Probate; What is it and when is it needed?

Posted on Feb 26, 2016 by Christine Knoll   |   Categories: Probate & Deceased Estate Administration, Wills & Estates

Two of the most common questions that clients ask when a loved one dies are; “Do I need to apply for Probate?” And “What is Probate?”

When a person dies, they leave behind assets and liabilities that are collectively known as their “estate”. All estates must be dealt with by someone, usually the Executor appointed in the deceased’s Will to manage the division and sale of assets and payment of debts.

Probate is the process of proving and registering in the Supreme Court the last Will and Testament of the deceased and is usually undertaken by the Executor. The reason that a Grant of Probate is necessary is that when a person dies, banks or companies which hold the deceased’s assets, or to whom the deceased owed money, will require official proof that the Executor has the authority to act on the behalf of the estate. The Supreme Court Grant of Probate is the official document recognised by institutions as evidence of this authority.

However, there are certain circumstances in which probate is not required, such as:

  1. When the deceased does not leave a Will and you instead require an alternative court order called “Letters of Administration”;
  2. Where the deceased’s assets are of low value;
  3. Where the deceased’s assets had been sold and divided prior to death; and
  4. Where the whole of their assets are held as “joint tenants” with their partner – this means that their share automatically transfers to the other joint tenant.

How do I decide if Probate is required?

The first step in determining whether Probate is required is to write a list of all of the assets owned by the deceased, including:

  1. How they are held (either jointly, solely, or as tenants in common);
  2. Where they are held (Name of the bank, share register etc.);
  3. Their current market value; and
  4. Whether there are any mortgages or other liabilities associated with the assets?

 

Once you have a clearer picture of what assets and liabilities the deceased had, it will be easier to determine if you require a Grant of Probate to finalise the estate. For any estate that does not meet the limited exceptions listed above, there would need to be an application for a Grant of Probate.

If you require further information about wills, Executors roles, or Probate, please contact Baker Love’s experienced Wills and Estate Planning Team on 4944 3322.