Deceased Estates - when is a Grant of Representation required?
by Lachlan Vallance
WHEN A person dies in Victoria, it is necessary to ensure that his or her affairs are wound up as the deceased is unable to continue to hold property such as bank accounts, shares, real estate, cash or furniture. Superannuation must be paid to beneficiaries, employment must be terminated and pension payments ceased.
It is the role of the Executor of the person's Will, where one has been made, to deal with the deceased person's estate. This includes:
- ascertaining the assets of the deceased;
- paying any debts, funeral and other expenses; and
- making distributions to beneficiaries.
In order to carry out these duties a Grant of Representation may be required depending on the nature and extent of the assets left by the deceased. If an Executor or Administrator is required to prove title to assets in the name of the deceased, the production of the Grant will be needed. If the deceased owned real estate, the Registrar of Titles will require a Grant. If, however, all assets of the deceased are held in joint names a Grant will not be required as the joint assets automatically pass to the survivor.
In some circumstances estates are administered informally without a Grant. Some organisations such as insurance companies and banks may release money without a Grant if the amount held in the name of the deceased is nominal and there are no complications.
Grants of Representation
A Grant of Representation is a document issued under the seal of the Court which enables those named as Executors or Administrators to deal with the assets of the deceased. It allows funds of the deceased held in banks, managed funds, etc., to be collected, property to be sold or transferred and debts to be finalised. The Grant provides proof that the named person is empowered to handle the estate of the deceased.
There are four types of Grants of Representation issued by the Court:
- Probate - the process of officially proving the validity of a Will as the last Will of the deceased. Probate is granted where the deceased's last Will is proved by one or more Executors named in the Will.
- Letters of Administration with the Will annexed – is granted where the deceased has left a valid Will but the named Executor cannot or will not apply for a Grant. The person with the greatest proprietary interest under the Will, or where there are several persons equally entitled to a Grant, the person first applying, will receive the Grant.
- Letters of Administration – where a person dies without a valid Will the Court issues a Grant of Letters of Administration, usually to the next of kin of the deceased.
- Limited Grant - may be issued where property must be administered urgently and legal proceedings concerning the Will or property of the deceased are pending. Once the original purpose of the Limited Grant has been fulfilled, an applicant may apply for a cessate or Full Grant in the usual manner.
Estate Administration can be a long and protracted task and it is essential that the right advice is sought from skilled legal and accounting advisers.