When intestacy occurs
When a person dies leaving real property (land or anything attached to it) or personal property of any kind, that property must be distributed. The deceased can direct, during his or her lifetime, how the estate is to be distributed after death by drawing up a will. Intestacy occurs when either the whole or part of the deceased’s estate is not disposed of by a will. Total intestacy occurs when the deceased failed to make a will at all, failed to make a valid will or made a valid will but all the beneficiaries have since died. Partial intestacy occurs when the deceased made a valid will but the terms of the will do not dispose of the whole of the estate. This kit is aimed at the situation where the deceased dies without having made a will.
The distribution of an intestate estate
State law allows for the appointment of an administrator to administrate the deceased’s estate in the absence of a will appointing an executor chosen by the deceased. This person is given the duty of paying any debts the estate owed and distributing the assets in accordance with the rules of intestacy. They are given legal authority to act under a court order which is known as the grant of letters of administration.
Who can apply for letters of administration?
The individual State legislation sets out who can be appointed as an administrator. The State Supreme Court can appoint a spouse (Including de facto), one or more of the next of kin or the spouse together with one or more of the next of kin. If no such person exists or if, in the opinion of the court, the person concerned is not fit to be trusted with the responsibility, the Court can grant administration to any person it thinks fit.
The role of the administrator
On the grant of administration of the deceased’s estate, all the deceased’s assets become vested with (become the property of) the administrator. For example, if the deceased held shares in a company, upon seeing the grant from the court, the company will register the administrator as the shareholder in place of the deceased. This will enable the administrator to sell the shares and distribute the proceeds in accordance with the intestacy rules discussed below. The legal authority of the administrator to deal with the deceased person’s estate has been confirmed by the court. This will satisfy those institutions who hold the deceased’s assets that the administrator has the authority to deal with those assets and will give the administrator some protection from liability in dealing with the estate.
The purpose of the State rules of intestacy
Intestacy occurs quite frequently in Australia. The aim of the legislation in each state is to put try and produce the same sort of result as if the deceased had made a will. It identifies the deceased’s closest relatives as the main beneficiaries and assumes that these are the people that the deceased would most want to benefit. The rules make assumptions about who the deceased is closest to. The rules do not therefore take account of individual circumstances. The rules are designed to act as a safety net to protect those who have failed for whatever reason to direct what they would like to happen to their assets when they die.Do I need to obtain letters of administration?
Not necessarily. The main reason that a grant of letters of administration is required is that some organisations which hold assets of the estate will not release them to the administrator for distribution without sight of a grant of representation from the Supreme Court. You will need to make a list of everything the deceased owned or was entitled to and then make contact with the financial institutions concerned to establish whether they require a grant. This will be more relevant for smaller estates. For larger estates comprising real estate, a grant of representation will almost certainly be required.
Other circumstances where letters of administration may be granted
Where there is a will but the Executors are not able or willing to actThis can be the case where one or more of the named executors have predeceased the testator or are elderly and unwilling or otherwise not available to make the application for Probate. There is provision for an application to be made for LETTERS OF ADMINISTRATION WITH THE WILL ANNEXED. Any person with an interest in the estate can make this application.
Where the will is found to be invalid
An invalid will is one in which there is a deficiency of one or more of the points made above which define a valid will. Probate cannot be granted in such a case but the Court will give "LETTERS OF ADMINISTRATION WITH THE WILL ANNEXED" to an executor named in the will so as to enable the administration of the estate of the deceased. The applicant may be the person nominated in the will or document stating a testamentary intention as the executor if that has been done, otherwise any person who has an interest in the affairs of the deceased may make application for Letters of Administration.
Where there is partial intestacy
Partial intestacy occurs where there is a will but it does not deal with all the assets of the estate. In this case an application for a Grant of Probate is made generally by the executor named in the will and the assets which are included in the will are dealt with according to the will and those assets not included are disposed of to the beneficiaries according to the rules of intestacy.
See other pages about probate: NSW probate, VIC probate, QLD probate, SA probate. WA probate, TAS probate, ACT probate, NT probate.
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