What Is A Deceased Estate in Canberra?
When someone passes away in Canberra, the majority of the deceased’s assets and liabilities are left in what is called a “deceased estate”. This can include a variety of assets and some of the deceased’s surviving debts, such as secured debts and tax obligations. The personal representative of the deceased manages the deceased estate in Canberra in accordance with any valid testamentary instructions and the Administration and Probate Act 1929 (ACT). This article further expands on the nature of deceased estates in Canberra.
What is a deceased estate?
A deceased estate in Canberra is composed of the majority of the deceased’s assets, including:
- cash in bank accounts;
- real estate;
- vehicles (eg. cars, boats, recreational vehicles);
- investments and share portfolios;
- personal and household possessions; and
- pets and livestock.
While most people know that a deceased estate includes assets, it is less well known that a deceased estate also includes some of the debts of the deceased. Typically, a personal representative will discharge the debts of the deceased estate before distributing any of the remaining property according to the testator’s wishes or intestacy law in Canberra. If there are more liabilities than available cash to pay for the debts, then the personal representative is empowered to sell these assets to satisfy the creditors of the estate, regardless of whether or not these assets were the subject of a specific bequest.
What is not included in a deceased estate in Canberra?
A testator will often have arrangements in place so that certain assets transfer automatically to another person upon their death, and are never included in the deceased estate.
For instance, a testator can usually make a binding nomination for superannuation funds or an insurance payout, thereby ensuring that their chosen beneficiary receives the benefit without delay. Also, any bank accounts or property that the testator owns in joint tenancy with another person becomes the sole possession of the surviving co-owner. This is a common circumstance for spouses who own a family home together as joint tenants. A joint tenancy provides continuity of ownership of the home after the death of one of the joint tenants, and avoids complications for the surviving spouse after their partner’s death. The same conditions apply when two people are joint owners of a bank account, with the survivor taking full ownership of the account upon the death of the co-owner.
Some categories of a deceased’s debts are not included in a deceased estate in Canberra. For instance, if the deceased has a HECS-HELP account outstanding, the debt is extinguished when the deceased passes away (apart from any annual payment due for the current year). This is in contrast to other debts to the Commonwealth and State governments, such as unpaid income tax, which must be paid from the deceased estate. In addition, any child support debt is considered a priority debt to be discharged before the distribution of assets to beneficiaries.
Who administers a deceased estate in Canberra?
In Canberra, a personal representative (executor or administrator) is tasked with administering a deceased estate. When a testator dies and leaves behind a valid will, he or she typically appoints an executor in the document to administer the deceased estate and follow the wishes expressed in the will. Often the executor will apply to the Supreme Court for a Grant of Probate to verify the legitimacy of the will and their legal authority to handle the deceased estate in Canberra.
If there is no available executor, an appropriate applicant can ask the Supreme Court for Letters of Administration With Will. This probate grant authorises the applicant to act as administrator of the deceased estate. Similarly, if the deceased died without making a will, a qualified person can apply for Letters of Administration No Will to manage the deceased estate according to intestacy law. In fact, if there is no other suitable administrator, even a creditor can obtain permission from the court to administer a deceased estate in Canberra.
The personal representative is responsible for gathering together the assets of the deceased estate and arranging the payment of any outstanding debts before distributing the remaining assets to the rightful beneficiaries.
A deceased estate is typically a temporary entity that exists only from the deceased’s date of death until the assets are given to the new owners. The personal representative does have a duty to discharge their administration of the deceased estate without excessive delay. However, the deceased estate will exist for as long as necessary. On occasion, a deceased estate will endure for years to support a long-term testamentary arrangement, such as a discretionary trust for a vulnerable or minor beneficiary.
As administrator or executor, you may be feeling overwhelmed at the prospect of handling the administrative tasks ahead. If you have more questions about what constitutes a deceased estate in Canberra, or any other aspect of probate or administration, please do not hesitate to contact our office. Our team is particularly well equipped to advise on litigation relating to deceased estates in Canberra.