Deceased Estate Lawyers in Melbourne
What Is a Deceased Estate?
In Victoria, a deceased estate refers to the assets, liabilities and legal matters left behind after a person dies. It includes all the property, possessions, financial accounts, investments and debts owned by the deceased individual.
Dealing with deceased estates involve distributing and managing these assets according to the deceased person’s wishes as stated in their will, or according to intestacy laws if no valid will exists. Jointly owned assets, such as shared bank account or property, may have specific rules for their distribution, which can affect how the estate is administered.
Who Is Responsible For Administering a Deceased Estate?
When a person dies, their estate becomes the responsibility of an executor or administrator, who is typically named in the will. The executor’s role is to administer deceased estates, handling various tasks related to its management and distribution.
If the deceased did not leave a will, the Supreme Court appoints an administrator to handle the administration of the deceased person’s estate. The administrator is typically a close relative or next of kin of the deceased person. The order of priority for the appointment of an administrator in Victoria is outlined in the Administration and Probate Act 1958.
Tasks Involved In Administering a Deceased Estate
Administering a deceased estate typically involves the following process:
- Probate: If required, the executor applies for probate, which is a legal process that validates the deceased person’s will and grants authority to administer the estate.
- Identifying and gathering assets: The executor locates and compiles a comprehensive list of the deceased person’s assets which includes properties, bank accounts, investments, vehicles, personal belongings and any other valuables.
- Valuation of estate assets: The executor arranges for the valuation of assets to determine their market worth. This is essential for accurate distribution and for meeting any tax obligations.
- Paying off debts: The executor identifies and pays off any outstanding debts owed by the deceased person using the assets of the estate. This includes mortgages, loans, credit card debts, utility bills and any other obligations.
- Distributing assets: The executor ensures that the assets of the deceased estate are distributed according to the instructions outlined in the will. If there is no valid will, distribution is governed by intestacy laws, which determine the order of inheritance among surviving relatives.
- Settling taxes: The executor is responsible for fulfilling any tax obligations of the deceased person and the estate, including income tax, capital gains tax, and potentially, inheritance tax. They may need to work with accountants or tax professionals to complete the necessary filings.
- Resolving legal matters: The executor will need to handle any legal matters related to the deceased estate, such as resolving disputes or claims against the estate, addressing will disputes or engaging in litigation if necessary.
- Closing the estate: Once all debts are settled, taxes are paid, and the deceased’s assets are distributed, the executor finalizes the estate administration process and formally closes the estate.
Dealing with a deceased estate can be a complex and time-consuming process. It often requires the assistance of an experienced wills and estates lawyer to ensure that all legal requirements are met and the deceased person’s wishes are fulfilled.
Which Debts Are Paid From A Deceased Estate?
When administering a deceased estate, the following types of debts are typically paid using the assets of the estate:
- Funeral expenses: The costs associated with the deceased person’s funeral and burial or cremation arrangements are generally considered a priority debt and are paid from the deceased’s estate.
- Administrative expenses: These include expenses related to the administration of the estate, such as legal fees, executor fees, and costs associated with obtaining a grant of probate or letters of administration.
- Taxes: Any outstanding taxes owed by the deceased person, such as income tax or capital gains tax up until the date of death, are usually paid from the estate.
- Debts owed to secured creditors: Secured debts, such as mortgages or loans where the debt is secured against a specific asset (such as a house or a car), are typically paid from the proceeds of the sale of the secured asset. If the asset is not sold, the beneficiary receiving the asset may assume the responsibility for the debt.
- Unsecured debts: Unsecured debts, such as credit card debts, personal loans, medical bills, or utility bills are generally paid from the remaining assets of the estate.
What Happens If The Debts Cannot Be Discharged?
If the debts of a deceased person cannot be fully discharged using the assets of the estate, one of the following outcomes typically result:
- If the total debts of the deceased person exceed the value of their assets, the estate is considered insolvent. In such cases, the estate is typically handled in accordance with insolvency laws and procedures. The assets may be sold, and the proceeds are distributed among the creditors based on the priority order determined by the estate law. Creditors may not receive full repayment of their debts, and the remaining unpaid debts are generally written off.
- In most cases, the beneficiaries of the estate are not personally liable for the debts of the deceased person. The debts are generally the responsibility of the estate, and creditors can only seek repayment from the assets within the estate. If the estate is insufficient to cover the debts, the creditors may not have further recourse against the beneficiaries.
- The executor or administrator of the estate may engage in negotiations with creditors to try and reach agreements on debt repayment. This could involve discussing repayment plans, negotiating reduced amounts, or requesting waivers or forgiveness of some debts. Creditors may be willing to accommodate such arrangements if it increases their chances of receiving some repayment.
- If the estate is insufficient to cover the debts, it may impact the amount that beneficiaries receive from the estate. In some cases, beneficiaries may receive a reduced inheritance or no inheritance at all, depending on the extent of the debt and the value of the remaining assets.
- Insolvent estates and debt repayment can be complex situations and should be discussed with an estate lawyer.
What If There Is No Will?
In Victoria, if a person dies without leaving a valid will, they are said to have died “intestate”. In these cases, the distribution of the deceased person’s intestate estate is determined by the intestacy laws of Victoria.
The process usually goes as follows:
- The court appoints an administrator to handle the administration of the estate. The administrator is usually a close relative or next of kin of the deceased person. The order of priority for appointment follows the Administration and Probate Act 1958.
- The estate is distributed among the surviving family members according to the intestacy laws. The specific rules for distribution vary depending on the family structure and the presence of certain relatives.
- If there are no eligible relatives determined by the intestacy laws, the estate generally passes to the Crown or the state government of Victoria.
In What Circumstances Is Probate Required?
In Victoria, probate is generally required in the following circumstances:
- If the deceased person owned real estate, such as a house or land, solely in their name, probate is usually required to transfer ownership of the property to the beneficiaries or to sell it.
- If the deceased person held significant assets, such as bank accounts, investments, or valuable personal property, solely in their name, probate may be necessary to establish the legal authority of the executor to access and distribute those assets.
- Some banks, financial institutions, or other organizations may require a grant of probate before they release or transfer assets to the executor or beneficiaries.
- If there are estate disputes or complexities surrounding the validity of the will, such as claims of undue influence, lack of capacity, or improper execution, obtaining a grant of probate can provide a legal determination of the will’s validity and resolve any related issues.
Dealing With a Deceased Estate?
If you are in charge of administering a deceased estate, or you need legal services or assistance regarding a deceased estate, our estate lawyers are able to help you with all matters relating to deceased estate matters including:
- Administering Estates
- Contesting Wills, Family Trusts and Estate Disputes & Litigation
- Obtaining Probate
- And More
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