What are deceased estates?

Table of content

• Who Manages the Deceased Estate?
• How to Open an Estate Bank Account in Australia?
• How to Close a Bank Account When Someone Dies?
• What Happens If The Debts Cannot Be Discharged?
• Who Inherits if no Will in Queensland?
• Can you Dispute an Estate Distribution where there is No Will?
• How Long Does an Executor Have to Settle an Estate in Queensland?
• What if the Original Will of the Deceased is held by a Different Law Firm?
• What if I’ve Lost the Original Will?
• What is Safe Custody?
• What are the Requirements for a Valid Will in QLD?

Coping with the loss of a close friend or family member is never a simple task, and navigating the management of their estate is a reality that many of us might encounter eventually. Acquiring some understanding of this process ahead of time could potentially alleviate some of the associated burdens.

Upon an individual’s passing, their possessions and obligations collectively constitute their estate. These possessions encompass valuable assets like property, automobiles, investments, and shares. Even domestic pets are regarded as assets within a deceased estate for distribution purposes.

The estate of a deceased person encompasses all the assets and debts they possessed at the time of their demise.

Assets may encompass:

• Bank accounts
• Investment holdings
• Superannuation and life insurance policies
• Real estate, including nursing home bonds or retirement village leases
• Personal items like furniture and jewelry

Liabilities might involve mortgages, credit card debts, and personal loans. Ordinarily, these obligations are settled using estate assets prior to the distribution of assets to the beneficiaries.

The article below provides answers to the main questions related to the deceased estate.

Who Manages the Deceased Estate?

A will should designate one or more executors who will assume the role of managing the deceased individual’s estate. The person or persons to take on this responsibility will be indicated in the deceased person’s will if such a document exists.

The legal personal representative ensures that the final wishes of the deceased are carried out. Some of the tasks falling under their purview include:

• Arranging the funeral
• Securing a death certificate
• Initiating the probate or letters of the administration process
• Settling debts and addressing income tax matters in compliance with regional regulations
• Informing relevant bodies, such as the Australian Taxation Office (ATO) and other governmental entities

As a general practice, an executor is responsible for settling all the outstanding debts of the deceased before proceeding with the distribution of assets to beneficiaries listed in the will. It’s important to note that there’s an exception to this practice: the superannuation death benefits and life insurance funds of the deceased cannot be utilized to settle the debts of the estate. All other assets of the deceased estate are at the disposal of the executor for the purpose of debt settlement, irrespective of the will’s instructions concerning the allocation of specific assets. Consequently, an executor lacks the authority, for example, to bestow a mortgage-free property to a beneficiary if other debts within the estate necessitate the property’s sale for debt clearance.

It’s vital to grasp that wills are instruments exclusively concerned with the allocation of property. While parents often include guidance in their wills regarding the guardianship of minor children, these instructions hold no legally binding status and essentially convey the deceased’s preferences in a convenient manner.

In the absence of a valid will, an individual is deemed to have died intestate, triggering a complex, lengthy, and potentially costly process of estate distribution as dictated by the law. Without a designated executor in a will, the deceased loses the capacity to determine who will shoulder the responsibility of managing their estate after their passing.

How to Open an Estate Bank Account in Australia?

A deceased estate bank account can be established at any banking institution. All Executors/Administrators/next of kin are required to personally visit their chosen branch with the official Death Certificate and Will (if applicable), and inform the staff about their intention to open an ‘Estate of’ account.

In order to initiate the account opening process, the executor should:

• Present formal confirmation of the individual’s passing, which can take the form of a death certificate.
• Validate their identity through documents like a Passport or Driver’s License.
• Validate their current address.
• Possess an original or validated copy of the Will, Letters of Administration, or Grant of Probate (Additional details regarding Grant of Probate and Letters of Administration can be found here).

It is advisable to consult with your bank to ascertain whether there are any specific prerequisites in place.

How to Close a Bank Account When Someone Dies?

When a close friend or family member passes away, a multitude of tasks may fall upon you to resolve, and one of them could be the closure of their bank accounts, including checking, savings, and CDs. This is especially relevant when these funds are required for covering funeral costs or settling the deceased person’s outstanding debts. Although the process of closing a bank account under these circumstances isn’t always straightforward, having the appropriate documentation can make it manageable.

To close a bank account on behalf of a deceased individual, you must possess the legal authority to manage the account. For instance, are you a joint account holder? Alternatively, have you obtained authorization from a court or judge, backed by the necessary paperwork (such as a detailed Letter of Testamentary, further elaborated below), that validates your right to access the account? Presented below is an outline of the documentation you will require to close a bank account after the passing of a loved one.

• Essential Identification & Documentation:
• A valid form of identification, such as a state-issued driver’s license or ID card, U.S. passport, or military ID.
• Proof of the individual’s demise, such as officially certified copies of the death certificate.
• Documentation relating to the account and its holder, including the full legal name, Social Security number, and account number of the deceased.
• Proof of Authorization to Act on Behalf of the Estate:

You’ll also need to provide evidence demonstrating your authorization to act on behalf of the estate. The particular documentation necessary hinges on your legal connection to the deceased, as exemplified in the scenarios below.

1. If you are a joint account holder: If you share joint ownership of the account, the process of closing the account is typically straightforward. This is because most banks establish joint accounts with Rights of Survivorship (JWROS), meaning that upon one co-owner’s passing, the other becomes the sole proprietor of the account.
2. If you hold power of attorney: Power of Attorney (POA) bestows temporary or permanent legal authority upon an individual to make decisions on behalf of another adult, often utilized for an aging parent or loved one. Nonetheless, a POA cannot be employed to close a bank account after the principal (the person granting authority) passes away, as a POA ceases upon the principal’s death. To manage financial matters posthumously, the person named in the Power of Attorney document will either need to be designated as the estate’s executor or petition to become the estate’s administrator.
3. If you are the trustee of the deceased: If your loved one established a living trust, the checking account may be registered under the trust’s name. Should you be named as the successor trustee (responsible for the trust after the original trustee’s death), you ought to inform the bank of the initial trustee’s passing. You will also be required to present a certified copy of the death certificate. Furthermore, the bank will need to see a copy of the Certificate of Trust designating the successor trustee, and there will be forms to complete.
4. If you are the executor: Closing single-holder accounts can be more intricate compared to joint accounts or those established under a trust’s name. Legally, only the account owner possesses the right to access the funds, even after death. A court order is necessary to authorize someone else to withdraw money and close the account. If you are designated as the executor in the deceased individual’s will, you must furnish evidence of your executor status and provide a certified copy of the death certificate for the bank to grant access to the account.
5. Sometimes, a bank might set up a checking account as Payable-on-death (POD). In this case, the account owner designates a beneficiary who inherits the account’s funds upon their death. While the beneficiary cannot access the account during the owner’s lifetime, they assume ownership upon the owner’s demise. In such instances, a visit to the bank with valid identification and a certified copy of the death certificate should suffice. This will grant you access to the account and enable you to withdraw the funds as needed.

If a will is absent or the designated person to handle the estate isn’t specified in the will, you must seek permission from the probate court to initiate the account closure. In cases where a will is available yet lacks a named executor, the court will issue a document known as a Letter of Testamentary. However, when no will is present, the court will provide what is known as a Letter of Administration.

What Happens If The Debts Cannot Be Discharged?

In cases where the estate lacks sufficient assets to cover the debts owed at the time of the individual’s passing, the executor will follow either bankruptcy regulations or the provisions applicable to insolvent estates to address these debts. Thankfully, unless a family member had taken on roles such as a guarantor, co-owner, or joint borrower, they are not obligated to assume the responsibility of repaying the debts left by the deceased.

The guidelines established for bankruptcy and insolvency estates prioritize several aspects. First and foremost, funeral expenses, testamentary costs, and administrative fees take precedence. Subsequently, the executor addresses both current and past tax debts, irrespective of any directives outlined in the deceased’s will. Following this, secured debts like home or car loans are cleared. The estate also gives priority to resolving overdue child support payments and making arrangements for ongoing child support obligations in cases involving dependent children. In the event of an outstanding HECS-HELP education debt at the time of death, the remaining balance of the debt is extinguished.

If the estate is insolvent, it’s unsecured debts (those debts that remain after expenses for funerals, expenses for wills, etc.) that are most likely to remain unpaid. This situation can be particularly complex when family members have extended significant unsecured loans for endeavors such as home purchases or business investments. This underscores the importance of formalizing and registering family loans against the appropriate security, addressing one of the numerous reasons for doing so.

Who Inherits if No Will in Queensland?

When an