrange for the created remains, commonly referred to as ‘ashes’, to be collected or delivered. Once the ashes have been received, it’s up to the Next of Kin to determine if they want to keep the ashes in an urn at home, or arrange a scattering. Feel free to call Bare Cremation for suggestions on 1800 071 176.

you will need to determine what sort of funeral or memorial is most appropriate, and make arrangements with the funeral director.
You will need to determine what sort of funeral or memorial is most appropriate, and make arrangements with a funeral director.

 

Step 2: Gather Required Documents

The next step in the estate administration process is the gathering of required documents. This step will explain the documents you’ll need, as an Executor, Administrator or Next of Kin, and where to find them.

Obtain Grant of Probate and Letters of Administration

Probate is a legal process required to validate a deceased person’s Will, to be carried out by an Executor named in the Will. There are two types of these grants: Probate, where there is a Will; and Letters of Administration, where there is no Will. Grants of probate and Letters of Administration are collectively referred to as Grants of Representation.

Why do you need a Grant of Representation?

A Grant of Representation gives an Executor of a Will or Administrator the legal right to administer the estate of a person who has died. When applying for Probate, you will need to complete a number of forms and provide documents such as a Death Certificate. A Grant of Representation is needed before a deceased estate can be distributed to any beneficiaries. Once it has been granted, the court issues a document confirming that the Will is valid and also confirms the appointment of the Executor.

A Grant of Representation also allows the assets to be transferred to the name of the Executor or Administrator so they can manage them: distribute them to beneficiaries, or sell them.

In the meantime, the deceased person’s bank accounts will be frozen until the Grant of Representation is obtained. In cases where Probate is not required, the bank may simply request the Executor to sign an indemnity before releasing the deceased’s funds.

How to apply for a Grant of Representation

The process differs depending on the state or territory. But generally, if either a Grant of Probate or Letters of Administration are required, first you will publish a statutory notice of your intention to apply for a Grant of Representation with the Supreme Court in the relevant state. This will allow any creditors and family members owed money by the deceased estate to make a claim. It also allows any other nominated executors, or anyone who may have another Will to discuss the intended application.

You’ll need to prepare the relevant documents for submission, then apply to the Supreme Court in your state. You can find out more with the following links:
You can find out more with the following links:

 

When should you seek legal advice?

If the deceased left no valid Will, or a dispute between multiple nominated Executors has arisen, it is recommended that you seek help from an estate planning specialist. Give us a call on 1800 202 901, and we will connect you with Bare’s specialist estate administration partners.

Obtain Insurance Documentation

Insurance benefits may form part of the deceased’s estate for distribution. So it will be important to determine what insurances policies (if any) were held; if a claim can be made; and the total value of a claimable benefit applicable to the estate.

If any of the policyholder’s benefit is to be paid out, this will need to be added to the estate’s asset inventory.

Any insurance tax invoices you come across through searching the deceased’s emails, physical bills and other documents will help you to understand what insurances are in place, such as health, income protection, home, contents, mortgage protection, car, other vehicles and pet insurance.

We’ve summarised what’s required for the main types of insurance benefits below.

How to make an insurance claim

The specific process of claiming an insurance policy will be outlined on the provider’s website, but generally it involves the following:

  1. Notify the insurance provider of the death;
  2. Provide the Death Certificate;
  3. Verify who was the nominated beneficiary, or if the Executor or Administrator will make the claim;
  4. Submit the claim to the insurance provider;
  5. Provide proof of identity;
  6. Insurance provider will make a claims assessment;
  7. Insurance provider will make a decision;
  8. If a benefit is granted, the insurance provider will release payment.

 

If the insurance claim doesn’t fall within your responsibility as an Executor or Administrator, all you need to do is inform the beneficiaries and advise them on what’s involved in making a claim, then move on to the next step.Funeral Insurance

If the deceased had funeral insurance cover, the benefit should have already been claimed during the process of planning the funeral. Funeral insurance benefits may still be claimed if the funeral has already been arranged, as there is no requirement that the money must be used to pay for a funeral. The beneficiary can make a funeral insurance claim with an application and a copy of the Medical Cause of Death certificate, which the funeral provider can supply. That way, you don’t need to wait for an official Death Certificate to make the claim.

Life Insurance

A life insurance policy is usually taken out to financially protect the immediate family by paying a lumpsum to the nominated dependants. The beneficiaries nominated are generally a spouse and children, but they can also close friends or business partners.

If a death benefit applies to a life insurance policy and a beneficiary was named, they will need to be notified so that they can make an application for the insurance payout (if aged 18 years or over). This payout does not usually form part of the deceased estate.

If no beneficiaries were named, an Executor or Administrator needs to make the application on behalf of the estate. Specific conditions may apply to some policies, such as a waiting period, so you should check these.

In some cases, life insurance may be covered as part of a superannuation policy, so different rules may apply. Check the deceased person’s superannuation policy to see if it applies.

Mortgage Protection Insurance

Mortgage protection insurance covers the cost of regular mortgage repayments if the mortgage holder develops a medical condition, loses their job or dies.

Accident Only Death Insurance

Similar to life insurance, this policy pays out a death benefit if an accident or severe injury was the cause of the death.

Health Insurance

The deceased could have been eligible for claims on medical treatment or extras. A health insurance policy may end at the date of the deceased’s death, however they could have even been in the process of an insurance benefit claim at the time of their death which you may still be able to finalise. It’s worth checking directly with the health insurance provider to determine if you are eligible to make a claim or complete any unresolved claim.

Obtain Mortgage / Rent and Utilities Documents

Did the deceased person rent or own property with a spouse or partner? If yes, their living arrangements will generally roll over to their spouse who should be able to transfer real estate arrangements and utilities into their name. If this is the case, skip ahead to the next step.

You should have covered off insurance providers in the previous step. Now, you will need to search the deceased’s emails and household to obtain all possible key documents or direct debit information. Find out which companies the deceased person made regular payments to and if any bills are outstanding. This will allow you to contact the relevant organisations to notify them of the death and stop regular direct debits, annual subscription renewals, or any other obligations.

The Executor or Administrator will need to gather required documents to administer the deceased estate.
The Executor or Administrator will need to gather required documents to administer the deceased estate.

 

Rates and mortgage / rent

If the home is a rental property, you will need to find out the real estate agent or landlord’s contact details. If the deceased owned their home, look for council rates notices or tax invoices. If the property was an apartment or part of a strata title, look for body corporate tax invoices to understand if levies are due. Rates notices and body corporate tax invoices will help you to understand how much needs to be paid and if there are investment properties to manage as well.

Household utilities

Look any for utility bills, such as water, gas and electricity, you will need to figure out who to notify to advise if the services will need to be stopped or reduced. If investment properties were owned, there will usually be bills for those addresses too.

Obtain Banking Documents: Bank Statements, Credit Card Statements, Cheque Books & Other Notices

Look for any bank statements to understand which banks the deceased banked with. You’ll need to understand if there are any accounts held in their name only, especially term deposits and other investments, or loans and mortgages. Find out if there is any credit card debt owed. Joint accounts will be rolled over to the surviving joint account holder, so it’s just the accounts held solely in the deceased’s name that you will need to manage.

Obtain Documents for Other Service Providers

Look for tax invoices or statements from other service providers to understand the services the deceased paid for and subscribed to. These may include mobile phone and telephone landline, internet, newspapers and online news subscriptions, magazines, Foxtel, Netflix, Stan or other paid TV, music streaming services such as Spotify. It is common for landline, mobile phone, and internet services to be provided by different companies, so look out for more than one provider.

Search for any memberships like roadside assistance, wine clubs, sports club, gym and recreation memberships. Also look for any professional memberships like Chartered Accountants, Engineers Australia, Law Society, etc. If there is a history of charitable donations, check to see if it’s an ongoing direct debit, of just a one-off donation. You will need to stop automatic renewals on any of these memberships and subscriptions.

Vehicle and transport

Keep a lookout for any invoices from the transport department. This will help you to understand if there are any outstanding fines or driver’s license renewals that are no longer needed. Registration payments may need to be up to date if the vehicle is inherited or sold. You will also need to find out if the vehicle had an e-toll account attached to it for travel on toll roads.

Obtain Income Documents: Payslips, Tax Returns; Centrelink Statements; Other Income Documents

Search for any payslip or payment information to understand who the employer was and if they need to be notified. If employment was ongoing, the deceased may have been entitled to unused annual leave, long service leave, and other benefits to be applied. Also, look for any superannuation statements to understand which superannuation funds the deceased had money invested in and how much funds are in place. It is common for people to have more than one superannuation fund if they switched jobs without rolling a fund over to a new provider or nominating a previous fund.

Look for any government or Centrelink payment notifications or statements to understand if any pension or other benefits were being received.

Investment properties

If the deceased had an investment property and was a landlord, note any rental income and tenant or real estate agent details.

Obtain Asset Ownership Documents: Trust Deeds, Share Certificates, Partnership Agreements

Obtaining asset ownership documents like trust deeds, share certificates and partnership agreements may be more difficult to track down if they were not either held in one place or saved together in a digital folder. An accountant, lawyer, tax professional or financial planner may be able to provide important information, so look for any tax invoices for these types of professional services agents and start there.

Share Certificates

If the deceased person owned shareholdings, you will need to find any share certificates to understand what types of shares they held and the value of each.
An email search should reveal investment fund statements, so look for these to understand if the deceased had any funds held by companies other than banks.

Trust Deeds

The deceased may have been a trustee (an owner of a trust), or a beneficiary (someone who receives benefits in the form of an income from a trust).
In each instance, you must notify (whichever is applicable): the owner of the trust, any other trustees, or the beneficiaries of the trust. This will allow the parties to make the necessary arrangements to keep the trust operating. To find the relevant details, look for a trust deed – a legal document that contains information about benefits that can be paid as a lump sum or income stream.

Partnership Agreements
The deceased may have been a partner to a partnership, where a group of people or entities join together to run a business. If this is the case, you’ll need to look for the partnership agreement to notify the other partners of the death. They will need to make necessary arrangements about moving forward as per the partnership agreement.

 

Step 3: Certify Important Documents

Now that you have obtained the important documents, the next step is certifying these key documents. Here’s what you need to do to obtain certified copies of specific documents so that they can be provided to the relevant government departments and companies who require proof of the death. Certified copies of important documents are also needed to initiate the estate administration process, make insurance claims and close accounts.

Identify who can certify for you

You will often need to provide certified copies of official documents or the present the original. You’ll need to obtain multiple certified copies of key documents, as many organisations will not return the submitted documents received.
Once you have made photocopies of each document, you will need to find an authorised person to certify them.

In Australia, the following people are authorised to certify documents:

  • Health professionals: chiropractors, dentists, GPs, nurses, optometrists, pharmacists and physiotherapists, as well as veterinary surgeons;
  • Legal professionals and accountants;
  • Elected government representatives;
  • Public servants who have been employed for five years or more;
  • Bank, building society or finance company officers who have been employed for five years or more; and
  • Ministers of religion, celebrants, notaries, police officers and teachers.

Get copies of the Death Certificate Certified

By now, you should have received the original Death Certificate. This is the key document that will be requested by many government departments, companies and other organisations as proof of the death, so the common approach is to obtain a minimum of 20 certified copies. However, you will likely require more copies if the deceased person’s finances were more complicated, for example if they owned with multiple properties, had shares and bank accounts from a number of different banks and building societies, etc.

Ensure you keep the original so additional copies may be made if needed.

Get copies of Grant of Probate (and Letters of Administration if applicable)

Later in the administration process, you may be dealing with large financial transfers, so you may require a certified copy of the Grant of Probate and, if applicable, a Letter of Administration. The common approach is to obtain a minimum of 20 certified copies. However, you will likely require more copies if the deceased person’s finances were more complicated, for example if they owned with multiple properties, had shares and bank accounts from a number of different banks and building societies, etc.

You will often need to provide certified copies of key documents as part of the estate administration process.
You will often need to provide certified copies of key documents as part of the estate administration process.

 

Step 4: Notify Organisations / Claim Outstanding Benefits, Allowances & Support

Now that you have obtained the Death Certificate and made certified copies, you can claim various benefits or notify relevant organisations to close accounts where no claims will be made. This step will explain the benefits you may be entitled to claim and the documents you’ll need, as an Executor, Administrator or Next of Kin.

Claim Superannuation Death Benefit

Most Australians born after 1938 who have ever worked will have a superannuation fund, or a fund that their employer would have paid into regularly. It can be common to even have more than one superannuation fund, so you will need to contact all of them.

When the superannuation fund holder has died, the total fund balance will be paid out, along with any additional benefits from other products and services the deceased may have had in place with the fund. This payment is referred to as a Death Benefit.

To access the Death Befit, you will first need to find out:

  • all of the superannuation accounts the deceased held;
  • who was nominated as a beneficiary or beneficiaries in each fund; and
  • if there are additional services included in the superannuation fund that may be claimed, for example life insurance.

 

Superannuation and the Will

It’s important to understand that superannuation fund benefits do not form part of the estate or gifted in the Will, as the fund is owned by a trustee (the company where the superannuation fund is held).

When a member dies, trustees will distribute their superannuation according to the terms of the deed. Those who the deceased nominated as the beneficiaries when they set up the fund will receive the superannuation benefit, rather than their estate.

Binding and non-binding beneficiaries

A Death Benefit is generally paid to one or more of the deceased person’s dependents or a legal representative like the executor or administrator of their estate.

What is a dependant?

Dependants are defined as:

  • The deceased’s spouse, or de facto partner (including same-sex partners);
  • Any children the deceased person had (including a stepchild, adopted child and a child born after the death);
  • Someone whom the deceased person provided financial or domestic care to; and
  • Someone who financially depends on the deceased to pay bills, rent or maintenance payments, or who shared financial commitments with the deceased, like a mortgage.

 

The deceased would have nominated a beneficiary when they opened the superannuation account. A binding beneficiary is someone nominated in writing to receive the superannuation fund. They may be a dependant or a legal representative, such as an executor of the deceased estate.

However, it is important to understand the difference between two types of beneficiaries when dealing with a deceased person’s superannuation fund: binding, and non-binding beneficiaries. Superannuation funds usually allow members to nominate non-binding or binding beneficiaries.

Binding Beneficiaries

If the deceased nominated binding beneficiaries, those nominated will need to apply for the Death Benefit. However, if you believe that the binding beneficiaries are not entitled to the Death Benefit, you should seek professional advice as soon as possible, to assist you in lodging a review with the superannuation fund.

Non-Binding Beneficiaries

The superannuation fund (trustee) has full discretion to pay the Death Benefit one of three ways: to the nominated non-binding beneficiaries; to other dependants; or directly to the deceased estate.

If the deceased had only nominated a non-binding beneficiary but no binding beneficiary, the trustee will consider the member’s relationship with the person nominated as the non-binding beneficiary at the time of death. The trustee will decide if the Death Payment will be released to the nominated non-binding beneficiary, or a dependant that determine to be more appropriate.

What happens next?

Once the superannuation funds will review the deceased’s accounts and any insurance covers held in the deceased person’s name. They will advise of what documentation they need as proof of death and to ascertain that you are an authorised person.

How to make a superannuation claim

Contact the relevant superannuation funds to notify them of the death. They will provide an explanation of the processes involved with initiating the Superannuation Benefit payment request, and the documents they require.

Each superannuation fund varies slightly, but the process generally follows the below key steps:

  1. Notify the superannuation fund of the death and provide a certified copy of the Death Certificate;
  2. Request the details of the nominated beneficiaries, fund balances and if any other amounts are payable;
  3. Fill out the necessary forms and apply for the Death Benefit payment;
  4. The superannuation assesses the application of the deceased’s relationship to the beneficiaries are reviewed;
  5. The superannuation fund advises of the outcome of the assessment and to whom the Death Benefit will be paid;
  6. If required, a request can be made to appeal the decision;
  7. If required, the superannuation’s final decision may be appealed with the Superannuation Complaints Tribunal (SCT) within 28 days; and
  8. The superannuation fund pays out the Death Benefit.


It’s important to understand who the nominated beneficiaries are early on, to determine if the superannuation payment forms part of the deceased estate. If the beneficiary is the executor, you will need to work through this process to calculate the total value of the death benefit and add the estimated Death Benefit in the assets and liabilities inventory.

‘Lost’ Super

It might be helpful to check if the deceased had any lost super (or unclaimed super). You can do this by completing theATO Searching for lost and unclaimed super form and mailing it together with certified copies of the death certificate, and either the Will (if available); Grant of Probate; or Letter of Administration.

Tax on superannuation Death Benefits

Taxation of the deceased estate will be explained further in Module 8: Prepare Probate Application. However, it is important to understand that the superannuation Death Benefit paid to dependants is tax-free. But tax will be incurred on any superannuation tax benefits paid to the deceased’s children who were aged 18 years old or above and not financially dependent at the time of the death.

Notify/Claim Insurance Companies: Health and Life Insurance

Insurance benefits may form part of the deceased’s estate for distribution, so if any of the policyholder’s benefit is to be paid out, this will need to be added to the estate’s asset inventory.

If funeral insurance was in place, you should have already begun the process to claim this as part of the funeral arrangement process. If not, you should do this immediately.

You should also have obtained a list of other insurance providers the deceased dealt with as part of Step 2: Gather Required Documents. Now it’s time to now notify these insurance providers to cancel policies where you will not be making any claims. But first, you will need to consider if the deceased person had a surviving spouse or partner to roll over their policy instead.

If the policy is not being transferred to a spouse or dependent, the policies should be cancelled (if no claims are pending). You will generally need to provide each insurance service provider with the Death Certificate as proof of the death. These providers may include home and contents, mortgage insurance, life insurance and income protection, health insurance, and any vehicle insurance providers.

Please note that each insurance provider that the deceased person was insured with will have its own terms and conditions. So you will need to liaise with the insurance provider directly to determine what’s required in closing any accounts or making any claims.

An Executor or Administrator is responsible for lodging a tax return for the deceased person and their estate for the financial year.
An Executor or Administrator is responsible for lodging a tax return for the deceased person and their estate for the financial year.

 

Life Insurance

A life insurance policy can be taken out to financially protect the immediate family by paying a lump sum to the nominated dependants. The beneficiaries nominated are generally a spouse and children, but they can also close friends or business partners.

If a death benefit applies to a life insurance policy and a beneficiary was named, they will need to be notified so that they can make an application for the insurance payout (if aged 18 years or over). This payout does not usually form part of the deceased estate.
If no beneficiaries were named, an Executor or Administrator needs to make the application on behalf of the estate. Specific conditions may apply to some policies, such as a waiting period, so you will need to check these.

In some cases, life insurance may be covered as part of a superannuation policy, so different rules may apply. Check the deceased person’s superannuation policy to see if it applies.

Accident Only Death Insurance

Similar to life insurance, this policy pays out a death benefit if an accident or severe injury was the cause of the death.

Health Insurance

If there is a surviving spouse who is a joint policyholder, the policy generally continues in their sole name.

Mortgage Protection

Mortgage protection insurance covers the cost of regular mortgage repayments if the mortgage holder develops a medical condition, loses their job or dies. You may be eligible to claim for this benefit.

However, the deceased could have been eligible for claims on medical treatment or extras. A health insurance policy may end at the date of the deceased’s death, however they could have even been in the process of an insurance benefit claim at the time of their death which you may still be able to finalise. It’s worth checking directly with the health insurance provider to determine if you are eligible to make a claim or complete any unresolved claim.

How to make an insurance claim

For those insurance policies where you will be making a claim, we’ve summarised what’s required for the main types of insurance benefits below:

The specific process of claiming an insurance policy will be outlined on the provider’s website, but generally it involves the following:

  1. Notify the insurance provider of the death;
  2. Provide the Death Certificate;
  3. Verify who was the nominated beneficiary, or if the Executor or Administrator will make the claim;
  4. Submit the claim to the insurance provider;
  5. Provide proof of identity;
  6. Insurance provider will make a claims assessment;
  7. Insurance provider will make a decision;
  8. If a benefit is granted, the insurance provider will release payment.

 


If the insurance claim doesn’t fall within your responsibility as an Executor or Administrator, all you need to do is inform the beneficiaries and advise them on what’s involved in making a claim, then move on to the next step.

Insurance policies to retain until later

It’s important to retain the insurance policies that will need to continue until the deceased estate is finalised, to protect the assets. These generally include the following:

Home and Contents Insurance

Even if there is no surviving spouse or dependent living in the property, the Executor or Administrator is responsible for the deceased estate, so the common approach is to continue paying for home and contents insurance until the deceased estate is finalised (transferred to a beneficiary or sold). If no such insurance is in place at all, taking out a policy now is a good safeguard.

Vehicle Insurance

Similar to Home and Contents Insurance, even if there is no surviving spouse or dependent using the vehicle, the common approach is to continue paying for vehicle insurance until the deceased estate is finalised (transferred to a beneficiary or sold).

Notify/Claim Centrelink

If the deceased received any government or Centrelink payments, pensions or other benefits, through the Department of Human Services (DHS) or Department of Veteran’s Affairs (DVA), the relevant departments must be notified and benefits cancelled.

The Department of Human Services (DHS)
The Department of Human Services (DHS) comprises Centrelink, Medicare and Child Support Services.

Following a pensioner’s passing, their government benefits will stop once Centrelink has been notified. They will have been eligible for payments until the date of death, so the estate may need to pay back the payments made after the death, so you’ll need to allow for that debit.

When a single allowance recipient dies, their regular payment will be paid to their estate up to their date of death.

The Australian federal government provides a number of payments, financial support, and other services to help when a loved one dies. These are administered through The Department of Human Services (DHS), which comprises Centrelink, Medicare and Child Support Services.

The deceased person’s dependents may be eligible for bereavement benefits and other government assistance if the eligibility criteria is met.

Below are some of the most common types of payments, including bereavement benefits, which may be available for the deceased’s spouse, partner or dependants. The payment amount and type will depend on each individual’s circumstances; their relationship to the person who has died; and when Centrelink has been notified about the person’s death.

Bereavement payments

Below are the main payments Australian residents may be eligible for, following a death:

  • Partner Allowance– If you currently receive a Partner Allowance and your spouse dies, you may be eligible to receive a further 14 weeks of their pension. However, you will need to contact Centrelink and apply for another income support payment. You may also be eligible to receive a Centrelink lump sum bereavement payment (explained below).
  • Pension Bonus Bereavement Payment – A lump sum payment may be available to the surviving partner of a Pension Bonus Scheme member who didn’t successfully claim the Age Pension and Pension Bonus before they died.
  • Carer’s Allowance – If you were providing additional daily care for someone who has died, you may be entitled to a further 14 weeks of pension following their death, in a lump sum.
  • Double Orphan Pension – If you are caring for a child or children whose parents are unable to take care of them, you may be eligible for this regular support payment.
    New claims for Widow Allowance closed on in July 2018, however you may be able to claim a different benefit, such as the JobSeeker Payment or the Age Pension, if you meet the eligibility.


Each of the above payments has strict eligibility criteria and entitlements can change without notice, so you should contact your nearest Centrelink office for further information on 132 300 or visiting the Services Australia website.

Please note that other benefits such as Partner Allowances or Bereavement Payments do not form part of the estate and should not be listed on any assets and liabilities inventory.

Call the DHS on 136 240, or to find a service centre near you, visit the DHS website.

You can call Centrelink on 132 300 or fill out this form and mail it to Centrelink.

Notify/Claim Department of Veteran’s Affairs (DVA)

If the deceased was receiving a pension or other payments from the Department of Veteran’s Affairs (DVA), you will need to notify them of the death. You should also find out if the DVA is able to assist with funeral expenses. Phone: 1800 555 254.

In addition to funeral benefits for veterans, the Department of Veteran’s Affairs may also be able to assist with pensions for war widowed partners and other payments. If you are the spouse, dependant or carer of a deceased person who was receiving a pension from the Department of Veterans’ Affairs you may be eligible for a bereavement payment. Typically, the benefit is a one-off payment of up to $2,000.

Contact the DVA by calling 1800 555 254 or visit the DVA website.

Claim other Benefits or Payouts

The estate may also be entitled to claim other benefits if the deceased was a:

  • member of a club, pensioner association or a trade union; or
  • public safety officer, such as a fire fighter or police officer.

 

Cancel Online Subscriptions

Immediately cancel any subscriptions and services the deceased estate is still paying for, to avoid paying the ongoing subscription fee. The most common online subscriptions are for media streaming services like Netflix, Stan, Spotify, Foxtel, Optus TV, Amazon Prime and Apple TV; and newspaper and magazine subscriptions.

Redirect Mail (if necessary)

Was the deceased person living with a spouse or partner? If not, it’s a good idea to redirect their mail to your address. Free Australia Post mail redirection for up to 12 months is available to those in charge of a deceased estate within Australia.

Applications need to be made in-person, at any Post Office in Australia. You can find your local post office here.

You will need to bring the following documentation with you:

  • A completed mail redirection form, available from your local Post Office or downloaded here; in addition to;
  • Your own proof of identity;
  • A copy of the grant of probate or letter of administration.

 

If you need to continue your mail redirection for longer than the free 12-month service period, applicable rates will apply.

Notify the Australian Electoral Office

To ensure voting records are up to date, the Australian Electoral Office will need to be notified of the death. You can request the deceased’s name be removed from the electoral roll online by filling out a notification of death form here.

Notify the Australian Tax Office

If the deceased person has ever submitted a tax return and has a Tax File Number, the Australian Taxation Office (ATO) will need to be notified of their death. You can fill out the online ATO Notification of a Deceased Person form here. Alternatively, you may also download a paper form here. Fill it out and mail it, along with certified copies of relevant documents, to the address on the form. You’ll then need to make an interview appointment at any Australia Post retail branch within 30 days and bring with you an original or certified copy of the Will, letters of administration or grant of probate.

You are responsible for lodging a tax return for the deceased person and estate for the financial year ending on 30 June as per the usual individual tax return lodgement deadlines (by no later than 31 October of that year). This is explained further in Step 9: Probate Process.

If you are worried you will not be able to complete and submit the tax return before the deadline, call the ATO at 13 28 61 for a deferral.

Step 5: Close Social Media Accounts

This step will explain how to make decisions about closing the deceased person’s social media accounts, or if they should be kept active. This decision should involve the immediate family.

Please note: Closing off email and mobile phone accounts will be explained in Step 10: Finalise & Distribute Estate, as these should be retained for now to assist with the estate administration process.

Finalise Social Profiles: Facebook; Instagram; Twitter; etc

When dealing with the deceased’s social media accounts there are a few things you will need do:

  1. Identify the platforms where the profiles existed;
  2. Check if there is any posts or information you would like removed;
  3. Consider if a ‘memorial’ or tribute profile should be retained in memory of the deceased person (where possible);
  4. Determine which accounts should be closed.

 

The most common social media providers are Facebook, Instagram, Twitter and LinkedIn. If you search for the deceased’s name in each of the platforms or in Google you should be able to identify if the deceased person held any of these accounts. Then make a list of all social media accounts and the name or username alias.

If you want to delete the deceased’s social media account, take a moment to first look through the posts and save any photos you want to keep. Deleting a social media account is very final, so err on the side of caution.

Some social media platforms allow you to make a request to memorialise the deceased person’s profile, with the word “Remembering” before their name. Any photos and posts the person shared in the past will remain visible on their memorial account. When you’re ready to close or memorialise the deceased’s account (where possible), contact the social media platform to find out what’s required to begin the process. The details should be on their website to make things easier.

You will generally need to provide a scanned image of the Death Certificate; and either the Will naming you as an executor; or Letters of Administration naming you as the Administrator.

The most common social media accounts have been summarised below:

How to close or memorialise a Facebook profile

You can send a request for Facebook to memorialise or delete a loved one’s profile here. You will be also required to supply a copy of the death certificate.

Facebook and Instagram can memorialise the deceased person's profile, with the word 'Remembering' before their name.
Facebook and Instagram can memorialise the deceased person’s profile, with the word ‘Remembering’ before their name.

 

How to delete a deceased’s person’s Twitter account
There is currently no option to memorialise a person’s Twitter account or to provide access to a third party after someone dies. When someone dies, the only option is to have their Twitter account deleted. Twitter’s inactive account policy means the platform will automatically remove accounts due to prolonged inactivity, after about six months. So, if Twitter has noticed no activity on a deceased person’s account after a while, the account will be deactivated without anyone needing to do anything.

To request immediate deactivation of a Twitter account after a death, contact Twitter here. You will need to provide your own ID (such as a drivers licence) and a copy of the death certificate.

Deleting the deceased’s LinkedIn profile
LinkedIn does not have any kind of a memorial profile after someone dies, but allows a trusted contact to make a request to delete a deceased user’s profile entirely. To make a request to remove a deceased person’s account, you’ll need to fill out a LinkedIn profile removal request form online here with the following details:

  • The LinkedIn member’s name;
  • The URL to their LinkedIn profile;
  • Your relationship to them;
  • Member’s email address;
  • Date of their passing;
  • Link to an online obituary.

 

Deleting or memorialising a deceased person’s Instagram account
After someone has passed away, Instagram can either memorialise, or delete the account if a family member or friend submits a request. A memorial account on Instagram resembles an account of a living user. However, once an Instagram has been memorialised, all comments and photos remain frozen in time. No new content can be added to an Instagram memorial account. Unlike a Facebook memorial account, nobody can log into the deceased person’s Instagram account and no further likes tags or comments can be made.

To make a request to memorialise an Instagram account, you’ll just need to provide proof of the death and of your relationship with the person who has died. Instagram suggests a birth certificate, the death certificate, and/or a copy of the will naming you the executor.

You can submit a request to memorialise or delete a deceased person’s Instagram account here.

Step 6: Pay Outstanding Bills

This step will explain in more detail what’s involved with closing accounts, transferring joint accounts and requesting for the release of funds.

Determine Whether Bills Need to be Paid (solvent or insolvent)

It’s your job to understand the total value of the estate. To do that, you’ll first need to ensure all expenses and liabilities (also referred to as debts) are paid. What’s remaining of the estate will determine if it is solvent, or insolvent.

Step 7: Prepare Probate Pre-Requisites will explain what’s required to set up an Inventory of Asset & Liabilities to determine the exact value of the deceased estate. However, this stage of the estate administration process will explain how to determine if the estate’s value is positive or negative.

Firstly you will need to access bank statements and all other financial information, which you may already be able to assess. The Next of Kin and Beneficiaries should be able to help give you an idea about the deceased person’s estimated assets (funds, property, vehicles, and other significant belongings), as well as any liabilities (mortgage, personal loans, credit card debt, etc). This information will help you to estimate if the estate’s value is solvent or insolvent.

You’ll need to consider some things that may not form part of the deceased estate, or debts held jointly with another person that may need to be partially repaid by the estate. You may need to seek legal advice if that applies to your situation.

Proceeds from a life insurance policy or superannuation benefits are other considerations as they may not form part of the estate. Depending on your state or territory legislation, these funds may not be used to pay estate debts, aside from funeral or estate administration-related costs. In your Inventory of Asset & Liabilities list, you should list these types of assets separately.

Where the deceased had a mortgage, lease agreement or personal loan, you will need to discuss repayments with the bank or lender immediately. Failing to do so could incur additional fees or even repossession of the property or a vehicle if repayments aren’t met.

Paying bills and debts on estates

If you have access to funds and there is cash available to pay any bills and debts, they should be paid right away (to avoid late payment, additional interest or other charges during the estate administration), or to wait until you work through the estate administration process. If you don’t have access to ash, or is there is no cash available, seek professional advice.

Depending on the bill, you may be able to dispute the charge if you believe it should no longer apply, given the customer is now deceased. It is also worthwhile negotiating with each creditor a special arrangement to either delay paying the debt.

However, if someone still lives in the property, you should pay the bill now, if it is for services like electricity and water, to avoid any risk of the service being cut off. Any unused services should be cancelled immediately, if you have not already done so.

Insolvent estates: Paying bills and debts

If you believe the estate to be insolvent, you will require assistance. Depending on their terms of service, you may be able to request a grace period to delay payment. You must not feel pressured to pay anything until you have obtained legal advice about which bills and debts to pay and the order.

The Executor or Administrator may become liable if the paying of debts is not handled appropriately, and in some instances, if one type of debt is paid over another.

If you are confident the deceased estate is insolvent, it may either be administered applying the Federal Bankruptcy act 1966 (Cth) or following the relevant state or territory’s legislation which determines the sequence in which debts are to be paid. You must not feel pressured to pay anything until you have obtained legal advice about which bills and debts to pay and the order. Working through your Assets & Liabilities in the next step will give you a better idea of the values of all components of the deceased estate to officially determine if it is insolvent.

Administrator needs to determine the total value of the deceased estate by ensuring all debts and liabilities are paid.
The Executor or Administrator needs to determine the total value of the deceased estate by ensuring all debts and liabilities are paid.

Pay Mortgages and Personal Loans

You should pay all secured debts like mortgages and personal loan balances by the due date, to avoid additional charges for the estate. Before you make any further payments it’s wise to contact the bank or lender to negotiate a special arrangement like lower repayments, deferral of payments, reduced interest or interest-free repayments while you work through the deceased estate administration.

If the deceased’s bank account is frozen, payments may still be made into a bank account, so mortgages and loan repayments may still be made provided they are paid into the correct account to avoid penalties and late fees.

Review and Pay Utililites Bills

You will need to notify utility providers that the deceased dealt with, including electricity, gas and water suppliers. These services will need to be cancelled if they are no longer required by a surviving dependant.

First, you need to determine if the deceased person lived with a spouse or partner who still needs access to utilities. If yes, the bills will still need to be paid, however utility services will generally transfer over to the surviving spouse or dependant. You may wish to request a grace period for paying any outstanding debts, to give you some time to review the estate administration process. Paying debts.

If the deceased had any investment properties, the utilities at those properties will also need to be paid and transferred to a new name also. You will generally need to provide a copy of the Death Certificate as proof of the death.

Paying utility bills

How you pay these bills will depend on whether the deceased person had bank accounts in a joint name with another person, or if they held all accounts in their name only.

If there is a joint bank account holder, they will retain full access to the accounts. If there is no other funding source, the joint account holder may make necessary payments to cover bills and ongoing debits during the estate administration process, as agreed with you (the Executor or Administrator). They will need to keep a record of any estate administration related-expenses.

If the deceased held all accounts in their name only, and you cannot yet access the required funds to cover debts that need to be paid immediately, it is common for the Executor, Administrator or Next of Kin to make these payments from their own money. Always keep a record of any estate administration-related expenses. You will need to claim these back once the full value of the estate is known and funds are available. We will explain this process further in Step 9: Probate Process.

Pay Funeral Expenses

The deceased person’s bank or financial institution can generally release funds from the estate to pay for funeral costs if the account is frozen. This can be paid either directly from the bank to the funeral provider; to the Executor or Administrator; or the person who organised or paid for the funeral with their own money. The bank will usually require an invoice or receipt for the funeral service, a death certificate and a copy of the Will.

If you are weighing up which expenses to pay as priority, all expenses related to the funeral (along with estate administration expenses) have priority. These debts will need to be paid as per agreed due date, before any estate distribution to beneficiaries.

Pay and Cancel Credit Cards

Pay the remaining credit card balance of any cards in the deceased person’s name. To avoid interest rate charges, credit card balances should be paid by the due date. If you determine the estate to be insolvent (where the estate has less money than it owes), seek legal advice before making further payments.

To ensure any credit cards are no longer being used, cancel and destroy all main and secondary credit cards linked to the account. If a secondary card holder still requires a credit card, they will need to stop using the credit card and destroy it, and apply for their own credit card.

Credit card statements will identify if any direct payments were set up from those cancelled credit cards. These direct debits will need to be changed to avoid negative impacts on the estate.

Pay Other Bills (as applicable)

To avoid late fees, pay any outstanding bills by the due date, or consider negotiating extensions with the creditors.

If you determine the estate to be insolvent (where the estate has less money than it owes), seek legal advice before making further payments.

If there is a joint bank account holder, they will retain full access to the accounts. If there is no other funding source, the joint account holder may make necessary payments to cover bills and ongoing debits during the estate administration process, as agreed with you (the Executor or Administrator). They will need to keep a record of any estate administration related-expenses.

If the deceased held all accounts in their name only, and you cannot yet access the required funds to cover debts that need to be paid immediately, it is common for the Executor, Administrator or Next of Kin to make these payments from their own money. Before this happens, you need should have a high degree of confidence that the deceased estate is solvent (where the total value of all assets is higher than the total value of all debts or liabilities).

As mentioned earlier, always keep a record of any estate administration-related expenses. You will need to claim these back once the full value of the estate is known and funds are available. This process will be explained further in Step 9: Probate Process.

Step 7: Prepare Probate Pre-Requisites

This step explains what’s required to determine all eligible beneficiaries based on the Will (if one exists) or the intestacy rules for the relevant state or territory if there is no Will. Also explained is how to identify any issues or possible areas of dispute between beneficiaries; and determine the value of the deceased estate for distribution as inheritance to the beneficiaries.

Determine the Beneficiaries

To understand who the deceased estate will likely be distributed to, you first need to determine and identify all eligible beneficiaries. Once you have identified each beneficiary it will be easier to work through the remainder of the process.

Determine beneficiaries if there is a Will (Testate)

If there is a valid Will that clearly identifies all beneficiaries, there are a few steps you will need to follow:

  1. Find out the nominated beneficiaries’ relationship to the deceased;
  2. Find out their contact details;
  3. Contact them to notify them of the death if someone has not already done and that, and to also advise them that you are the Executor of the Will;
  4. Hold a meeting with all beneficiaries to discuss the Will, let each beneficiary know of the other beneficiaries, and advise them of the process and a realistic time frame.


During this process is a good opportunity to find out if other relatives may have been left out of the Will, who may have a right to claim from the estate.

Determine beneficiaries if there are multiple Wills

If you find multiple Wills, or multiple versions of Wills, you must determine which is a valid Will with the latest date. If multiple Wills were made nominating different executors and/or beneficiaries, this could lead to a dispute and someone who was left off a later Will may make a claim. If this happens, the common approach is to consult with a specialist estate lawyer before notifying the beneficiaries, as disputes may arise.

Determine inheritance without a Will (Intestate)

Dying without a valid Will is known as dying ‘intestate’, which means the law determines how the estate is to be administered. These rules of intestacy follow a hierarchy of who should benefit from the estate and how much inheritance they may be entitled to.

The formula of intestacy varies slightly between each Australian state and territory, so you can check which applies by contacting the Probate Office in the relevant state. However, the general formula for distributing the estate of a person who has died without a Will is the person’s partner or spouse and dependents, then if there are none the estate usually goes to surviving immediate family.

If the deceased person died without a Will, the general approach is to seek legal advice. If you require assistance at any stage, give us a call on 1800 202 901, and we will connect you with Bare’s specialist estate administration partners.

Find all beneficiaries

As mentioned earlier, you will need to identify all eligible beneficiaries early on to find out how to get in touch with them throughout the process.

In some instances, you may need to look further than the immediate family or beyond the Will if the deceased had multiple spouses who were named in a previous Will and later removed. The deceased may have had children with other partners and there may also be a maintenance agreement in place. It may also be possible that the deceased had children who are unknown to the family.

Meet all beneficiaries

Once you have identified who the beneficiaries are and considered any legislation that applies to your situation, you should contact the beneficiaries to arrange a meeting. If all beneficiaries are generally amicable, its advisable to meet everyone all at once if possible, so that everyone hears the same details. However if some relationships are strained, you may decide to hold separate meetings.

During the meeting, you should also discuss how the home clearance will be organised (see Step 7).

Find out if a family member has any immediate needs

During the communication and meeting with beneficiaries, you may learn of family members who were financially dependent on the deceased, or identify other difficulties resulting from the death. If you do, refer back to Step 4 to review if support is available to them.

Contesting a Will

Contesting a Will is when valued members of the deceased’s family, who are deemed eligible to be a beneficiary, feel they were unfairly left out of a Will or not adequately provided for. To dispute the Will, they may lodge a family provision claim to the court.

There is a time limit to challenge a Will in Australia and each state and territory is different, however a Will can generally be challenged up to six months of the date the Grant of Probate or Letters of Administration or the date of death.

The possibility of having a Will challenged is something you should keep in mind before you finalise and distribute the estate in Step 10: Finalise & Distribute Estate.

Confirm Court Jurisdiction

Where a Grant of Probate or Letters of Administration are required, an application needs to be made to the relevant Supreme Court. The court needs to be in the state or territory in which the assets of the estate are registered and/or located. For example, a grant of probate made by the NSW Supreme Court does not carry the authority to deal with assets within Victoria.

If the deceased person held assets registered and/or located in more than one state or territory, you have two options. You can either apply to multiple Supreme Courts, or have the original Grant of Probate or Letters of Administration ‘resealed’ in the relevant state or territory’s Supreme Court.

A Reseal of Probate is the term used when a Will has already obtained a Grant of Probate in one state, but it also needs to be recognised in another state. Once a Reseal of Probate has been granted, the Executor will be allowed to deal with the assets located in a different state to where the original Grant of Probate was given. For example, if a Grant of Probate was obtained in Victoria then resealed in NSW, it becomes as effective as if it were originally obtained in NSW.

Compile Inventory of Asset & Liabilities

The deceased estate will be made up of various Assets and Liabilities (or expenses). You will need to begin compiling an inventory of all of these to assist with the following:

  • Gaining a good understanding of what the estate is made up of, and its size and value;
  • Providing the beneficiaries with an overview of the estate;
  • Preparing the Grant of Probate or Letters of Administration application;
  • Lodging a final tax return; and
  • Understanding the value to be distributed to beneficiaries.

 

Review the assets and liabilities
You should by now have obtained a solid understanding of the various components that make up the deceased estate. Refer to the below list to check if you’ve considered these most common estate components, but note that there may be other items to include that are not listed below:

  • Bank accounts, including saving accounts and term deposits;
  • Trusts;
  • Investment accounts;
  • Shares and share portfolios;
  • Businesses;
  • Vehicles;
  • Real estate;
  • Furniture;
  • Collectibles;
  • Artworks;
  • Jewellery and any other valuables;
  • Mortgages, personal loans and other debts.


Now that you have listed all the items that apply to the estate, you should now review the value of each. You will need to compile a valuation statement, so you will need to obtain proof of value of each item at the date of the deceased person’s death, or some other valuation documentation.

An Executor or Administrator must compile an inventory of all assets and debts to determine how much the estate is worth.
An Executor or Administrator must compile an inventory of all assets and debts to determine how much the estate is worth.

 

Obtain bank statements

Obtaining a full understanding of all bank balances, both positive and negative, is a critical part of the estate administration process. Once the bank has reviewed the relevant documentation, they will provide an overview of the deceased’s accounts and balances to the authorised Executor, Administrator or Next of Kin. You will need to apply all this information to an Inventory of Assets & Liabilities to gain a better understanding of the deceased estate’s total value.

Look out for any transactions of large amounts coming in or out of the deceased person’s bank accounts, as this will identify if someone owed debts to the estate, or if the estate owed someone debts.

Request Someone to Review Inventory of Assets & Liabilities

When you are confident that you have collated all the assets and liabilities of the estate to the best of your knowledge, it’s a good idea to request someone who knew the deceased person well, like the Next of Kin or another family member, to review the list. They will be able to check the items to verify if your valuation seems reasonable.

The reviewer may also identify items that may be owned jointly with another party, or if items that had been promised to someone else and perhaps should not be included in the inventory. If this is the case, you will need to investigate this further.

Remember that the estate should only include assets held solely in the deceased person’s name, or a share held as tenants in common. Any Superannuation Death Benefit or life insurance benefit payments may not be included in the estate.

Clear the home and Keep Register of Assets and Approximate Value

If the deceased person had no partner, spouse, or dependant living with them when they died, their last residence may be cleared after taking an inventory of the contents and personal belongings.

If the property was rented, you’ll need to hand back the residence to the real estate agent. If the property was owned, you will need to prepare the property to be valued (see next step). If the property was owned and will be rented out, you will first need to prepare the property to be valued.

General considerations with clearing the residence

It’s vital to consider the mourning family’s emotional connection to the deceased’s final residence before launching into the clearing of its contents. The family may want to spend some time in the home before the clearing begins.

It is common for personal belongings and other items in the deceased’s final residence to hold great sentimental value to beneficiaries, who may want to take possession of particular items. However, it’s the Executor or Administrator’s responsibility to inform anyone who wants to take any item that, unless specifically willed to a beneficiary, all the deceased person’s belongings must not be distributed until everything has been officially recorded and a total value of the estate is known. The deceased person’s personal items form part of the estate, so removing an item may be considered a crime if it ends up being disputed by other beneficiaries.

If not already in place, it may be beneficial to take out home and contents insurance on the residence to protect you and all beneficiaries during the administration process, as this can drag on for upwards of six months.

If nobody is living at the property, you should switch off any electrical equipment that are not required, and remove any perishable food from fridges, freezers and other storage areas.

Specific item bequests

The only exception to the above is if the Will identifies specific items that are intended for a nominated beneficiary. In this case, it may be easiest if those nominated beneficiaries are invited to collect only the specific items as per the Will, as soon as possible. If the ‘specific item’ can easily be identified, the beneficiary doesn’t need to wait for the division of the deceased estate.

If collected earlier, it’s helpful to take a photo of the item and make a record of it by noting the beneficiary’s name, date and signature, in case a claim for that item is made later on.

Value / Sell the Home (if applicable)

It’s now time to determine how the deceased person’s real estate will be dealt with, and this will depend on the ownership and the Will.

Property ownership as a sole owner

If the deceased person was the sole owner of the property, it will usually form part of the estate for distribution according to the Will.

Property ownership as a joint tenant

If the deceased owned the property with another person, you need to determine if it was owned as a ‘joint tenant’ or a ‘tenant in common’.

Joint tenancy is when two or more people own an equal share of a property. When one of the owners dies, their share in the property transfers to the surviving joint tenant (or tenants) without having to go through the courts. If the deceased was a joint tenant, their share is not regarded as an asset of the deceased estate.

To find out how to transfer a real estate asset to the surviving joint tenant, refer to Step 9: Probate Process.

Property ownership as tenants in common

If the deceased held a property as a tenant in common, their share becomes an asset of their estate for distribution according to the Will or state legislation.

Property ownership of a mortgaged property

If the deceased person’s property is still mortgaged at the time of death, then the mortgage will also transfer to the beneficiaries, along with the property. The bank or lender will generally expect the balance of the mortgage to be paid. This means that if the property is sold but the outstanding mortgage cannot be covered, then the other assets of the estate must be sold to repay the debt in full.

To mitigate this, the deceased may have taken out mortgage protection insurance to cover the mortgage payments after death. If this was in place, you should have begun the process of making a claim as part of Step 4.

Real estate distribution and the Will

Check the Will to see if it includes specific instructions on the distribution of any real estate. These requests must be upheld as closely as the law permits.

Value the real estate

As part of the Assets & Liabilities Inventory, you need to determine the property value for the purposes of tax, Grant of Probate application and final distribution of assets. It is important to note that the value of all assets and liabilities are as at the date of death, not at the current date of the appraisal.

If a property is to be distributed to a beneficiary, its value may also be important for the other beneficiaries to understand to determine an equitable and fair distribution of assets.

To gain an accurate value, you may arrange for a paid appraisal by an independent specialist valuer, or obtain free valuations by three different real estate agents and take the average value. Paying for a professional valuation may be the better, more accurate, option if you anticipate that the property value could become a contentious topic among beneficiaries.

If the beneficiaries decide that the property will be sold, it may be easier to wait until the final sales price, as this will determine the exact amount that will contribute towards the estate value.

Selling the real estate

If the property is to be sold during the administration process, which is common, the final transfer of title and land can only happen after a Grant of Probate or Letters of Administration are obtained from the Supreme Court (see Step 9: Probate Process).

You, as the Executor or Administrator, may list the property on the market and enter into a contract for sale provided that the Executors or Administrators are listed as the vendors; and special conditions are included in the contract to clarify the following:

  1. That the seller of the property is the Executor or Administrator of the estate;
  2. That the Grant of Probate or Letters of Administration must be granted by a specified date for the sale to become conditional (it can take weeks or even months for Grant of Probate applications to be processed); and
  3. That the Grant of Probate or Letters of Administration must first be granted before settlement of the property can happen.

 

The buyer has the right to exit from the contract if the Grant of Probate or Letters of Administration has not been obtained within the specified timeframes.

Step 9: Probate Process, explains how to transfer the deceased’s real estate for sale.

Renting the real estate

Executors or Administrators can only enter into rental agreements after a Grant of Probate or Letters of Administration have been granted, so letting out the deceased estate to generate income during the administration process may not be possible.

However, if the property is already rented out, the lease agreement will continue between the tenant and the Executors or Administrators. If the current lease agreements must be terminated, you will need to provide notice in tenants with the appropriate notice period as per their lease agreement. If the lease agreement ends during the estate administration process, you or the letting agent will need to contact the relevant real estate authority in your state to requests their bond to be released.

Value Vehicles and Arrange for Sale or Registration Transfer

Cancel a licence
You will need to notify your roads department, such as VicRoads or the New South Wales Roads and Maritime Services, that the person is deceased and advise that you are the authorised representative of the estate. You can generally do this either by mail or in person. You’ll need to provide a certified copy of the death certificate and grant of probate. In person, the original or certified copy usually only needs to be sighted. You will also need to provide your own identification.

Any drivers licence, learner permit or marine licence the deceased had will need to be cancelled through the relevant state’s roads department. Each state and territory does this a little differently so you will need to check in with the transport authority in your relevant state.

Most of the time licence cancellation can be done by completing a cancellation and refund request and sending it in with a certified copy of the death certificate. However, some states will require you to visit a service centre in person to process this while you’re also arranging registration transfer or cancellation and the return of number plates on vehicles that won’t be used. You will need to visit a transport service centre in person to return registration plates of vehicles registered solely under the deceased.

More information is available from the transport authority in the relevant state or territory below:

 

In some states, you may be eligible for a refund to claim the remaining part of the licence fees paid. If a refund is approved, it will be paid into the deceased estate.

You have a few options about what to do next depending on what needs to happen with the vehicle’s ownership: transfer a vehicle or vessel registration; cancel a vehicle or vessel registration; register an unregistered vehicle or vessel; or transfer/retain custom number plates. If the vehicle is being transferred into a spouse’s name, all you need to do is complete a simple transfer form. If it’s being bequested, you’ll need to fill out a vehicle sale form.

Close a road toll account

If the deceased had an e-toll account for accessing toll roads, or if you need to transfer the account to a spouse or surviving partner, you can do this at a transport service centre in your state. Please note that you can usually only transfer the account to a spouse or partner, but not another family member. Outstanding fees must be paid when closing the account. You’ll also need to return any tags undamaged to receive any security deposit refund or avoid a non-return tag fee.

Refunds will be generally be paid by cheque to the estate within six to eight weeks of the account’s closure. Aside from your own personal ID, the deceased’s account details and the tag, you’ll also need to provide a copy of the death certificate.

An Executor or Administrator manages a deceased person's estate administration.
An Executor or Administrator manages a deceased person’s estate administration.

 

Build Register of Final Bank Account Balances

Based on previous steps, your Assets & Liabilities inventory should now capture the value of each asset, including the total of all the bank and financial accounts. You should have stopped any direct debits and automatic transfers. If you haven’t already, you will also need to tally up all the debts and bills to determine the total value of all liabilities.

Determine the type of bank account ownership

As explained in the previous step regarding real estate ownership, you will need to determine who the owner of each bank account is. If the deceased had a surviving spouse or partner, most of their assets and liabilities are likely to be held jointly with them. If that’s the case, then the specific asset or liability will pass to that other owner.

If the deceased held the account solely in their name, then it generally forms part of the estate. The name or names on the bank statement or signatures on the agreement should help you to do determine if the account was held by a sole owner or jointly.

Sole owner of a bank account

If the deceased was the sole owner of a bank account or product, the Executor, Administrator or Next of Kin must determine the total value of all combined assets and liabilities. All assets and liabilities that were held solely by the deceased person need to be transferred to the estate for distribution to the beneficiaries.

It’s important to evaluate each bank account or service independently, as the deceased person may hold some of these in their sole name and others jointly with another person.

Joint owner of a bank account

Once the Death Certificate confirms the death, the associated assets and liabilities of any bank account or product held in joint ownership with someone else will, in most cases, automatically transfer over into the surviving joint owner’s name.

There may be exceptions to this automatic transfer including on credit cards, personal loans or home and investment loans, or if the Will outlines specific distribution wishes.

If you have already notified the bank of the death, the banks or financial institutions should have by now advised you of their specific process and the documents they need to initiate the estate administration process. This usually depends on the size of the estate, however you may need to provide a Grant of Probate or Letters of Administration issued by the Supreme Court in the relevant state or territory. This is further explained in Step 8: Prepare Probate Application.

If you have not already done so, you will need to transfer jointly-held banking products and services, plus any related assets and liabilities, to the surviving owner’s name. You will need to prove the death by presenting a copy of the Death Certificate to the bank or financial institution, so they may complete the transfer to the surviving joint owner.

Common banking/financial products and services

Banks and financial institutions don’t just offer everyday bank accounts; they also provide a range of products. The below list could help you check you’ve got everything covered:

  • Transaction accounts with bank cards;
  • Savings accounts and term deposits;
  • Debit cards and credit cards;
  • Prepaid debit cards;
  • Mortgage accounts and personal loans;
  • Overdraft facilities;
  • Investment accounts;
  • Life insurance;
  • Superannuation products.

 

Identify and Record Other Assets

Any items that make up the deceased estate, which are not specifically mentioned in the Will, are to be distributed when the total value of the estate is known.

Value contents of the residence

After the beneficiaries have taken the items as listed in the Will, all remaining contents of the deceased person’s last residence should be valued by a professional valuer. You should consult the family and beneficiaries to determine which of the remaining contents are to be retained and distributed to beneficiaries, or sold so that funds from the sale may be added to the estate.

Step 8: Prepare Probate Application

This step explains what you need to do to determine if you will need an application to the Supreme Court to obtain a Grant of Probate or Letters of Administration. Also explained is the type of application that may best suit your circumstances as part of the estate administration process.

Determine if Probate Application is Required

By now, you should have compiled a detailed inventory of all the deceased person’s money, real estate, personal items and other valuables, along with any debts, to determine the estate’s total value. You should have already made contact with the relevant government departments, businesses and other organisatons. Each of these departments and organisations should have advised you if a Grant of Probate or Letters of Administration is required. Depending on the value of the account or claim, these documents may need to be provided before any funds or titles may be transferred or released. The value limit will vary between each organisations.

If no Grant of Probate or Letters of Administration are needed for the estate administration and distribution, funds in the deceased person’s name may be transferred to the Next of Kin’s personal account upon request. You must keep a record of any estate funds and transactions.

When you might need a Grant of Probate or Letters of Administration
You will likely need a Grant of Probate or Letters of Administration in the following scenarios:

  • If the value of a single account/transfer/benefit/claim from one organisation exceeds a set value, which is usually $50,000;
  • If the deceased person owned property or other assets in their sole name, or as tenants in common; or
  • If it’s an organisation’s policy that a Grant of Probate or Letters of Administration are needed to release funds.


However, in instances where no Grant of Probate or Letters of Administration is required, the Executor or Next of Kin would generally be required to do the following to initiate the transfer:

  • provide the deceased person’s details, Death Certificate, and Will (if available);
  • advise the organisation of your relationship to the deceased; and
  • provide your proof of ID; and provide any other document as requested.

 

Sometimes an organisation will also ask that the Executor or Next of Kin provide further information and sign an indemnity and release form to protect the organisation from other people making the same or similar claims on behalf of the same estate.

If you’re only slightly over the value limit for a particular organisation, you may be able to request an exemption. This would be handy if you only require a Grant of Probate or Letters of Administration for the one organisation, as it would save on the time, cost and effort to process the application through the Supreme Court. Where applicable, you should discuss this with the organisation. If you are applying for a special consideration, it is best to do this with a formal letter mailed by registered post.

Advertise Notice of Intention to Apply for Probate (if applicable)

If you have established that a Grant of Probate or Letters of Administration are required, the first step is to advertise or publish a notice of your intention to apply with the Supreme Court.

Publishing a notice of your intention allows:

  • nominated Executors to come forward and discuss the intended application;
  • anyone who the estate owed money to (creditors), or family members and other parties to come forward and make any claim; or
  • anyone who may have another version of the Will to come forward.


Below are the contact details and outlined the process for the Supreme Court in Victoria, New South Wales, Queensland and Western Australia below:

Supreme Court of Victoria
Phone: 03 9603 9300
Email: probate@supcourt.vic.gov.au

The Notice of Intended Application must be published for at least 14 days before an application to the Supreme Court of Victoria for Grant of Probate or Letters of Administration can be made. You can submit your Request for Notice of Making a Grant online here.

Before lodging an application, you should check that no previous applications were made by another Executor, Administrator or Next of Kin here.

Supreme Court of New South Wales
Phone: 1300 679 272
Email: sc.probate@justice.nsw.gov.au

The Notice of Intended Application must be published for at least 14 days before an application to the Supreme Court of NSW for Grant of Probate or Letters of Administration can be made.

You can submit your Request Notice of Intended Application through the online portal. You’ll first need to register here.

Before lodging an application, you should check that no previous applications were made by another Executor, Administrator or Next of Kin here.

Supreme Court of Queensland
Phone: 07 3236 1855
Email: enquiries@queenslandreports.com.au
Post: PO Box 15167, City East Qld 4002

The Notice of Intended Application must be published for at least 14 days before an application to the Supreme Court of NSW for Grant of Probate or Letters of Administration can be made.

You can submit your Request Notice of Intended Application to your local Public Trustee office, as listed here.

Before lodging an application, you should check that no previous applications were made by another Executor, Administrator or Next of Kin, here.

Supreme Court of Western Australia
Phone: 08 9421 5333

In Western Australia, you can provide notice of an intended application for Grant of Probate or Letters of Administration through the West Australian Classifieds before applying with the Supreme Court. The application for Grant of Probate or Letters of Administration can only be made 14 days after the date of death.

To apply to the Supreme Court or Western Australia, if you are not the only Executor nominated in the Will, you must either: provide notice to the other nominated Executors and submit this evidence to the court with your Notice Form here; or ask the other nominated Executor to complete the Consent Form here, which you will provide with your application for the Grant of Probate or Letters of Administration.

A property can only be sold during the estate administration process after obtaining a Grant of Probate or Letters of Administration.
A property can only be sold during the estate administration process after obtaining a Grant of Probate or Letters of Administration.

Apply for Grant of Probate

If you require a Grant of Probate or Letters of Administration as part of the estate administration process, the Executor, Administrator or Next of Kin will need to apply for it through the relevant state or territory’s Supreme Court. Where larger amounts (usually $50,000 or more) are needed to be transferred or claimed on behalf of the deceased estate, this document will authorise approval for the Executor or Administrator to properly administer the estate. The organisation like a bank, superannuation or insurance company will need this court document to proceed.

Request Tax Advice

While you’re waiting for the Grant of Probate or Letters of Administration, it’s a good opportunity to understand the tax implications that apply to the deceased estate. There is no inheritance tax in Australia, however some taxes may apply to the estate.

You may need taxation advice to help you understand all the tax implications and the types of taxes that may apply to the deceased and to the estate, including Capital Gains Tax and taxation implication in other countries. It will also make things easier if you can advise the beneficiaries of possible tax implications when known. You and the beneficiaries will also need to agree on how to best distribute the estate once it is ready.

Transfer of deceased estate assets

As part of the deceased estate administration, funds and assets may be transferred in the following three ways:

  1. from estate to beneficiary;
  2. from estate to Executor/Administrator/Next of Kin in trust; or
  3. from Executor/Administrator/Next of Kin to beneficiary.

 

Varying tax rules may apply in each of these instances, and who pays these taxes may also differ. Below are the various types of taxes, as outlined by the Australian Taxation Office (ATO), that may apply to beneficiaries or a deceased estate:

Income Tax

Income tax is the most common form of tax, payable by anyone in Australia who is required to pay tax on earnings of any kind. This is commonly through a salary, business or partnership income, rental income, interest, and investment returns or dividends.

If the estate is generating income in the deceased’s sole name during the estate administration process, for example through bank account interest, rent from investment properties and other investment dividends, then income tax applies. As explained further in Step 9: Probate Process, you will likely need to prepare a tax return for the deceased person (known as a date of death tax return), as well as for the deceased estate.

Company Tax

If the deceased person owned and ran their own business that is sold or gifted to a beneficiary, the new business owner will need to ensure that company tax continues to be paid.

Capital Gains Tax

Capital Gains Tax is the tax paid on any profit from the sale of certain assets, such as real estate or shares. Generally, capital gains tax doesn’t apply when you inherit an asset. However, it may apply when the asset is sold, as it is applied to the difference between the asset’s value when acquired and what it is sold for. When someone makes a capital gain, it is added to their assessable income and may significantly increase the tax they need to pay when it comes to their personal annual income tax return.

However, there are two exceptions to this rule, where the beneficiary sells the inherited property after two years; or if the inherited property is gifted to a beneficiary who lives outside of Australia. More information about exemptions to Capital Gains Tax can be found on the ATO website here.

Capital Gains Tax can be complicated, so the common approach is consuliting with an accountant or financial representative if you have any questions. You can also call the Australian Tax Office on 132 861. The Australian Tax Office website also has some helpful information available.

Capital Gains Tax on real estate

If any real estate was sold during the estate administration process, Capital Gains Tax will apply on the sale value and must be included in the deceased person’s tax return (outlined in Step 9: Probate Process)

Any costs incurred as part of the real estate sale process can be deducted from the deceased estate.

It’s important to note that the date of sale (date a contract is entered into), rather than the settlement date, will determine which financial year Capital Gains Tax will need to be disclosed.

Where else is Capital Gains Tax applied?

Aside from real estate, shares, stocks, cryptocurrency and similar investments, Capital Gains Tax also applies to personal use assets including boats, furniture valued more than $10,000 value per piece, jewellery purchased for more than $500, art collections, electrical goods and household items. Some assets are exempt from capital gains tax, such as: property as your main residence (however there are some exceptions), a car or motorcycle, depreciating assets, and any personal use asset that was acquired for less than $10,000.

Other assets and taxes

There is tax on any inheritance or gift in Australia. In most cases, cash that is inherited won’t attract capital gains tax when transferred to the beneficiary, as it will not be classified as income. However, funds will usually begin to earn interest in the beneficiary’s bank account, so some income taxes may begin to apply. This is also the case for any income on funds held in a trust.

Tax on superannuation

As mentioned in the explanation of superannuation Death Benefit in Step 4, Allowances & Support, superannuation doesn’t generally form part of the deceased estate.

However, if the deceased’s superannuation benefit is paid to a non-dependent person (e.g. someone other than a spouse or former spouse; child aged under 18; or a person dependent on the deceased just before passing), a Death Benefit will be paid as a lump sum, taxed up to 32% on the taxable component. If this is the case, the common approach is to consult with a specialist tax professional to understand the tax applicable to the estate. Tax advice is also recommended where the deceased person held a Self-Managed Super Funds (SMSF).

Prepare Outstanding (and unpaid) Liabilities Record

If you require a Grant of Probate or Letters of Administration, the Executor, Administrator or Next of Kin will need to apply for it through the relevant state or territory’s Supreme Court. Where larger amounts (usually $50,000 or more) are needed to be transferred or claimed on behalf of the deceased estate, this document will authorise approval for the Executor or Administrator to properly administer the estate. The financial organisation like a bank, superannuation or insurance company will need this court document to proceed with the estate administration process.

Grant of Probate or Letters of Administration New South Wales

You can apply to the Supreme Court of New South Wales for a Grant of Probate or Letters of Administration online here. The estimated processing time for probate applications is 20 days, however refer to the website for up-to-date times.

Grant of Probate or Letters of Administration Victoria

You can apply to the Supreme Court of Victoria for a Grant of Probate or Letters of Administration online here. The estimated processing time for probate applications is 5-10 business days.

Grant of Probate or Letters of Administration Queensland

You can apply to the Supreme Court of Queensland for a Grant of Probate or Letters of Administration online here. The estimated processing time for probate applications is three weeks.

Grant of Probate or Letters of Administration Western Australia

You can apply to the Supreme Court of Western Australia for a Grant of Probate or Letters of Administration online here. The estimated processing time for probate applications is eight weeks.

Step 9: Probate Process

This step will explain how to determine if an application for Grant of Probate or Letters of Administration is needed and which kind of application may be relevant to your estate administration circumstances.

Open a Testamentary Trust Account

If the deceased estate is large, you may need to open a post-death testamentary trust. Sometimes a trust account is even requested in the Will. A testamentary trust comes with additional costs, so it is only viable if the estate’s value justifies the need. It is not particularly useful for simple estates, unless the Will specifically requires one. If you wish to consult with an estate administration professional to determine if a trust is needed in your circumstance, give us a call on 1800 202 901, and we will connect you with Bare’s specialist estate administration partners.

What is a testamentary trust account?

In the same way that a person or company can hold assets like funds, real estate and shares, a testamentary trust is a separate entity for tax purposes. A trust can also invest and operate businesses. A testamentary trust can continue for up to 80 years, but they are often wound up earlier.

There are three key roles associated with a testamentary trust account: settlor, trustee and beneficiary:

The settlor is the deceased person who instructed in their Will that a trust must be created.

A trustee (or trustees) is a person or company that holds the property in trust and manages it, therefore holding legal title of the assets within the trust. They have fiduciary duties, which means they are responsible for prudently taking care of the money or other assets of the deceased estate and are liable for any debts administered.

A trust beneficiary is different to a beneficiary of a deceased estate. They are named so because they may have an entitlement to trust income or capital set out in the trust deed or they may receive an entitlement by the Will or law. Based on their share in the trust, a trust beneficiary has to pay income and other taxes based on their share in the trust.
A trust beneficiary may be a person, company or the trustee of another trust. They may also be a beneficiary of the deceased estate, so long as they are not the sole beneficiary or if there is more than one trustee.

Benefits of a testamentary trust

If set up properly, a testamentary trust can provide flexibility and control of the deceased person’s estate, among other many benefits. Depending on the deceased person’s financial and family situation, testamentary trusts can allow provisions for beneficiaries who are not part of the immediate family or who are under 18 years old. Assets held in a testamentary trust become fully accessible to children once they turn 18 or reach the nominated age as set out in the Will.

A testamentary trust also allows income generated from the deceased estate assets, like rental income from an investment property, to be distributed to children of the estate beneficiaries (or grandchildren of the deceased person).

There are many other benefits of a testamentary trust, including some of the following:

  • Allowing equal distribution of the deceased estate
  • The trust having ownership of all assets, rather than the beneficiaries
  • Assets held in trust will be retained if a beneficiary divorces or in the case of bankruptcy or financial difficulty
  • Assets held in trust will be protected if a deceased person’s spouse enters a new relationship later on
  • Allowing provision for beneficiaries who are bad at managing money


Costs of a trust
The significant costs to set up and maintain a testamentary trust account will be a key consideration if you chose to open one. Unless a trust is a requirement of the Will, you should consult with the beneficiaries to determine if the benefits of setting up a post-death trust outweigh the costs.

Some of these costs include:

  • Legal fees ranging from $1,500 to upwards of $10,000 for set-up fees
  • Ongoing bank fees and annual review fees
  • Ongoing accounting and administration fees, and tax advice charges

 

A testamentary trust lets a trustee hold assets for beneficiaries.
A testamentary trust lets a trustee hold assets for beneficiaries.

 

How to set up a testamentary trust as per the Will

If a deceased person’s Will requires a post-death testamentary trust to be set up, the below steps outline what needs to happen. Depending on your situation and requirements, there may be additional steps, but below is a general summary of what’s required.

  1. Review the Will. You’ll need to look for details about the setting up a testamentary trust;
  2. If no trust is required as per the Will, consult with the beneficiaries to determine if the benefits of setting up a post-death trust outweigh the costs. If you decide not to proceed with a trust, you must agree about how to proceed without one;