Estate Administration in WA
The tasks involved in estate administration in Western Australia are complex and time-consuming. The Administration Act 1903 and common law precedent prescribe the nature of these duties and the categories of people who are authorised to carry them out. A personal representative of the deceased (either an executor or administrator, depending on the specific testamentary circumstances) will undertake these tasks. This article outlines the key duties of estate administration in WA and the role of the personal representative in the process.
Who Manages The Estate Administration?
The party responsible for estate administration in WA is one of two types of personal representative. A testator nominates an executor to discharge the wishes expressed in a will. If the deceased is intestate, or a named executor is unavailable or removed from their position, then the Supreme Court of WA appoints an administrator to manage the estate administration according to intestacy rules of succession.
Before the personal representative can take charge of the estate administration, they usually have to obtain authority from the Supreme Court. A named executor applies for a Grant of Probate, and an “appropriate person” applies for either Letters of Administration With The Will Annexed or Letters of Administration depending on whether there is a valid will.
These grants are court orders that authorise the executor or administrator to act on behalf of the deceased estate, allows financial institutions to release the assets of the deceased to the personal representative without liability, and government departments to release information about the deceased.
After funeral arrangements, the preliminary duties of estate administration in WA include locating the most current will of the deceased and identifying the beneficiaries. Once the will is found, or it is established that there is no will, the next step in estate administration is an application for the appropriate type of probate grant. An executor appointed in a will applies for a Grant of Probate, and where there is a will but no executor, the appropriate grant is Letters of Administration With Will Annexed. The other type of grant, Letters of Administration, is required when the deceased died without making a will.
The personal representative must safeguard the assets of the estate from the day they assume responsibility for the estate management until they can be transferred to the beneficiaries of the will or those who inherit under intestacy succession rules. This might necessitate taking out insurance on property securing valuables in storage, or managing financial interests to prevent loss of value. The executor or administrator must also represent the estate in court against any challenge to the validity of the will, or contest against the provisions of the will.
The next phase of estate administration is the identification of debts and creditors of the estate. The personal representative should consult an accountant to understand the tax implications and lodge a final tax return for the deceased. If there are considerable debts and not enough equity available to discharge these debts, then assets of the estate will have to be sold. Any remaining assets are then allocated to the rightful beneficiaries.
Breaches Of Duty In Estate Administration
A personal representative has a duty of care to administer the estate effectively and efficiently and can be held personally liable for any financial loss that the estate suffers. The family of the deceased or another interested person can apply to the court to remove the personal representative from their position, and if the complaint is justified, the court will replace the serving representative with an administrator to discharge the remaining estate administration.
In the course of the estate administration, it may be necessary to establish one or more testamentary trusts, if there are beneficiaries who are not yet adults or are mentally or legally incapable of managing their own affairs. In these circumstances, a trustee will need to be appointed to administer the trust. A trustee can be a trusted family member or professional such as a solicitor or Public Trustee. This role, prescribed by the Trustees Act 1962, typically continues beyond the usual time frames of estate administration.
The personal representative is entitled to repayment for any costs they reasonably incurred in the course of estate administration. This might include personal expenses such as travel costs, and also the repayment of any outlays they made for the estate, such as funeral expenses and court fees.
There is also a facility for a personal representative to apply for compensation for undertaking the estate administration. In WA, an “executor’s commission” can be as much as 5% of the gross value of the estate, depending on the complexity of the task. A personal representative can increase their chances of receiving this commission by keeping a detailed record of the estate administration. This record should emphasise the time taken over each duty, whether any tasks were outsourced to professionals, and whether the estate administration was handled with such care that the estate benefited from the personal representative’s management.
The solicitors at Armstrong Legal can assist you with making a successful application for executor’s commission. Our contested wills team has extensive experience with every aspect estate administration and can assist you with any part of the process. Please contact our team to make an appointment or telephone our office on 1300 038 223.