Probate in New South Wales (NSW) is the legal process where the Supreme Court formally recognises a person’s will and authorises the Executor to manage and distribute the deceased’s assets. The Executor named in the will must apply for a Grant of Probate before they can collect assets, pay debts, and transfer property to beneficiaries.
Applying for probate in NSW might seem straightforward at first glance, but the reality is that it can quickly become complex and fraught with challenges. Understanding the legal intricacies involved is crucial, as making mistakes can not only delay the entire estate settlement process but also expose you, as the Executor, to personal liability. In this article, we will explore 5 critical mistakes to avoid when applying for probate and offer insights to assist you in navigating the process effectively.
1. Not Understanding If Probate Is Actually Needed
The necessity of applying for a Grant of Probate is determined by various factors. Not every estate requires probate. A lack of understanding in this area can result in unnecessary complications. Probate is usually needed if the deceased owned real estate or significant assets in their sole name, but may not be required for smaller estates or jointly owned assets.
Small Estates: If the estate is small or if the assets are held jointly, for example, a home owned with a surviving spouse, probate may not be necessary. In such cases, the surviving joint owner can typically transfer the property without the need to apply for probate.
Significant Asset: However, if the estate includes significant assets such as real estate, large bank accounts (typically over $50,000) or shares, financial institutions typically require a Grant of Probate before they will release these assets to the executor.
Before moving forward, it’s advisable to consult with banks, superannuation funds, or the land titles office to ascertain whether a probate grant is necessary for the assets in question. Taking this proactive step can help you save both time and effort.
2. Filing Before Advertising
In NSW, it is a legal requirement to advertise your intention to apply for probate on the Supreme Court website at least 14 days prior to filing your application. To lodge a Notice of Intention to Apply for Probate in NSW, you must create an account on the NSW Online Registry, complete the online form with details about the deceased and the executor, pay a small publication fee, and submit the notice. Once published, you must wait at least 14 days before filing the full probate application with the Supreme Court.
In NSW, it is legally required to advertise your intention to apply for probate on the Supreme Court website at least 14 days before submitting your application. To lodge a Notice of Intention to Apply for Probate in NSW, you must create an account on the NSW Online Registry, complete the online form with details about the deceased and the executor, pay a small publication fee, and submit the notice. Once published, you must wait at least 14 days before filing the full probate application with the Supreme Court.
Purpose of Advertising: This advertisement is intended to notify creditors and interested parties of your intention to apply for probate, giving them an opportunity to come forward with any claims against the estate.
Consequences of Skipping This Step: Failing to properly advertise or rushing through this process can lead to your application being rejected, leading to further delays.
You can make use of the NSW Online Registry to ensure your notice is posted accurately and to monitor the necessary timeline. This will help you remain organised and compliant with legal obligations. Alternatively, consider seeking advice from a lawyer who can assist you throughout this process, ensuring that your legal obligations are met and preventing unnecessary delays.
3. Using the Wrong Documents (or Incomplete Ones)
Probate applications require precise and complete documentation. Commonly required documents include:
Original Death Certificate: For the probate application in NSW, the original death certificate is essential. The Supreme Court requires the original certificate to confirm the deceased’s passing. However, you will need to submit a certified copy of the death certificate as part of the application.
The Original Will: Always submit the original will, as copies are not accepted. The original will must be filed with the probate application when applying for probate in NSW. The Supreme Court requires the original document to confirm its validity. The original is returned, but only upon request.
Inventory of Property: An Inventory of Property (also called an Inventory of Assets and Liabilities) must be filed with the Supreme Court. This document lists all the deceased’s assets (like real estate, bank accounts, shares, personal belongings) and any known liabilities (like debts or mortgages) at the date of death. It forms part of the formal probate application and helps the Court understand the size and nature of the estate before granting probate.
Affidavit of Executor: This document confirms your role and responsibilities as the executor. When applying for probate through the NSW Online Registry, the system generates a draft Affidavit of Executor based on your answers to an online questionnaire. You must download, print, and sign the affidavit in front of an authorised witness (like a solicitor or JP), then scan and upload the signed version back to the portal to complete your application.
Probate involves complex legal procedures and requirements. A lawyer ensures all documents, such as the will, affidavits, and inventory of assets, are correctly filed and comply with NSW law. Even small mistakes or omissions can delay the process or result in a refusal of the application.
4. Failing to Handle Debts, Claims, Taxes and Distribution of Estate Assets
One of the most critical responsibilities of an executor is to settle any debts and legal claims before distributing the estate’s assets. In NSW, an executor can be personally liable if they fail to properly fulfill their responsibilities in handling the estate.
a) Failure to Pay Debts Properly
Personal Liability: If an executor distributes assets to beneficiaries before all debts (such as taxes, funeral expenses, or creditor claims) are paid, they may be personally liable to the creditors or tax authorities for the unpaid debts.
Example: If an executor distributes the estate without first paying outstanding debts, and creditors later come forward to claim the money, the executor may be required to repay those debts from their own pocket if there are not enough funds left in the estate.
b) Failure to Handle Claims
Personal Liability: If the executor mishandles a claim against the estate, such as failing to resolve it or paying a disputed claim without proper validation, they could be held personally liable for any resulting damages or costs.
Example: If a creditor or beneficiary disputes the estate’s administration and the executor fails to handle the dispute appropriately, the executor could be personally responsible for any financial loss or legal costs incurred by the estate as a result.
c) Failure to File Tax Returns or Pay Taxes
Personal Liability: If an executor fails to file the deceased’s final tax return or does not pay outstanding taxes, they may be personally liable to the tax authorities for the unpaid taxes, plus any penalties and interest.
Example: If an executor neglects to report income or capital gains from the deceased’s estate, and taxes are owed, the ATO can hold the executor personally responsible for the payment of those taxes, penalties, and interest.
An executor must act with care, ensuring that all legal requirements are met before distributing assets, or they risk being personally responsible for any financial loss, penalties, or legal costs resulting from their actions. Consult with a legal professional to understand the implications of debts and claims on the estate and to ensure compliance with legal obligations.
d) Improper Distribution of Estate Assets
Personal Liability: Executors must ensure that assets are distributed only after debts and liabilities are settled. If they distribute assets too early or to the wrong individuals, they may be held personally liable for any losses.
Example: If an executor distributes funds to beneficiaries before debts are settled, and creditors later seek payment, the executor may be required to return the distributed funds out of their own pocket to pay those creditors.
An executor must exercise due diligence, ensuring that all legal requirements are fulfilled prior to asset distribution. Failing to do so may result in personal liability for any financial losses, penalties, or legal costs arising from their actions.
5. Not Seeking Legal Advice When Things Get Complicated
The risks of not seeking legal advice during probate in NSW are significant and can have both short-term and long-term consequences. Executors who act without guidance risk making procedural errors, mismanaging estate assets, and failing to meet legal obligations, all of which can lead to personal liability or financial loss.
Legal advice provides the executor with the tools and knowledge needed to navigate complex probate processes, resolve disputes, minimize taxes, and ensure that the deceased’s wishes are respected and honoured.
By consulting with a lawyer, the executor not only protects themselves from personal liability but also ensures that the estate is administered efficiently, reducing the risk of complications and legal challenges.
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It is wise to speak with a lawyer early in the process, even if just for an initial consultation. At Sydney City Legal Practice we can help you navigate the complexities and avoid potential pitfalls, ultimately saving you time and stress.
Being an executor is a significant responsibility, and navigating the probate process in NSW requires careful attention to detail and adherence to legal protocols. By avoiding these common mistakes and seeking the right advice, you can ensure a smoother process for all parties involved, allowing you to fulfill your duties effectively and with confidence. Contact us today for a free consultation on 0437 822 808 or submit an online enquiry here.
Author: Carolina Reveco, Principal of Sydney City Legal Practice
This article is to serve as a general information source only. This publication contains opinions, examples, words, and extracts from legislation and other sources; it should not be used as a source of legal, financial or tax advice. To obtain personalised legal advice tailored to your needs that can be relied upon, please reach out and speak to our legal team.
