Notification of assets
It is important to ensure that you notify your solicitors of all assets and all liabilities of the Estate. It will be necessary to obtain a letter from each institution where funds are held specifying the amount held on behalf of the Deceased as at the date of death so that your solicitors may verify these amounts. Any delay in supplying verification of the value of the assets and liabilities will delay completion of the application to the Court for a Grant of Probate.
Correspondence with beneficiaries
It is the executor’s duty to keep the beneficiaries informed of the application to the court where applicable, and the administration of the estate. In our experience it is best if the executor attends to that duty personally.
Of course, if it is more convenient for your solicitors to communicate directly with all beneficiaries we will be pleased to do so if we receive your specific instructions to that effect.
As an executor, you should consult with your accountant in relation to any taxation requirements of the Estate. As your solicitors, if you require any assistance in this regard, we are happy to help.
There are two relevant tax periods. It may be necessary for your accountant to lodge a tax return for the Deceased for income received to the date of death. A second return may need to be lodged for the Estate in respect of income earned from the date of death until the date of finalisation of the administration of the Estate.
Before any final distribution is made of assets of the estate you must satisfy yourself that the estate has no taxation liability either at that point in time and no future potential tax liability. If after seeking taxation advice you are of the view that there could be a potential tax liability it is critical that you provide written instructions to your solicitors to retain moneys in trust to meet that potential liability.
Bankruptcy of beneficiaries
It is essential that you distribute bequests to the correct persons identified in the will and that you receive a full and proper legal discharge to the payments. For this reason it is important to be aware of a beneficiary that is subject to any legal incapacity such as being under age, having a diminished legal capacity or being a bankrupt so that steps can be taken to ensure that moneys are paid to a person with proper legal standing to provide a discharge for the payment. Such person could be a legal guardian, the Office of the Protective Commissioner or a trustee in bankruptcy. We advise that you should do a bankruptcy search of the beneficiaries before estate funds are distributed to them.
Costs when there is an Application to the Supreme Court
There are 2 types of costs payable when there is an Application to the Supreme Court for a Grant of Probate or Letters of Administration:
(a) costs on the Application to Court. These costs are regulated by the Court and fixed according to the value of the estate. At this time a copy of the inventory will be forwarded to you together with a written fee advice based on the Court’s regulated fees.
Please note that the Court’s regulated fee can be checked on the Court’s website which will provide information as to the regulated fee for any given value of estate assets.
(b) costs for the administration of the estate. These costs include all work done which is not part of the Court Application including the redemption and sale of assets, preparation of distribution statements, distribution to beneficiaries, notifications to authorities and the like.
Steps to apply for Grant
In order to apply for a grant of Probate to administer the Estate, the steps which we will take on your behalf include the following:-
1. We will advertise your intention to apply for a Grant of Probate (a requirement of the Grant).
2. We will verify the estimated value of assets and will lodge your Application with the Supreme Court.
3. We will advertise your intention to distribute the Estate to protect you from any claims against yourself as executor.
Steps for administration
Work on the Application to the Court and for the administration of the estate will proceed concurrently. After issue of the Grant we will collect the assets of the Estate for distribution and we will attend to payment of any liabilities notified to us.
Distribution of assets
Distribution may not be made before a date which is 6 months after the date of death of the deceased. Distribution of assets before that date may render the executor personally liable to meet claims upon the estate.
Duty to invest estate funds
Funds will normally be received into our trust account for the estate in the month following notification to you of the issue of the grant. Funds which are held in our trust account do not accrue interest on behalf of the estate.
As executor, you have a duty to ensure that estate funds are invested for the benefit of the estate pending final distribution of the estate. It is also your duty to ensure that proper authority is provided to us for the investment of those funds where appropriate.
The duty to invest will particularly arise if funds are held in trust for any length of time as a result of a delay in the distribution of the estate. Such delays can arise if there is a dispute or potential dispute in relation to the estate or the location of any beneficiary is uncertain. If you are unsure of your obligations in this regard you must take the initiative and consult your lawyer for advice and take active steps to ensure that funds held in our trust account are invested.
Following the Global Financial Crisis in 2008 some investment institutions have been adopting a policy of freezing investment funds and redeeming investments on a periodic basis as and when funds become available. Often the sums immediately redeemed by an affected institution are not the full amount of the investment and funds are retained by an affected institution without notice. It is our practice to check that redemption of funds is complete at the conclusion of the administration but executors are advised to carefully check all redeemed sums against the estimated value of investments provide to us at the commencement of the matter and to raise any queries in relation to the sums redeemed at the first opportunity.
If you would like professional assistance with your legal matters, please contact us at O’Brien, Connors & Kennett