What is a Letter of Administration? (NSW)
The Supreme Court of New South Wales issues a Letter of Administration to legally appoint an applicant as the administrator of a deceased estate. This type of grant is issued when the deceased died partially or wholly intestate (without writing a will), or where the appointed executor is unavailable to take responsibility for the estate. This article outlines the purpose of a Letter of Administration, identifies when the grant is required and examines the role of the administrator.
What is a Letter of Administration?
The Supreme Court of NSW can only issue a Letter of Administration for the estate of a person who resided in New South Wales before their death or who owned property in the state. A Letter of Administration is typically granted when someone dies intestate. The grant authorises the applicant to assume responsibility for the estate, including the liabilities and assets of the deceased. Government departments, banks, and trade agents will often not release assets to the administrator without sighting a Letter of Administration.
Where the deceased has written a valid will appointing an executor, a Letter of Administration is typically not required. The exception to this is when the nominated executors are unable or unwilling to act in the role, in which case an application for a Letter of Administration with the Will Annexed is required to appoint an administrator.
Who is Eligible to Apply for a Letter of Administration?
The Probate and Administration Act 1898 limits the list of people who are eligible to apply. The Supreme Court will generally only issue a Letter of Administration to a competent adult who is a potential beneficiary or creditor of the estate. Letters of Administration are typically granted to a close relative of the deceased, usually a spouse or a child. Someone outside Australia cannot apply for a Letter of Administration, so if the only eligible beneficiary lives overseas they must appoint a solicitor to apply for a Letter of Administration in their stead. In the event that there are several eligible parties, they can apply jointly for a Letter of Administration, or one person can apply with the endorsement (by written affidavit) of any other beneficiaries. Alternatively, if there is no consensus over who should apply for the grant, the court will assess the respective merits of the competing claims. In this case the court usually makes the grant to the deceased’s closest living relative, typically their spouse or de facto partner, or an adult child.
If the assessment of the competing claims would otherwise delay the administration of the estate, the court can appoint a special administrator temporarily until the permanent administrator is chosen. A special administrator has limited powers over the estate and is not a replacement for an actual administrator.
If no relative is willing to apply for a Letter of Administration, the court can appoint the Trustee & Guardian instead, or entertain an application from another interested party, such as a creditor of the estate.
Duties of an Administrator
The administrator is authorised to manage and protect the deceased estate according to either the valid will of the testator or if the deceased was intestate, according to the laws of intestacy in NSW. The administrator is responsible for collecting together and valuing the assets of the estate and discharging the debts of the estate. The administrator must lodge a final tax return for the deceased and establish any discretionary trusts that are dictated by the will. Part of the responsibility to protect the estate includes the obligation to defend the estate from challenges and contests in court.
What is the Time Frame for a Letter of Administration in NSW?
An application for a Letter of Administration must be filed with the court sometime in the six months after the date of death. The court may accept a late application if there is a reasonable excuse for the delay, and the parties agree to the appointment of the administrator. The administration of the estate is typically completed within a year of the deceased passing away. A longer period may be the result of complexities in the administration, or due to unreasonable delay on the part of the administrator. If the delay is unreasonable, then the court may replace the administrator.
The interval between application and grant of a Letter of Administration depends on how many cases are before the court at the time. Applications for this type of grant are more complicated than Grants of Probate, so the processing time might be as long as 4 months.
Armstrong Legal can help you apply for a Letter of Administration to avoid as much delay as possible. For further advice on what a Letter of Administration authorises in NSW, or information on the responsibilities of an administrator, please call Armstrong Legal on 1300 038 223 or email us to make an appointment.