17 May What is Probate of a will?

What is probate of a will in Victoria?

These are the most common enquiries we receive about Probate:

1. 1. What is Probate?
   2. Do I need a grant of probate?
   3. What happens If I’m the executor and I can’t afford the funeral expenses?
   4. Am I capable of being an executor? What should I do if I’m not?
   5. What if there’s no Will? Can an informal document be accepted?
   6. What if I’m divorced and pass away? Can my ex-partner still contest my will?
   7. Can people excluded from the will make a claim?
   8. Who decides on the funeral arrangements?

Essentially probate is about proving the will is the last valid will, and applying for a grant to deal with the assets.   If there is no will it means applying for administration of the estate based on next of kin.  Proving these things to get the grant is done via the Probate section of the Supreme Court of Victoria.

Types of grant

The types of grant that may be sought include:

1. 1. A grant of probate. Where the deceased has a will appointing an executor who is willing and able to apply for probate.
   2. A grant of letters of administration with the will annexed. Where the deceased has a will but the executor appointed by the will is unwilling or unable to apply for probate.
   3. A grant of letters of administration on an intestacy. Where the deceased does not have a will.
   4. In addition, special grants are available in limited situations, for example, a grant on behalf of an under age executor may be sought.

Is a grant of Probate required?

There is no statutory requirement to obtain a grant unless the estate includes real property. Most banks, financial institutions and share registries will not insist on a grant to release or transfer cash in bank accounts if the amount concerned is relatively small; however, each institution differs and information should be sought at the outset as to whether or not the institution concerned will insist upon a grant. Where a grant is not required, these institutions will normally accept evidence of death, entitlement, and signing of indemnities by the executor named in the will or the persons entitled on intestacy.

Other than for joint tenancy, real estate normally requires a grant of probate.

Joint Tenants on title

Joint tenancies do not form the deceased’s estate to be distributed.  Instead the surviving owner(s) take the deceased’s share.   To effect the registration of the survivor as the registered proprietor generally joint tenancies only require:

• an Application by Surviving Proprietor (s 50 Transfer of Land Act 1958);
• certificate of title; − statutory declaration; and
• notice of acquisition.

In the majority of cases, registration must now be completed electronically eg via PEXA.

A person who becomes a trustee of land in Victoria must lodge a written notice with the Commissioner of State Revenue within one month of their appointment as personal representative; and that a personal representative of a deceased estate that has land in Victoria must lodge a written notice with the State Revenue Office within one month after administration is completed.

There may be state land tax and capital gains tax issues attaching to real estate – see, for example, State Revenue Office Bulletin GEN 4/07 and Revenue Ruling GEN014.  Executors and trustees should obtain professional taxation advice, particularly in respect to capital gains tax and administration trusts.

Distribution without a grant

Executors may well want to protect themselves on a distribution before a grant is made, and an example is a legally binding Deed of Release and Indemnity to be signed by recipient beneficiaries.

Funeral expenses and other creditors

In order to pay a person’s funeral expenses, most banks will allow funds to be withdrawn from the estate in direct payment of funeral expenses before a grant is obtained.

The individual who arranges the funeral is entitled to be reimbursed for any expenses they incur out of the estate, so long as they are not extravagant. Arrangements made should be in keeping with the wishes of the deceased.

Often funeral directors are willing to allow for payment to be deferred until the funds are available following the distribution of the estate.

It is important to remember that the costs for headstones or memorial plaques do not qualify as “funeral expenses” and cannot be reimbursed from the estate funds unless the deceased has made a specific provision in their will allowing for that expense.  The exception is if all the beneficiaries are over 18 and agree.

Other creditors

Other creditors must wait to be paid until the assets of the estate are available to the executor.

Beneficiaries

Attesting witness

It is not advisable to have beneficiaries witness wills in case the will is challenged.  Having said that, an interested witness is not disqualified from taking a benefit under a will. Note that the Registrar of Probates may require additional evidence, depending upon the circumstances. In relation to the draftsperson.

Marriage and divorce

Marriage revokes a will subject to the exceptions set out in s 13 of the Wills Act 1997. The section provides that the following are not revoked by marriage:

(a) a disposition to the person to whom the testator is married at the time of his or her death; or

(b) an appointment as executor, trustee, advisory trustee or guardian of the person to whom the testator is married at the time of his or her death;

(c) a power to exercise, by will, a power of appointment, when, if the testator did not exercise the power, the property so appointed would not pass to the executor or administrator or the State Trustees under section 19 of the Administration and Probate Act 1958 …

A will made in contemplation of a marriage, whether or not that contemplation is expressed in the will, is not revoked by the solemnisation of the marriage, and a will which is expressed to be made in contemplation of marriage generally is not revoked by the marriage of the testator.

Divorce, as defined in s 14(4), avoids dispositions and grants to, or appointment of, a former spouse other than a power of appointment exercisable by the spouse only in favour of the children of both the testator and the spouse. This section does not apply to any disposition, appointment or grant if it appears that the testator did not want the disposition, appointment or grant to be revoked upon the ending of the marriage.

A former spouse or domestic partner of the deceased is an eligible person able to bring a testator family maintenance claim unless precluded by an earlier property settlement. See the Family Provision Claims guide for further information.

Section 79(8) of the Family Law Act 1975 provides that property settlement proceedings on foot at the time of death of a party may be continued by or against the legal personal representative of the deceased party. See the Property Settlement guide for further information.

Stepchildren

Scott-Mackenzie v Bail [2017] VSCA 108 expanded the class of persons in that particular matter eligible to bring a claim against an estate to include children brought into a de facto relationship; see also Trembath v Trembath [2017] VSC 369 decided subsequently in respect to a child brought into a marriage.

Rectification

The court has the power to rectify a will to give effect to the intentions of the deceased. Note that an application is required within six months from the date of the grant of probate.

Right to a copy of the will and the inventory of assets

Often times someone may wish to find out whether they are a beneficiary of a will and s 50 Wills Act 1997 sets out who is entitled to a copy if they request.

With the implementation of the Administration and Probate and Other Acts Amendment (Succession and Related Matters) Act 2017, and consequential amendments to the Powers of Attorney Act 2014, VCAT can compel the production of a will, revoked will or purported will of a deceased person who immediately before their death was a principal under an enduring power of attorney.

Forfeiture rule in cases of murder

The forfeiture rule prevents a person who has unlawfully killed another from inheriting from their victim or acquiring another financial benefit from the death. It is an unwritten rule of public policy enforced by the courts. It has no statutory basis yet overrides the words of a will, entitlements provided in legislation, and legally binding agreements to which the deceased person was a party. See, for example, Edwards v State Trustees Limited [2016] VSCA 28.