When it comes to fulfilling one’s role as an executor, obtaining a Grant of Probate from the Supreme Court of Queensland or being issued Letters of Administration is only half the battle won when it comes to administering the deceased estate.
You may be left wondering, “What must I do next?”
In this article, we share our 12 step checklist for estate administration to help executors complete their duties, claim their commissions and ensure that the process is handled lawfully.
1. Open A Bank Account for the Estate
When you sell or redeem assets in an estate, the funds received should be deposited and separately held in an estate bank account. From that account, the deceased’s liabilities and the administration expenses can then be paid. It is extremely important to keep funds that belong to the estate separate from your own funds.
2. Register For A Tax File Number
You should ascertain whether the deceased has a tax file number and has been lodging tax returns. It will be your responsibility to lodge any tax return.
You can register using this form and send it to the Australian Taxation Office. Please be sure to consult a tax agent to register through them so you can seek the most informed counsel in this regard.
3. Make Certified Copies of the Grant of Probate/Letters of Administration
When it comes to transferring assets of a significant value, it is necessary to obtain certified copies of the Grant of Probate or Letters of Administration. These copies will also be needed for you to access the deceased’s accounts.
Persons such as a solicitor, justice of the peace or anyone else who can provide a statutory declaration are lawfully able to certify these documents and others like the death certificate.
4. Transfer The Assets
Once you’ve completed the above 3 steps, you are able to request that the deceased’s assets be released and transferred to the estate bank account. This will safeguard your position as the executor to follow through with estate/fund distribution in accordance with the Will or the rules of intestacy if there was no Will.
5. Sell The Assets
Where appropriate, assets need to be sold so that the funds can be distributed accordingly.
During this step, it is vital to keep a clear record of the valuations, advertisements and sales contracts of the assets to serve as evidence that you fulfilled your duties and acted in the best interest of the estate.
6. Confirm Transfers
An executor’s due diligence also includes confirming that the transfer of assets or release requests have been deposited and processed in the correct account. It is necessary to check relevant bank accounts for cash deposits and conduct a title search for property ownership transfer.
7. Settle Debts
At this point, you should check for any and/or all outstanding debts. In particular, you should be:
- Advertising for creditors;
- Assessing whether debts are properly due and payable;
- Ensuring that all funeral and testamentary expenses are paid;
- Paying Loans;
- Refunding overpaid pensions and;
- Preparing and lodging tax returns if required.
If there are insufficient funds to pay all debts and liabilities, then before making any payments you should seek urgent legal advice, because some debts and liabilities rank ahead of others.
8. Lodge Tax Returns
This is one of the most important steps in this checklist for estate administration and requires the help of a tax professional.
As the executor, you will be responsible for preparing and lodging one or a combination of the deceased’s tax returns according to your unique situation:
- Individual tax returns of the previous financial year/s;
- A date of death tax return;
- Deceased estate tax return; and
- A trust tax return (if a trust account was in use).
Once the documents have been prepared and lodged, an assessment will be carried out to determine how much tax is payable from the estate.
As always, be sure to consult a professional tax agent to help you through this critical step.
9. Determine The Estate’s Value
With the debts and taxes out of the way and paid, the next step is to get any property valued and finalise an inventory of the assets that are left over to determine the estate’s final value.
10. Distribute The Estate
In accordance with the Will, you should have a list of beneficiaries and what each of them is entitled to so you can commence with the distribution of the estate.
Should there be no Will, the order in which assets are distributed must follow the rules of intestacy.
The executor is required to compile a report and statement of the beneficiaries showing what assets were collected, how much money was raised, as well as the expenses/debts that were paid from the estate.
This report must be given to the beneficiaries when they receive their share of the estate which may include:
- Holding assets pursuant to the terms of any trust under the will (e.g. for minors or people with disabilities);
- Transferring real estate to beneficiaries; and
- Transferring shares to beneficiaries.
Before distributing, it is important to consider whether there are any impediments on you distributing.
For example, an estate should not be distributed within the first 6 months after death. If notice of a family provision claim has been given in the first 6 months, you can not distribute for 9 months after death. If family provision proceedings are commenced, you can not distribute until those proceedings are concluded. There are a variety of possible restrictions, and you should seek legal advice before distributing the estate.
11. Close Off The Accounts
Once all the debts and liabilities have been settled and the deceased estate has been completely distributed, you may commence with closing off the accounts that were used during the estate administration process.
You may do the same for any email/social media accounts that were still in use once confirmed that they are no longer in use.
Additionally, you should carefully file all documents to store safely for at least 7 years in case there is an inquiry into the administration of the estate.
12. Seek Legal Advice During The Estate Administration Process
Dealing with administering a deceased estate can be a time-consuming, complex process that requires legal knowledge and consultation to navigate successfully and protect your own interests as an executor.
Queensland Probate’s team of solicitors are on hand to assist you with any of the steps that we’ve detailed above to make your life as an executor easier.