Estate administration

In bulletin No 1, we explained that “estate administration” refers to both a period of time, as well as the events which occur within that time, beginning at the death of a person and ending when all of the assets nett of liabilities have been finally distributed.

We foreshadowed that we would consider the following issues.

What does probate mean?

Probate is a court order.  It declares that the will which has been presented to the court is valid.  Technically, it is what is known as an interlocutory order.  This means that it can be displaced by a later order of the court revoking it.

Probate is of 2 types:

• common form probate, issued either by the Registrar of the Supreme Court as part of the daily business of the Court or by a Judge (usually after determining some issue referred for determination by the Registrar); or
• solemn form probate issued after or in lieu of common form probate when there has been a trial of issues relating to the validity of the will.

The word “probate” is thought to derive from the same word root as “approbation” meaning “to agree” – when probate issues, the Court in some way has “agreed” that the document put forward is the true last will.

Why is it required in some estates and not in others?

The main determination is the value of assets making up the estate, considered at the individual asset level, not the overall estate value.

For example, an estate in Queensland consisting only of a house property worth $5m would not require probate, yet another estate consisting only of $200,000 in a bank account will.

The reason for the first is that there is a special provision in Queensland legislation that provides that as long as there is a valid will, a Queensland residential title can be dealt with without probate,

The reason for the second is that to close a deceased estate bank account, one must usually comply with the “risk tolerance” of the asset custodian.  In the case of a bank account, the asset custodian is the bank, and most banks will treat $200,000 as being beyond their risk tolerance.  The “risk” is that the bank may pay to the wrong person and be required to pay a second time when another person produces correct credentials to claim the balance.  This “risk” is neutralised when probate (or one of its equivalents – they are all generically called “grants”) is obtained, because a bank which pays out in accordance with a grant has the benefit of a statutory discharge.

How does one apply for probate?

Probate in common form is applied for by a precise formulation of paperwork guided by a set of published forms, mainly affidavits.  Therefore, it is called “common form probate”.

A notice of intention to apply for probate has to be published in Queensland Law Reporter and served on the Public Trustee.  After a prescribed period of time, the original will and any codicils are filed as exhibits to an affidavit by the executors.  The will and codicils are retained permanently by the court.  Other documents including the death certificate showing causes of death, may be filed electronically, though only by solicitors who participate through the Queensland Courts and Tribunals Online Services Portal.

Any unusual features of a probate application are generally dealt with by various specific forms of affidavits.

How does one apply for other types of grants?

One of the more common forms of grant is letters of administration on intestacy.  This grant is obtained where there is no will.

Again, there is a set of published forms which guide the application.

There must be a similar published notice as with probate.  There is no will, and so the person who applies must bring him or herself within a priority list of entitlement, which is published in the court rules.

Sometimes, there is a will (with or without codicils), but no executor is alive, or willing or able to apply for probate.  The grant obtained in such a case is called letters of administration with the will.  The application has some features of an application for probate and some of letters of administration on intestacy.

More to come.

In subsequent bulletins, we will consider issues such as:

• What happens with lost wills?
• What happens with wills which are not written but are in forms such as electronically, computer or iPhone generated, or which are written but not signed?
• How are particular assets of an estate administered in Queensland?
• How are liabilities dealt with?

Article by:

Gary Lanham
Special Counsel
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