Estate Administration Sydney

Anyone who has ever been the executor or administrator of a deceased estate in Sydney will know that estate administration is in many cases a demanding and difficult role. In Sydney, the Probate and Administration Act 1891 (NSW) and common law principles govern the duties and responsibilities of estate administration. This article expands on these statutory duties and the processes involved in estate administration in Sydney.

Who Is In Charge Of Estate Administration In Sydney?

Estate administration in Sydney is the responsibility of two distinct types of personal representative: executors and administrators.

A testator selects an executor when they are drawing up their will. The testator chooses someone they trust to handle the estate administration, including managing the relationship between beneficiaries. The executor is empowered to follow the deceased’s instructions left in a valid will, as long as they are practically and legally possible.

There are professionals who can act as executors, such as solicitors or the NSW Public Trustee and Guardian. More typically, the testator entrusts the estate administration to a member of their own family, such as their spouse or adult child.

Of course, if the deceased did not leave a will then there can be no nominated executor. In fact, even if there is a will, sometimes the executor who is listed will no longer be available or willing to act. In either case, the absence of an executor means that the Supreme Court of New South Wales must authorise an appropriate person to act as administrator of the estate.

An administrator follows the deceased’s wishes in the will if there is a valid will. If there is no will, they follow the rules of intestate succession outlined in the Succession Act 2006.

Probate

There are several important preliminary steps for a personal representative.

Firstly, it is usually necessary for the executor or administrator to obtain a probate grant from the Supreme Court. This grant validates any testamentary documents and legally authorise a personal representative to oversee the estate administration in Sydney. Depending on the testator’s circumstances, the representative will apply for one of the following types of probate grant:

• Grant of Probate (an executor makes an application for probate of a valid will);
• Letters of Administration with the Will Annexed  (a prospective administrator makes an application for probate of a valid will);
• Letters of Administration (a prospective administrator makes an application for probate of an intestate estate); or
• Reseal of Grant of Probate or Letters of Administration (a personal representative makes an application for legal recognition of a grant issued in another jurisdiction).

In Sydney, it is not always necessary for a personal representative to seek a probate grant before they can handle the estate administration. There is no legal requirement to have a probate grant, and banks and other companies in Sydney will often release smaller assets to a deceased’s next of kin without this form of court authorisation. In addition, there is no requirement for a grant of probate to be obtained to enable the transfer of real property when the property is jointly owned with another person.

Duties Involved In Estate Administration In Sydney

One of the first tasks of the personal representative is to compile a list of the liabilities and assets of the estate. This will give the executor or administrator a clearer picture of the size and complexity of the estate. The personal representative will pay debts in an order of priority, starting with funeral and burial expenses and secured debts, before paying unsecured debts. After the estate’s debts are paid, the residual estate will be distributed to the rightful beneficiaries either in line with the testator’s wishes or according to intestacy law.

The main responsibility of a personal representative is to protect the interests of the beneficiaries and the estate at large until the assets can be transferred out of the estate. In order to best discharge this duty, the executor or administrator may need to arrange insurance or secure storage for valuables, or even make sure a business continues to trade until it can be sold or transferred to a beneficiary.

The personal representative also has a duty as part of his or her estate administration to defend the estate in case someone mounts a challenge to the validity of the will, or makes a Family Provision Claim against the estate. If the personal representative does not discharge this duty (or any other estate administration duty) conscientiously, then an interested party can request the removal of the executor or administrator. If the complaint is substantiated, the Court will appoint a more suitable administrator to complete the estate administration.

Timelines For Estate Administration In Sydney

In Sydney, a personal representative cannot give out the assets of the estate immediately, they must wait six months to allow time for claimants and creditors to come forward. Of course, the process of estate administration may extend beyond this time if there are legal challenges to the will or other complications that delay probate. An executor should prepare for the possibility that they may be involved in the estate for a year or more, especially if there are testamentary trusts for minor children.

Who Gets Paid For Estate Administration In Sydney?

A testator can arrange for the appointment of a professional executor who will be paid a fee to complete the duties involved in estate administration. This is common where the estate is going to be relatively complex, and the testator does not wish to burden a family member or friend.

For most straightforward estates, however, the testator will choose a family member to act as their personal representative. In Sydney, a personal representative typically does this work because as a beneficiary of the estate, managing the estate is in his or her own interests. Sometimes when an executor or administrator feels that their work was particularly arduous and time-consuming, they can apply for a commission of no more than 2% of the total estate.

If you have any questions about estate administration in Sydney, please contact Armstrong Legal on 1300 038 223. Our solicitors can assist you with every step in the process, from probate applications to will disputes.