Dealing with the administration of a deceased estate is often a complex process that comes at an already difficult time. When someone passes away in Victoria, specific legal procedures must be followed to properly manage their affairs. Melbourne deceased estate lawyers can provide guidance through this process, but understanding the basics is helpful for anyone who finds themselves responsible for an estate.
Key Takeaways
- Secure the death certificate, locate the will, and notify relevant parties immediately after death
- Create a comprehensive inventory of assets and liabilities before applying for probate
- Understand tax obligations and follow proper procedures for transferring property and distributing assets
- Maintain detailed records throughout the administration process to avoid legal complications
- Consider seeking professional advice for complex estates or when disputes arise
Initial steps after a death
The first actions after someone passes away set the foundation for a smooth estate administration. Begin by obtaining multiple original death certificates, as you’ll need these for various institutions and applications.
Next, locate the original will if one exists. This document names the executor responsible for administering the estate and outlines how assets should be distributed. Keep this in a safe place along with other important documents.
Securing the deceased’s property and valuables is also critical. Change locks if necessary, redirect mail, and ensure insurance policies remain active to protect estate assets.
Finally, notify immediate family, beneficiaries named in the will, and organisations like banks, insurers, utility companies, and government departments of the death.
Identify assets and liabilities
A thorough inventory of the estate’s assets and liabilities is essential. This includes:
- Bank accounts, term deposits and cash
- Real estate and vehicles
- Shares, investments and business interests
- Superannuation accounts
- Personal possessions including jewellery, artwork and collectibles
- Digital assets and intellectual property
- Outstanding debts, mortgages and loans
- Tax obligations
Pay special attention to jointly held assets, which may pass directly to the surviving owner rather than forming part of the estate. For significant assets like real estate, formal valuations may be required to establish their worth at the date of death.
Applying for a grant
Most substantial estates in Victoria require a grant of probate (if there’s a will) or letters of administration (if there’s no will). This legal document from the Supreme Court authorises the executor or administrator to deal with the estate assets.
Not all estates need a grant. Small estates or those where assets are jointly held may proceed without one, though financial institutions have different thresholds for requiring probate.
The application involves preparing an inventory of assets and liabilities, completing court forms, placing a probate notice, and submitting these with the original will and death certificate to the Probate Office. Current processing times typically range from 2-6 weeks for straightforward applications.
“Having all documentation meticulously prepared before submitting a probate application can significantly reduce delays and complications in the estate administration process.” – Tonkin Legal
Managing estate finances
Opening a dedicated estate bank account helps maintain clear financial boundaries during administration. This account should be used for all estate transactions, including paying funeral expenses, ongoing bills, and eventually distributing to beneficiaries.
You’ll need to contact financial institutions to freeze the deceased’s accounts and arrange for funds to be transferred to the estate account once probate is granted. Keep detailed records of all transactions, as you’ll need to account for these to beneficiaries.
Maintain sufficient funds to cover all debts and potential claims before making distributions. Executors can be personally liable if they distribute assets prematurely and valid claims arise later.
Tax obligations and final returns
The tax responsibilities for a deceased estate fall into two categories: the deceased’s final individual tax return up to the date of death, and any estate tax returns for income earned during administration.
While Australia has no inheritance or death taxes, capital gains tax considerations apply to assets sold during administration. The ‘cost base’ of assets may be reset at the date of death, which can have significant tax implications when assets are eventually sold.
For estates with complex financial affairs, engaging an accountant with experience in deceased estates is highly recommended to manage these obligations correctly.
Superannuation and life insurance
Superannuation doesn’t automatically form part of a deceased estate. Death benefits may be paid directly to eligible dependants based on binding nominations or trustee discretion. Similarly, life insurance policies may have nominated beneficiaries who receive payments outside the estate.
To claim these benefits, you’ll need to contact each fund or insurer with the death certificate and complete their specific claim forms. Where no valid nomination exists, these assets may flow into the estate for distribution according to the will or intestacy rules.
Transferring assets and making distributions
Once debts are settled and claims periods have expired, assets can be transferred to beneficiaries. Each asset class has different transfer procedures:
For real property, applications must be lodged with Land Use Victoria to transfer ownership. For shares, specific transfer forms are required by share registries. Personal items may be distributed according to specific bequests in the will or as part of the residuary estate.
Prepare distribution statements showing each beneficiary’s entitlement and obtain signed releases acknowledging receipt of their inheritance. These protect the executor from future claims.
Dealing with intestacy and small estates
When someone dies without a valid will in Victoria, their estate is distributed according to the intestacy rules in the Administration and Probate Act. These rules follow a prescribed order of relatives, starting with spouses and children.
Small estates (typically under $100,000, though thresholds vary) may qualify for simplified administration procedures. Many financial institutions will release modest funds without requiring formal probate if certain statutory declarations and indemnities are provided.
Common disputes and estate claims
Family provision claims (formerly known as testator’s family maintenance claims) are the most common disputes in Victorian estates. Certain family members or dependants can contest a will if they believe they weren’t adequately provided for.
These claims typically must be filed within six months of probate being granted. Other disputes may involve questions about the validity of the will, executor conduct, or disputed debts.
Early mediation often resolves these issues more efficiently than court proceedings, preserving more of the estate for beneficiaries.
Timeframes and professional help
The complete administration of an estate typically takes 6-12 months, though complex estates may take years. Major milestones include obtaining probate (1-2 months), settling debts (3-6 months), and final distribution (6-12 months).
Professional fees generally include court filing fees (currently around $300-$600 depending on estate size), legal fees (which may be fixed fee or percentage-based), and accounting fees for tax returns and financial advice.
While simple estates can be administered without legal help, professional assistance is valuable for larger estates, complex assets, potential disputes, or when executors are unfamiliar with the process.
Conclusion
Administering a deceased estate in Victoria involves numerous legal, financial and practical considerations. The process requires methodical organisation, careful record-keeping, and attention to legal obligations. While this guide provides a framework, each estate has unique circumstances that may require specific solutions.
For personalised advice tailored to your situation, Tonkin Legal can provide the expertise to navigate complex estate matters efficiently and minimise stress during an already difficult time.
