The Law Handbook 2024

Chapter 9.4: Estates 905 Also, the six-month limitation period referred to in s 99 of the Administration and Probate Act 1958 (‘ A&P Act ’) for making family provision claims (discussed further below) begins from the date of the grant, rather than the date of the deceased’s death. The limitation period cannot commence, and therefore expire, until the grant has been made. A grant therefore, has the benefit of removing any personal liability which an LPR may face where assets are distributed without a grant being obtained, and a successful application for further provision is brought. Executors, administrators and trustees Duties of executors and administrators The responsibilities of an LPR generally begin with arranging the funeral. Where there is no valid will, the responsibilities of the administrator depend entirely on obtaining the grant of letters of administration. Without that grant they have no standing at all and the estate vests in the State Trustees until letters of administration are granted (s 19A&PAct). Once letters of administration are granted, the administrator’s duties are the same as those of an executor (s 27). An executor should obtain a grant of probate as soon as possible, although as will be seen below, executors have certain powers before probate is obtained. The beneficiaries have no interest in the deceased’s property until the executor is in a position to distribute the estate; before this occurs all they have is a right to sue the executor if they fail to administer the estate diligently and correctly. An LPR is not required to distribute the net assets of the estate immediately (s 49 A&P Act) but must make reasonable efforts in all the circumstances to wind up the estate promptly. While there is no rule or law about this, courts usually allow 12 months from the date of death for the estate administration to be completed. However, an LPR should be aware that beneficiaries are entitled to interest on a gift of money if it is not paid within 12 months of the date of death (s 39(b) A&P Act). Further, it may be advisable for an LPR to distribute the estate immediately after the six- month limitation period expires, if a family provision claim is likely. Delay may cause particular problems where the major or sole beneficiary is someone (particularly a spouse or domestic partner) with no source of income other than that deriving from the deceased. (A definition of ‘domestic partner’ is included in ‘Disadvantages of intestacy’, below.) Married couples may maintain a joint bank account that either spouse may access. On the death of either of the account holders, the survivor automatically acquires the right to the entire account and will then have access to money until the estate is finalised. A spouse or domestic partner of the deceased should, if left without income, apply for an appropriate social security payment (see Chapter 5.1: Dealing with social security). The major duty of an LPR is to collect the deceased’s assets, pay the deceased’s proper debts, and distribute the net proceeds of the assets according to the directions in the will or pursuant to the statutory order on intestacy. The debts of the deceased must be ascertained and paid before any distribution of the estate is made; these include income tax debts. Funeral and testamentary expenses must be paid in priority to all other debts of the deceased, which must also be paid before the estate can be distributed (see ss 37, 39A, 39B, 40 A&P Act). An executor should advertise in the form of schedule 2 of the Trustee Act 1958 (Vic) (‘ TrusteeAct ’) for claims against the estate to be made to them within two months of the advertisement (see s 33 sch 2 Trustee Act); (and see ‘Time for payment of debts’, below). An LPR must keep detailed accounts and records of the administration of the estate (s 28 A&P Act). The Registrar of Probates has the power to have an LPRfile accounts with the court in the formstipulated in the Supreme Court (Administration and Probate) Rules 2014 (Vic) (‘ A&P Rules ’). A beneficiary has the right to inspect and copy any documents or accounts relevant to that person’s interest in the estate. Powers of the executor The executor has the choice of paying funeral expenses at an early date if funds permit. Banks will often advance funds to pay funeral costs following the production of an invoice from a funeral parlour, without the need to produce probate. Sometimes, banks can also make payments to creditors to avoid