Jill was shocked when her stepfather John died and did not leave anything to her in his will. She was not particularly close to John but she did grow up with him when her biological father split from her mother when she was 10 years old. She thought of him as part of her family. Her stepfather had 2 kids from his earlier marriage. Jill did not know much about her mother’s financial affairs but vaguely recalls that when her biological dad and mum split, her mum received about $200,000. Her mum used that money to buy a house with her stepfather. John had also contributed his own savings to buy the house. That house was now worth $800,000 and John had left the house to his own biological children. Jill is upset that she had been left out of John’s will and wants to know whether she has any claim against her stepfather’s deceased estate.

In the past 30 years or so, blended families in Australia have become more commonplace in both married and de facto relationships. Many stepchildren now face circumstances where their biological parent had passed away before the stepparent and later not receiving anything out of their stepparent’s estate.

The good news for stepchildren is that in 2011 the law in Western Australia was changed to permit stepchildren to make a claim against the deceased estate of a stepparent. The catch is that there are only limited circumstances where a stepchild can make this claim.

Other states and territories in Australia also have laws to permit such claims with each have different criteria which the stepchild must meet to make a claim.

In this article, a reference to a “stepchild’s parent” means the stepchild’s biological parent.

Many beneficiaries named in a will or who are entitled to the deceased estate under intestacy laws are often surprised to learn that assets which were apparently owned by the deceased does not in fact fall within the deceased estate. Instead, another person may be entitled to the asset.

The first question an executor or administrator needs to determine is whether the asset held by the deceased falls under the deceased estate.

If it does, then the assets are to be distributed to the beneficiaries under the will or to the beneficiaries entitled under the law if the deceased did not have a will. These assets and their respective values are to be recorded in the “List of Assets and Liabilities” of the deceased in the application for probate or letters of administration filed in court.

If it does not fall within the deceased estate, then the asset and the manner of holding of the asset by the deceased must be carefully scrutinised to determine how and to whom the asset is to be distributed. These assets are not recorded in the list of assets and liabilities filed in the application for probate or letters of administration.

In some cases, it is clear cut that the asset falls under the deceased estate such as when the deceased was the sole owner of real estate or bank accounts. In others, it could go either way depending on the decisions made by the deceased during his or her lifetime or the terms contained in agreements or deeds entered into by the deceased prior to his or her death.

Over the years, Robertson Hayles Lawyers has encountered many complex deceased estates. This involved tracing of the rightful beneficiaries of the estate in multiple jurisdictions and taking appropriate court action to deal with the estate in a timely and cost-efficient manner.

This involvement has been satisfying as we have assisted many beneficiaries from Australia and overseas in complex deceased estates to reach a resolution after years of the estate being in limbo.

Recently, Robertson Hayles Lawyers had the privilege to resolve a historical deceased estate where the deceased died nearly a century ago. In this case, the original executors of the deceased’s last will had obtained probate and distributed the deceased’s estate to his wife and children in the 1920s. However, the original executors overlooked a sliver of land which the deceased owned in Perth. The deceased’s ownership of the land remained unnoticed for nearly 100 years to around 2018 when a developer requiring an adjoining land for development discovered that this land belonged to a deceased who passed away in 1922. The developer managed to contact a descendant of the deceased. We were then instructed to act for the estate. This required us to trace the descendants of the deceased over a 100-year period to determine the descendants with legal standing to apply for probate and the rightful beneficiaries and their respective share of the estate. Hours were spent on researching records at the birth, deaths and marriage registry, court probate records, electoral roll records, historical records held by the State Records Office, family trees on various websites and interviewing the living descendants of the deceased. Finally, 24 descendants of the deceased were identified as beneficiaries of the estate. It was satisfying to resolve the estate and distribute the balance of the estate to the deceased’s rightful beneficiaries.

From time to time, families, local councils, property owners or developers, accountants and financial advisors may need assistance to deal with an unresolved historical deceased estate when land or other assets held by the deceased come to light. Often these assets must be dealt with quickly. For example, land required for development or when the assets have to be sold to preserve its value.

Isaac Stern, an American was one of the world’s greatest violinists of the 20th century. When Stern died aged 81 years in 2001, the executor appointed under his Will auctioned off his legacy intended for his children including autographed photographs, violins and his music collection allegedly to pay off estate debts. Stern’s children sued the executor alleging that the executor had wrongly excluded their father’s apartment from the estate and paid himself thousands of dollars leaving the estate unable to pay off the musician’s debts. The Probate Court in the USA found that the selling of Stern’s legacy caused his children to suffer “incalculable personal loss”. The Court also ruled that the executor had to pay back to the estate $313,000 which the executor had paid to himself stating that this payment from the estate was “outrageous, improper and unjustified”.

The example of the estate of Isaac Stern above highlights the importance of the proper management of a deceased estate. Serious financial and emotional ramifications may be caused to the family members of the deceased if the estate is not managed properly and in accordance with the law. This may result in the executor or administrator of the estate facing personal liability.

The Law

A person may pass away with a Will or without a Will.

When a person dies with a Will, the “executor” is the person appointed under the Will to administer the estate. The executor applies to the Court for a “grant of probate”. When the grant is issued, the executor has the authority to deal with the estate of the deceased.

The beneficiaries may wish to replace the executor of the estate as they believe that the executor is not acting in their best interests. However, the removal of the executor is not a simply a case of the beneficiaries acting unanimously and replacing the executor. Instead, an application must be made to the Supreme Court. Case law has shown that except in cases of clear cut serious misconduct or dishonesty, a court will be slow to revoke a grant of probate issued to the executor as the deceased had appointed that executor and the court does not wish to usurp the intention of the deceased. In many situations, the facts are contentious and the beneficiaries may not have sufficient evidence to pinpoint the executor’s misconduct or dishonesty. Finally, commencing and maintaining legal action in the Supreme Court is a costly exercise and can also be emotionally taxing.

Hence, when beneficiaries believe that the executor is not acting in their best interests, the beneficiaries ought to explore other means as their first step to resolving the issue such as:-

• Writing to the executor to seek more information and to put on record their concerns so that the executor takes into account these concerns in the administration of the deceased estate.
• Enter into mediation with the executor and reach agreement on the future steps in the administration of the deceased estate.
• The beneficiaries and the executor agree by consent to the removal of the executor and the appointment of another party to administer the deceased estate. Although an application to the court is still required and the court must approve the change, an agreement reached means the application is not contentious. This will take less time to achieve and legal costs will be much lower compared to contentious probate proceedings.
• Make an application for specific orders in relation to the executor’s administration of the deceased estate. For example, apply for court orders for the property of the deceased estate to be sold at its market value if there is concern that the executor may sell the property below its market value.
• Apply to the court for the executor to pass the accounts of the deceased estate. The purpose of this application is for the court to carry out an audit of the monies collected and spent in the deceased estate to determine their accuracy and appropriateness. However, the passing of accounts cannot venture into issues of misconduct or conflict of interest involving the executor. If these issues come to light in the passing of the accounts, then the beneficiary must commence proceedings against the executor if the beneficiary wishes to pursue the matter.

A checklist for the Intended Executor and Administrator of a Deceased Estate

When a person dies with a Will, the executor named in the Will is expected to apply to the Supreme Court for a grant of probate so that the executor has the authority to deal with the assets of the deceased. Similarly, when a person dies without a will, a beneficiary of the estate would be expected to apply for letters of administration and be appointed the administrator of the estate and thus have the authority to deal with the assets of the estate. While this is usually required, there may be situations where there is no requirement to apply for a grant of probate or letters of administration.

Whether a grant is needed depends on the composition of the estate. An executor or the intended administrator should seek legal advice before making an application to the Supreme Court for a grant; in certain circumstances, the estate may not need a grant so you can avoid incurring the cost of the application. In Robertson Hayles Lawyers, we offer an initial consultation at a fixed fee. You will be able to obtain advice from an experienced lawyer about whether a grant is required and what the next steps to take in distributing the assets to the beneficiaries.

When making an appointment with a lawyer, the first thing to do is make a list of the estate’s assets so that the lawyer can review the estate’s composition and determine whether a grant is required. Here is a checklist to consider when making the list: –

When a person dies, what must be done before the assets can be distributed to the beneficiaries?

 If the deceased left a will, the executor named in the will must make an application to the Supreme Court for a grant of probate. When probate is issued, the executor has the power to collect the assets of the estate. Thereafter, the executor pays the liabilities of the estate including any tax payable. The net assets are then distributed to the beneficiaries named in the will.

If the deceased did not leave a will, the deceased is said to have died “intestate” and the beneficiaries are determined by law. A beneficiary then makes an application for letters of administration where the beneficiary is appointed the administrator of the estate. Once issued, the administrator has the power to collect the assets of the estate. The liabilities are then paid, and the net assets distributed to the beneficiaries.

If the deceased left a will, must all wills go through probate in Australia? What if the deceased did not leave a will, must all deceased estates without a will obtain letters of administration?

The short answer is that it depends on the nature of the assets left behind by the deceased.

The grant of probate or letters of administration must be obtained if the deceased’s estate has assets to be collected for distribution to the beneficiaries. For example: –

When a person dies without a Will, the deceased is said to have died “intestacy”. As the deceased did not make a will and choose the beneficiaries of the estate, the beneficiaries are determined by law. A beneficiary of the estate is entitled to apply to the Supreme Court for a “grant of letters of administration” and to be appointed the administrator of the estate.

When the letters of administration are issued, the assets of the deceased are vested in the administrator. This gives the administrator the authority to collect the assets of the deceased for distribution to the beneficiaries.

Section 14 of the Administration Act 1903 (WA) sets out the entitlements of family members in intestate estates.

When applying for a grant of letters of administration, the intended administrator should take the following steps:-

1. Search for a Will of the deceased as the Court will not issue a grant of letters of administration unless the intended administrator shows that a thorough search had been carried out but no Will had been found. Make enquiries with family members and with the deceased’s financial planner, solicitor or accountant to find out if a Will exists.

He was not my mum’s de facto partner; he slept on the couch! Indicators to determine whether parties are in a de facto relationship in estate disputes.

More middle-aged and older Australians re-partner in later life, setting up increasing disputes between the children of an earlier relationship and the de facto partner as each battle for a share of the deceased partner’s estate.

In a deceased estate matter in the Supreme Court of Western Australia, the children of the deceased and the de facto partner were locked in dispute. The de facto partner alleged he was in a de facto relationship with the deceased and entitled to make a claim against the deceased estate. The children disputed this claim. During the hearing, the claimant alleged he shared a bedroom with the deceased while a witness alleged that he had slept on the couch. The Supreme Court rejected the witness’s evidence stating that the claimant would not have slept on a couch in the deceased’s home for 13 years when he had his own property. Sleeping and living arrangements form one but not the sole determinative factor in determining whether the parties were in a de facto relationship.

De Facto Partners and Claims to a Deceased Estate

We will explore the criteria to determine a de facto relationship but first, note that whether parties were in a de facto relationship is important for 2 reasons: –

I have been waiting ages for my share of the estate.  How long does an executor have to settle an estate in Australia?

The law does not fix a determinate time by which an executor of a deceased estate must distribute the estate to the beneficiaries, failing which the executor will be in breach of his or her duty and face damages or penalties.

There is however a general principle under the common law that the executor ought to complete the administration of the estate within a year of the deceased’s death. This is referred to as the “executor’s year”. It is not a hard and fast rule. If the executor has taken more than a year to distribute the estate, the question is whether the executor has unreasonably delayed the administration of the estate. To determine this, all the circumstances of the case must be considered.

The executor’s year is a guide with the overriding principle being that the executor must not have caused unwarranted delay in the administration of the deceased’s estate.

Before an estate can be distributed, there are many steps for the executor to take which will impact on the time required to complete the administration of the estate, including the following: –

• Issuance of the death certificate;
• Obtaining the original will of deceased.
• Determining the nature and value of the assets and liabilities of the deceased.
• Applying to the Supreme Court for the Grant of Probate to be issued.
• Once probate has been issued, the executor has the power to collect the assets of the deceased such as bank deposits, the refundable accommodation deposit (if the deceased was in aged care) )and investments. The executor also has the power to sell property, stocks and shares and any other asset of the deceased.
• When the deceased’s assets have been collected, the executor must pay the creditors of the estate such as funeral expenses, outstanding loans, and other debts of the deceased.
• Tax returns must be prepared and filed with the Australian Taxation Office relating to the deceased and the estate and such taxes, if any must be paid.
• It may also be prudent to place a notice in the newspapers advising of the death of the deceased and calling for creditors to lodge their claims with the executor within 28 days. This time period must be completed to determine whether there are any debts to be paid.
• The executor is then in a position to commence distribution of the estate to the beneficiaries.

A snapshot of family provision claims and the court’s power to alter the will made by the deceased

We sometimes read or hear of court cases where the court has allowed a claim made by a family member who has been left out of the last will made by the deceased. What does this mean? How is it possible that the court can interfere with the wishes of the deceased and alter the terms of the will? Who can challenge the will and make a claim for a share of the estate?

Normally, the court will not alter the gifts or terms of the will by the deceased. However, in all Australian states and territories, pursuant to legislation passed by parliament, the court has the power to alter the terms of the will and award a share of the estate to a family member who has been left out of the will. The court can also increase the share made to a family member under the will.  The court’s power to alter the terms of the will is however limited to claims made by only certain family members and only to circumstances where the deceased had failed to make provision for that family member’s future well-being. This type of claim is often referred to as a family provision claim.

The first step is an objective criterion. Does the claimant fall within the category of person entitled to make a family provision claim? In Western Australia, under section 7 of the Family Provision Act 1972 (WA), only the following persons are entitled to make this claim: –

What cheek! My brother has not spoken to our mum for 15 years and he now wants a share of her estate. Estrangement and the law on family provision.

It is a cultural tradition that parents leave their assets to their children upon their passing. At the same time, there is a strong community expectation that parents should retain the right not to leave their assets to children who are estranged from them.

The law seeks to resolve these countervailing expectations in a fair and just manner in relation to claims made by children who were estranged from their deceased parent and have been left out of the will.

“Estrangement” describes the condition where two parties are no longer in a friendly or affectionate relationship as a result of the attitudes or conduct of one or both parties.

There is no rule of law that a child is not entitled to make a claim for provision if he, or she, has been estranged from the deceased parent. However, under Section 6(3) of the Family Provision Act 1972, the Court may refuse to make an order for provision out of a deceased estate in favour of any person on the ground that his character or conduct is such as in the opinion of the Court to disentitle him to the benefit of an order, or on any other ground which the Court thinks sufficient.

Hence, the question is whether the applicant’s character or conduct leading to and during the estrangement is such that it disentitles the applicant to the benefit of a court order for provision out of the estate. Each case must be assessed on its own facts with the primary consideration being the nature of the estrangement and the underlying reason for it. The following cases illustrate this principle: –