Once Probate or Letters of Administration has been granted (or if it was not needed), and a Notice of Intended Distribution has been published, the executor or administrator (or next of kin) can distribute the estate after paying the deceased's debts.
If an executor or administrator fails to administer the estate properly, they may be personally liable to repay or compensate the estate.
You will need to see a private lawyer to transfer a house, unit, land or commercial property.
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Time limits
A legacy (gift of money) must be distributed within 12 months otherwise the beneficiary can claim interest.
If you are an executor or administrator, you have a duty to protect the estate and to 'call in' (collect) the assets owned by the deceased.
An executor or administrator must act in good faith, with due care and diligence. Before the estate is distributed according to the will or the rules of intestacy, the executor or administrator holds the estate as a 'trustee' for the beneficiaries. This means that the executor or administrator must deal with the estate responsibly, carefully and in a timely manner and must not mix the estate property with their own property.
If you are an executor or administrator, you will need to pay any debts that the deceased owed from the estate, such as unpaid accounts and tax returns.
You should get advice from an accountant to see whether you need to lodge a final tax return for the deceased. You may need to lodge a final tax return if the deceased received income from employment or owned investments at the time of death.
The deceased's debts need to be paid before anything is distributed to the beneficiaries.
The executor or administrator may choose to publish a notice on the NSW Online Registry before any part of an estate is distributed to beneficiaries. This is called a 'Notice of Intended Distribution'. This notice gives 30 days for creditors to make a claim on the estate. It is not mandatory for an executor or administrator to publish the notice, however, in some circumstances the notice may provide the executor or administrator with some protection from personal liability, if there are future claims from creditors.
The notice can be published through the NSW Online Registry.
There are fees to publish a notice. If you do not have access to the internet or if you do not own a credit card, you may file the form and pay the fee at the Supreme Court registry in person or by post.
You can get a copy of the form:
- at the Supreme Court of NSW registry, or
- on the UCPR website.
Sample: Notice of Intended Distribution
For more information on how to publish a notice of intended distribution through the NSW Online Registry, see Notice of intended distribution of an estate on the Supreme Court of NSW website.
If Probate or Letters of Administration is not needed in your circumstances, you will be able to distribute the estate after you pay the debts of the deceased.
The estate must be distributed according to the will of the deceased or the rules of intestacy, if the deceased had no will.
There are rules that you will need to follow to transfer certain types of property. For more information, see Transferring personal property and Transferring real property below.
After the grant of Probate or Letters of Administration is made by the Court the executor or administrator can start to distribute the estate. The estate should not be distributed until at least six months after the date of death. This allows time for any claims against the estate.
Before distributing the estate, the executor or administrator may publish a Notice of Intended Distribution and pay the debts of the deceased.
In some cases, the executor or administrator can make an interim distribution to a beneficiary. However, there are risks to making early distributions if there is a claim against the estate.
Personal property includes items like household furniture and goods, jewellery, cars, boats and trailers.
The personal property of the deceased can be dealt with in a will as part of the 'whole' estate, as specific gifts to named beneficiaries or as part of the 'remainder' (or 'residue'). If there is no will, the personal property is dealt with according to the rules of intestacy.
The 'remainder' of the estate is all property that is not specifically given to a beneficiary. Every will should contain a residuary clause which states which beneficiary is entitled to the remainder. If there is no such clause, the remainder of the estate is distributed according to the rules of intestacy.
If more than one beneficiary is entitled to the remainder of the estate, those beneficiaries should discuss and try and reach an agreement about who will get certain items of personal property. If the beneficiaries can’t reach an agreement, they should consider going to mediation at a Community Justice Centre (CJC).
Real property includes land, houses, units, commercial and industrial property.
Real property can’t be transferred if there is a mortgage registered on the title, unless the mortgage is either repaid or refinanced.
If the deceased owned property as joint tenants with another person, the ownership will pass to the surviving joint tenant regardless of their relationship to the deceased. A private lawyer can transfer the property to the surviving joint tenant for a fee.
If the deceased owned property in his or her own name or as tenants-in-common with another person, you will need to apply for Probate or Letters of Administration before you can distribute the estate. You will then need to go to a private lawyer to transfer the property to the beneficiaries. The lawyer will charge you a fee to do this.
Where the executor has not paid the legacy to the beneficiary within 12 months from the date of death, the beneficiary is entitled to claim interest until the legacy is received. The interest is calculated according to the relevant rate of interest which is 2% above the cash rate last published by the Reserve Bank of Australia before 1 January in the calendar year in which interest begins to add.
For more information about the current interest rate, see the Reserve Bank of Australia website.
Where the legacy is paid to a beneficiary living outside of Australia, the beneficiary is responsible for paying any tax or fees for transferring the money into their account.
The executor or personal representative should obtain a written receipt from the beneficiary to confirm that the legacy has been paid. It is also a good idea to provide the beneficiaries with a copy of the financial records and ask them to provide a receipt to acknowledge payment.
An executor or administrator is responsible for keeping proper records of all receipts, expenses and assets that have been transferred to the beneficiaries.
The executor or administrator must verify and file accounts in an estate where:
- the executor or administrator is claiming commission from the estate
- the beneficiary requests it, or
- the court requires the filing of accounts.
If an executor or administrator is required to file accounts they must be verified by a supporting affidavit which provides details of all assets transferred to the beneficiaries and receipts of all payments and expenses.
You should open up a new bank account in the name of the estate to keep a proper record of how the money has been distributed to the beneficiaries.
An executor or administrator is entitled to claim commission from the estate for their time and effort in dealing with the estate. An executor can either reach an agreement with all the beneficiaries or apply to the Supreme Court for commission to be paid out of the estate. The Court will consider the circumstances of the case before allowing commission to be paid. The amount of commission may be calculated as a lump sum amount or percentage.
An executor can’t claim commission if they are also named as a beneficiary in the will unless the will specifically entitles the executor to claim commission in addition to their share.
If you are required to file accounts, or you want to apply for commission, you should get legal advice from a private lawyer. Failing to file accounts may result in the executor or administrator being fined or charged with contempt of court.
For more information, see Applying to have Accounts Passed and Applying for Commission on the Supreme Court of NSW website.
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