ADVISER FACILITATED PROBATE AND ESTATE ADMINISTRATION

Patrick Ellwood, Director, View LegalHannah Whippy, Managing Lawyer, Adviser Solutions

October 2017

What? Why? How?

?

? ?

Overview

How to facilitate

General overview of the probate and estate administration process

Grants and applications required

Explanation of key roles

Common problems and how to avoid them

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Estate Administration processDeath

Last Will located

Executors

Probate Application

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Collect assets >>> Pay debts >>>

Inform beneficiaries

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Ensure all roles of deceased are handed on (eg

directorships, memberships, trusteeship, etc)

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Deal with claims against the estate

bought within statutory time limits

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Tax planning, including formal establishment of any

testamentary trusts established by the will

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Interim Assetdistributions

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Determine net value of estate for final distributions

Death certificate

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Final distribution and lodgement of estate tax returns

Communicate with beneficiaries

Initial administration

Collect cashassets and pay

outstanding debtsSell or transfer

remaining assets

Make distributions according to will

Determine superannuation

entitlementsRegister death on

joint tenancy assets

Taxation matters e.g. lodgement

of tax return

Estate Administration Process

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65 7

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Grant of Representation

ProbateLetters of

administrationon intestacy

Letters ofadministrationwith the will

Grant of representation

AdministratorExecutor

Personal representatives

MAIN TYPES

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There’s a will

No executor able to act

Administrator

There’s a will No will

Executor named Administrator

What should be applied for?

Prerequisites ProbateLetters of

administration with Will

Valid will ✓ ✓

Named executor ✓ ✓

Executor is willing and able to act ✓

Executor is unwilling or unable to act

✓

No challenges ✓ ✓

Beware of notional estate rules ✓ ✓

Documents To Be Submitted

Original death certificate Affidavit

Service/advertising

Original plussigned copy

of will

Formal application by

executor

Key Roles

Executor

Administrator

Guardian (of infants)

Residue Beneficiary

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Beneficiary5

Adviser6

Role of Executor/Administrator

Obligation to advise

beneficiariesof progress

of estate administration

Legal personal representative

of deceasedAdministrative

role

Apply for grant of probate

Collect assets and distribute

pursuant to will

Pay debts

Property transfers

Close bank accounts

Notify authorities

Common Problems

Existing structures

Aliases

Loss of capacity

Missing wills or codicils

Specific or contingent gifts

Family Provision Applications

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Poor planning7

Aliases

Death certificate registered with ‘Pat

Joseph Ellwood’

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In the will of ‘Patrick Joseph Ellwood’

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Grant of representation

(Advertising, Affidavit of executors)

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Case examples

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Titles Office

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Solutions (‘also known as’, checklist)

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Loss of Capacity

There should be no disorder of the mind and no insane delusions in influencing the disposing of the estate.

Lucid intervals

Sound mind, memory and understanding

Requirements of testator

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Comprehend and appreciate the claims to which the will maker ought to give effect.

Requirements of testator

Understand the nature of making a will and its effects.

Understand the extent of the property of which the will maker is disposing.

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Passing away with a valid will

Location ofcurrent valid will

Notice/advertising of

intended application

Applicationlodged

Death certificate

Grant ofprobate issued

…for the grant of probate or letters

of administration to be published and served on the Public

Trustee

…with the courts for the grant of

administration –at least 14 days after the notice

5 days to 6 weeks from the date of

application –depends on the State /

Territory and the complexity of the matter

Specific or contingent gifts

Titles Office requirements

‘Provided she stops collecting cats, I give my royal doulton china with hand painted blue periwinkles to…’

Common issues (Ademption, Equalisation

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Specific or contingent gifts

Case examples

Solutions

– Flexibility vs Certainty

– Powers of appropriation

– ‘Any china I own’

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– Confirmation of executor - contingencies

Using existing structures

‘I leave my Net Estate to the trustee of the Ellwood Trust, a trust established under my late brother John’s will’

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Heritage issues2

Wound up structures3

Tax and duty implications4

Using existing structures (Cont’d)

Solutions6

– Planning: Existing vs new TTs

– Appropriation clause

– Ongoing review of estate plan

Family Provision Applications (FPAs)

Legislatively enacted1

Cannot eliminate the risk2

Successful claim:3

– Step 1: claimant must have standing

– Step 2: claimant must show that they haven’t received adequate provision

Family Provision Applications (FPAs) (Cont’d)

Common Factors:4

– Testators intentions clear

– History of distributions

– Disentitling conduct

– Size of the estate

– Circumstances of the claimant

FPAs

Solutions:1

– Proper planning

– Intentions clear

Timeframes

Distribute estate after expiry of period if no notice received

Protection for executors

12 mths 12 mths 9 mths 6 mths 3 mths

In NT from date of grant

In NSW from date of death

In Qld from date of death

In ACT, SA, Vic & WA from date of grant

In Tas from date of grant

Application for FPA

Poor Planning

Owner of a life insurance policy avoids tax liability

Above issues

Intestacy

Post death structures

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Intestacy

Clients have died without a validwill in place

Different process in each State

Advertising requirements

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Distribution of assets determined by intestacy rules

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Post death testamentary trusts

When assets must pass

Superannuation proceeds

Insurance proceeds

Stamp duty implications

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Excepted trust income to extent of entitlement in the event of intestacy

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Is the beneficiary ‘presently entitled'?6

Adviser’s Role

Preparation of an asset registerof the estate1

Location of and distribution of assetswithin the estate2

Explain deceased and current investment strategy3

Probate4

Investment advice for beneficiaries5

Your Role In The Administration Process

Adviser Lawyer

Death certificate issued, current will obtained and instructions submitted to View Legal with an asset schedule ✓

Advertisement/notice of application for grant ✓

Preparation of the application for grant and submission with the court ✓

Grant issued and supplied to adviser ✓

Distribution of assets ✓ (if needed)

Future investment advice ✓

Facilitating updated estate plans for beneficiaries ✓

Estate admin opportunities

Perfect complementary solution to front end estate planning

Use estate administration process to widen your client base

Maintain FUM, otherwise at risk on death of client

Intergenerational advice opportunities – administration of the estate and advice to beneficiaries

Satisfy compliance obligations

Diversified offering that can be delivered on a fee for service basis

Key planning areas

Initial compliance steps pre-probate

Trusted adviser

at time ofclient’s death

Estate admin piece

Audit of all family

members (& friends, business

associates and other advisers)

Adviser of choice due to deep

specialisation

Facilitating compliance in the medium

term(TT establishment, tax planning, notifications, registrations, finance

etc)

Advice for trust monies retained

(e.g. Children under 18)

Ongoing value adds

Securitisation and asset protection

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Financing arrangements

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Structure simplification

(especially arrangements of a surviving spouse)

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Planning advice where multiple

families are part of a single TT

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Complementary control of related

entities (e.g. principal/appointer etc.)

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Distributions to and from existing

family trusts

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MWB slide

THANK YOUPatrick EllwoodDirector

Mobile: 0400 503 111

Email: patrick.ellwood@viewlegal.com.au

Website: http://www.viewlegal.com.au/

Blog: http://www.blog.viewlegal.com.au/

Linked in: https://au.linkedin.com/pub/patrick-ellwood/96/625/348

The material contained in this presentation is based either on information derived from our proprietary business diagnostics (including research) or fromother sources within the market, which we believe to be reliable and accurate. It is general in nature and does not constitute specific advice. BusinessHealth makes no representation or warranty as to the validity, relevance or accuracy of this information as it pertains to any specific practice or business.

Proprietary & Confidential

THANK YOUHannah WhippyManaging Lawyer – Adviser Solutions

Mobile: 0433 619 765

Email: hannah.whippy@viewlegal.com.au

Website: http://www.viewlegal.com.au/

Blog: http://www.blog.viewlegal.com.au/

The material contained in this presentation is based either on information derived from our proprietary business diagnostics (including research) or fromother sources within the market, which we believe to be reliable and accurate. It is general in nature and does not constitute specific advice. BusinessHealth makes no representation or warranty as to the validity, relevance or accuracy of this information as it pertains to any specific practice or business.

Proprietary & Confidential