Determining the size of the estate
One of the main jobs to be done when someone dies is to ensure that all assets are identified and called in. A thorough approach is needed, because there can be additional money ‘hidden’ in obscure insurance policies or old super fund accounts as well as forgotten bank accounts. Going through the deceased’s tax returns and paperwork can help identify the less obvious assets.
The executor or administrator of the estate is the person responsible for these tasks and is legally responsible to do the job competently and promptly.
Ascertaining the institution’s requirements
The executor must ascertain the requirements that need to be met before an institution will release the assets they hold on behalf of the deceased. Each institution (e.g. bank, share registry, managed fund, titles office) has its own distinct requirements. Also, before attending to the collection of assets, you should determine if you need a Grant of Probate or Grant of Letters of Administration, as this process should be commenced as soon as possible. Even if Probate or Letters or Administration are not strictly required, they can save a lot of paperwork and expense in the process of collecting in assets.
Assessing the deceased’s debts
In addition, the executor will need to pay the deceased person’s debts (including estate expenses such as the funeral, as well as taxes) and attend to the release of securities over assets, such as mortgages over property.
It is important to note that not all debts of a person which were incurred during their lifetime are liable to be paid following their death. Also, some assets that may come into the estate are ‘safe’ from being required to be allocated to the payment of debts. An executor needs to be aware of these, so they do not dissipate an estate unnecessarily and open themselves up to personal risk. Tax consequences of various assets and liabilities also need to be considered carefully at this time.
All estate liabilities should be attended to before the estate if distributed to beneficiaries.
You don’t know what you don’t know – Get advice from the estate administration experts
At Estate First Lawyers we can assist you with all of the advice you need to understand your obligations and rights as executor and the practical steps to call in assets and pay any liabilities associated with a deceased estate. Please contact us to make an appointment or for further information.
Frequently Asked Questions
What assets must be collected on the death of a person?
The assets of a deceased person’s estate must be collected by an executor, as well as any assets the estate becomes entitled to. This automatically includes assets (bank accounts, property, shares, etc.) in the deceased person’s sole name (or property held as ‘tenants-in-common’), ongoing contractual benefits (such as royalties, etc.) and may also include life insurance proceeds and superannuation death benefits, if these amounts are payable to the person’s estate.
What happens to a bank account when someone dies?
When someone dies, any bank accounts in their sole name must be closed. Once the bank is informed of a person’s death, they will generally freeze the account until the proper person (executor or administrator) claims the funds on behalf of the estate. If the person held any joint accounts, then the remaining account holder will need to deal with the bank to have the account changed into the name of the surviving account-holder.
How do I find out what assets or liabilities a person has after their death?
Determining what assets and liabilities need to be dealt with can be a big job. A good starting point is reviewing paperwork in the deceased’s home, as well as liaising with their estate planning lawyer, financial advisor and accountant. There are other searches and options available to locate assets and liabilities, such as searching for property in a titles registry of a particular State, searches for lost funds (including) which may have been surrendered to government agencies and so on.
How long does it take to administer an estate?
The time it takes to administer an estate depends on certain legal timeframes, as well as any potential complexity associated with the estate (due to assets, liabilities or beneficiaries, for example). Even in a straightforward estate administration it is not uncommon for an estate to take 6-12 months to administer. Also, each State specifies a time frame within which an estate claim may be made by an eligible applicant, and executors and administrators risk personal liability if they distribute the estate before the prescribed time frames for an estate claim.
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