Probate - ByLawyersSuccession Act 1981. Grants vest title to the property of the deceased in the executor and thereby authority to deal with the assets and liabilities of the estate:

Probate Queensland

A full commentary on the law and practice as it currently applies to estates and in particular probate applications.

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Contents

OVERVIEW ................................................................................................................ 2

GETTING THE MATTER UNDERWAY .......................................................................... 4

The deceased ................................................................................................................ 4

Client engagement ........................................................................................................ 6

Is a grant required ......................................................................................................... 7

Funeral expenses and other creditors .......................................................................... 7

Executors ....................................................................................................................... 8

Renunciation ............................................................................................................... 13

Beneficiaries ................................................................................................................ 13

Challenging the validity of a will ................................................................................. 16

Caveats on grants ........................................................................................................ 20

APPLYING FOR PROBATE ........................................................................................ 21

Advertising .................................................................................................................. 21

Completing the forms ................................................................................................. 21

RESEAL.................................................................................................................... 24

Procedure .................................................................................................................... 24

EXECUTOR COMMISSION ....................................................................................... 26

Agreement to pay commission ................................................................................... 28

Application for commission ........................................................................................ 29

ESTATE TAXES, SUPERANNUATION AND DEEDS OF FAMILY ARRANGEMENT.......... 33

Estate taxes and duties ............................................................................................... 33

Superannuation death benefits .................................................................................. 37

Deeds of family arrangement ..................................................................................... 39

DEALING WITH ASSETS/ADMINISTRATION ............................................................. 41

Dealing with assets...................................................................................................... 41

DISTRIBUTION ........................................................................................................ 46

Payment of debts ........................................................................................................ 46

Estate fees ................................................................................................................... 49

Distribution ................................................................................................................. 49

Accounts ...................................................................................................................... 51

FINALISING THE MATTER ........................................................................................ 53

FURTHER INFORMATION ........................................................................................ 54

Commentaries

Connect

By Lawyers

Comments &

Suggestions

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Overview

The types of grants that may be sought include:

1. A. grant of probate. Where the deceased has a will appointing an executor who is

willing and able to apply for probate.

2. A. grant of administration with the will annexed. Where the deceased has a will but

the executor appointed by the will is unwilling or unable to apply for probate.

3. A grant of administration on an intestacy. Where the deceased does not have a will.

4. In addition, special grants are available in limited situations, for example, where a

grant is required in order to commence proceeding for a family provision claim.

The statutory framework is found in the Uniform Civil Procedure Rules 1999 and the

Succession Act 1981.

Grants vest title to the property of the deceased in the executor and thereby authority to deal

with the assets and liabilities of the estate: section 45(1) Devolution of property on death

Succession Act 1981.

A grant cannot be obtained unless property is left in Queensland. The exception is when a

grant is obtained for the purposes of a family provisions application under the Succession

Act.

Death can be presumed after seven years in certain circumstances. It is most unlikely that

this situation will arise for most practitioners.

If there is no executor willing and able to act the estate vests in the public trustee: section

45(1) Succession Act.

Grants that are made by the court as a result of a court contest are called grants in solemn

form as against the usual non-contested application, which leads to a grant in common

form.

Note: This commentary primarily relates to solvent estates, as do the forms.

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Special grants in limited situations

Without going into any detail on the specific requirements of these grants, it serves to know

that grants can be obtained.

When applying for such grants, the usual documentation is accompanied by affidavit evidence

of the special circumstances. For instance, if an urgent grant is required to enable the ongoing

conduct of the deceased’s business, then the documents to be filed are the Notice of

Intention to Apply for Grant, the application, an affidavit by the applicant confirming the facts,

a supporting affidavit by say the accountant for the business and draft minutes of order.

The following is a list of the special grants:

‒ Administration de bonis non administrates cum testamento annexo - administrator

dies before completing the administration of will;

‒ Administration de bonis non administrates – administrator dies before completing the

administration of intestacy;

‒ Administration pendente lite - appoint a receiver;

‒ Administration ad litem - to commence or defend proceedings;

‒ Administration by the guardian or administrator appointed by QCAT for a person

lacking mental capacity;

‒ Administration during minority;

‒ Application by an attorney of an executor appointed under an enduring power of

attorney;

‒ Administration durante absentia - executor/administrator outside Queensland grant

to an attorney;

‒ Administration to protect assets;

‒ Administration when the sole beneficiary/executor/administrator suffers from a

disability, he can nominate another;

‒ Grant to a creditor.

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Getting the matter underway

The deceased

Remains and funeral wishes

It is not uncommon for a testator to give directions in a will in relation to funeral

arrangements or to express a wish in relation to organ donation. Whilst these directions are

normally known to the family, it is prudent to view the will at the earliest opportunity.

The executor is responsible for dealing with the deceased’s remains. Given a number of

recent cases an executor would be wise to consult with all relevant family members and/or

other persons in relation to organ donation, funeral arrangements, and disposition of the

deceased’s remains.

The general rule is that there is no property in the remains of a person, so any directives in

wills to deliver the body to any person apart from the executor are not enforceable. That

person cannot dispose of the body or ashes without permission from the executor, and can

be restrained by injunction from doing so.

In the event that a dispute arises in respect of funeral arrangements, the discretion of the

executor is given paramountcy.

Where a dispute arises in respect of funeral arrangements of an intestate deceased, the

wishes of those entitled to letters of administration, or close relatives, are usually followed.

Specific rules apply to cremations under the Cremations Act 2003 (Qld). Particularly:

‒ If the deceased leaves signed instructions stating that they wish to be cremated, that

wish must be carried out: s 7(1) Cremations Act 2003.

‒ There is a duty on the personal representative to ensure that:

o a Form 1 Application for a Permission to Cremate is completed – see the

Forms section on the Queensland Courts website; and

o the cremation is carried out according to the deceased’s wishes – see

s 7(2) of the Cremations Act 2003.

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‒ A cremation cannot happen if the deceased’s spouse, including de facto spouse, adult

child or parent objects: s 8 Cremations Act 2003. This only applies where signed

instructions to cremate are not left by the deceased.

Other preliminary matters

The executor has no authority to deal with the deceased’s property or to take any step in

the administration of the estate until probate is granted. Indeed, a person who

intermeddles in an estate prior to the grant of probate may be liable to the estate for any

loss occasioned by the person’s conduct. As a corollary, no person has an obligation to

protect and maintain the assets of an estate until probate is granted. Accordingly, during the

period between death and the grant of probate, which can be some time, there is no formal

mechanism for using estate funds for things such as maintaining dependants, paying bills

and maintaining assets.

However, s 54 Succession Act permits the executor, once probate is granted, to ratify any

such step taken by a third party. Importantly, the protection given by s 54 does not extend

to steps taken by the executor himself.

Normally family members attend to these sorts of requirements on the basis that in due

course their conduct will be ratified by the executor. However where the steps to be taken

are substantial and involve a degree of risk to the estate, for example, continuing the

conduct of a business, an urgent special grant – see above – can be obtained.

Cause of death

It is important to consider if the cause of death gives rise to any compensation or damages,

for example, death as a result of a motor vehicle or work accident. See the Motor Vehicle

Accident or Workers Compensation guides for more information.

Simultaneous deaths

Where it is impossible to determine the order of death the presumption of survivorship

operates and the younger is deemed to survive the elder. Where more than two persons

have died, the deaths will be presumed to have occurred in order of seniority. See s 65

Succession Act 1981.

Is the deceased intestate

Intestacy arises where either the deceased leaves no valid will, or the valid will does not

effectively dispose of all the deceased’s estate. A total intestacy arises where the deceased

appoints an executor, but either does not direct how the estate should be distributed or all

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of the proposed beneficiaries have predeceased the testator. A partial intestacy arises

where only part of the estate is disposed of.

Presumption of death

Death can be presumed after seven years or earlier in certain circumstances, for example,

where a plane is lost at sea. For most practitioners it is unlikely that this situation will arise.

An application can be made to the Supreme Court for a declaration of death. The court will

require significant evidence if it is to make an order on issues such as the person’s age,

mental and physical condition, relationships, financial situation, circumstances of the

disappearance, bank accounts, phone records, results of tracing organisations to name a

few.

Client engagement

Of note:

‒ Where the firm is to act for multiple parties (i.e. a number of executors or

administrators), it should always be pointed out that the firm cannot act or continue

to act where there is a (material) conflict of interest.

‒ In order to avoid any potential conflict it should also be made clear to beneficiaries at

the outset, that the firm acts for the executor and not the beneficiaries – assuming the

firm has not been specifically engaged to act for those beneficiaries as opposed to the

executor – lest the beneficiaries later claim some lack of legal advice they ‘expected’

the firm to provide to them.

‒ A conflict of interest/concurrent matters check should be carried out; and the extent

of the retainer considered, discussed with the client, and documented. In this regard,

care should also be taken lest, in the circumstances, it could later be said the lawyer

had a duty of care to advise on matters beyond those usually dealt with. For instance

it may be appropriate to advise the client on the liability of executors and trustees

contemplating arrangements which may lead to their personal liability (see

Lederberger & Anor v Mediterranean Olives Financial Pty Ltd & Ors [2012] VSCA 262).

‒ Care should be taken at the outset in preparing the required costs disclosures (see

Estate fees below), including the basis or bases upon which costs will be payable, and

also including a full list of variables which may affect those costs. Obtaining a grant is

not always the ‘simple’ process it first appears to be.

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Is a grant required

There is no statutory requirement to obtain a grant. Most banks and financial institutions will

not insist on a grant if the amount they hold for the deceased is less than $50,000. In these

circumstances they will normally accept evidence of death, entitlement and signing of

indemnities by the executor named in the will.

Land registered as a joint tenancy only requires a record of death accompanied by the death

certificate to effect the registration of the survivor as the registered proprietor. Other land can

be transmitted without a grant by preparing a transmission application in either form 5A or

form 6 if the land is not worth more than approximately $150,000. Otherwise land cannot be

transmitted unless a grant appointing an administrator has been obtained, and a transmission

application, in either form 5A or form 6, lodged supported by the letters of administration.

Distribution without a grant

Executors may well want to protect themselves on a distribution without a grant, and a form

of release and indemnity to be signed by recipient beneficiaries is included in the matter plan.

Funeral expenses and other creditors

Funeral expenses

In order to pay a person’s funeral expenses most banks will allow funds to be withdrawn

from the estate before a grant is obtained.

Practitioners should be aware that the individual who arranges the funeral is entitled to be

reimbursed for any expenses they incur out of the estate, as long as they are not

extravagant. Arrangements made should be in keeping with the wishes of the deceased.

Often funeral directors are willing to allow for payment to be deferred until the funds are

available following the distribution of the estate.

It is important to remember that the costs for headstones or memorial plaques do not

qualify as funeral expenses and cannot be reimbursed from the estate funds unless the

deceased has made a specific provision in their will allowing for that expense.

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Other creditors

Other creditors must wait to be paid until the assets of the estate are available to the

executor.

Note: Care needs to be taken by solicitors when writing to creditors of the estate, as any

statement that an account will be paid, particularly given that the executor may later change

their instructions, could likely be construed as a solicitor’s undertaking.

Executors

The executor is personally responsible for the initial and ongoing administration of the

deceased’s estate.

Duties

This includes carrying out the following duties:

‒ arranging the funeral;

‒ identifying, gathering in and protecting the deceased’s assets;

‒ applying for probate, if required;

‒ selling and disposing of estate assets;

‒ lodging tax returns and obtaining final tax assessments;

‒ after all assets are gathered in and all debts paid, distributing to relevant beneficiaries;

‒ defending any claim brought against the estate.

Appointment of executors

A maximum of four executors can be appointed: s 48 Succession Act.

If an executor refuses to prove the will, or renounce, as may happen if a benefit enjoyed by the

executor will be lost if the will is followed, then the other executors, if any, can apply for

probate, or any interested party may apply for administration, with the will annexed provided

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the executor has been cited pursuant to rule 637 of the Uniform Civil Procedure Rules. Similarly

an application can be made if the executor cannot be found.

If the executor is too ill to apply then another beneficiary, if there is one, or the executor's

next of kin apply for administration with the will annexed.

An executor cannot be forced to apply and can renounce. If the executor has intermeddled

in the affairs of the estate – that is, acted in the estate – he may still renounce executorship

before a grant of probate has been made: s 54 Succession Act 1981. Arranging the funeral or

attending to urgent matters is not intermeddling. Renunciation finally extinguishes the right

to a grant.

Where an executor does not have legal capacity but has appointed an attorney, the attorney

may apply for letters of administration with will annexed in the executor’s stead. The grant

will be subject to the limitation that, if the executor subsequently becomes capable, the

grant to the attorney is surrendered: see Re Wild [2002] QSC 200. The attorney will prove

the power, the fact he has no knowledge of revocation and the executor’s incapacity

through an Affidavit for Letters of Administration with the Will (form 106). The basis for this

application is that the executorship is a trustee function and that s 56 Trusts Act 1973

permits a trustee to delegate its powers during any period of incapacity.

Where the executor is subject to a guardianship, the grant is applied for by the guardian or

administrator depending upon the nature of the order. The order should be exhibited to the

affidavit in support (form 106), which will include all of the usual matters needing to be

deposed to. Additional evidence of incapacity will need to be exhibited where the order

covers financial matters only. The grant is the same applied for in the situation where an

enduring power of attorney makes the application.

Once appointed an executor cannot resign or retire without the permission of the court. The

office cannot be assigned as the court makes the appointment.

A will appointing more than one executor will normally deal with the possibility that an executor

might predecease the testator. However, if the will does not address this possibility, the

surviving executor is entitled to probate.

If an executor or person entitled to administration is unable or unwilling to take probate or

letters of administration, that person may – but cannot be compelled to – renounce by

completing a Renunciation of Probate (form 114).

However, in the absence of a renunciation, the remaining executors may apply and the

abstaining executor will be given leave to prove at a later time. Should a named executor

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apply for a grant after the original grant a ‘double probate’ will be granted. The original

grant is not revoked and will generally be attached to the double probate.

Where multiple executors have applied for a grant of probate, they must all then act jointly

in relation to all matters regarding the administration of the estate: s 49(4). The same rule

applies for trustees.

A personal representative/executor can authorise another personal representative/executor

to act as their agent to do particular things that have been agreed by all executors.

Certain actions cannot be delegated. The actual act of applying for the grant of probate

must be made by those personal representatives/executors who wish to apply. Land titles

documentation must be signed by all executors appointed. Some superannuation

application forms and bank application forms usually require all executors to act personally

and sign documentation personally in their capacity as executors.

Where an uncooperative executor refuses to actively participate in the administration of the

estate or where executors cannot unanimously agree on a course of action, which will have

the necessary effect that the course of action cannot take place, application must be made

to the Supreme Court if a personal representative/executor is to be removed.

Application can be made to the Supreme Court to remove an executor as personal

representative if they refuse to administer the estate or renounce under the following:

‒ r 642 of the Uniform Civil Procedure Rules 1999; or

‒ s 6 of the Succession Act 1981; or

‒ s 31 of the Public Trustee Act 1978.

On death of one of several executors, the survivors continue – unless the will specifically

provides for a substitute executor in such circumstances. On the death of the last of the

executors, that person’s executor becomes the executor by representation.

Once the administration of the estate is completed the executor becomes a trustee and in

that capacity may retire under Part 2 Appointment and discharge of trustees-devolution of

trusts, Trusts Act 1973, which deals with the retirement of a trustee or delegation of their

responsibilities if they are absent from the state.

Section 12 of the Trusts Act provides that where a trustee, original or substituted, amongst

other things:

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‒ is deceased;

‒ remained out of the estate for more than a year;

‒ seeks to be discharged as trustee;

‒ refuses to act or is unfit or incapable of acting as trustee;

then the remaining trustees – or the personal representative of the last surviving or

continuing trustee – can appoint a person or persons to be trustees in the place of that

other trustee.

It is a far simpler process to appoint and discharge a trustee than it is an executor. As with

executors, when evolving into the role from executor to trustee, the trustees must continue

to act jointly.

An executor can reside outside Queensland provided an address of service in Queensland is

provided.

Rectification

The court has a power to make, alter or revoke a will to give effect to the intentions of a

deceased who does not have capacity: s 21 Succession Act 1981.

The court has power to dispense with execution requirements for a will alteration or

revocation: s 18 Succession Act 1981.

Revocation of executor through divorce, termination of a civil partnership, and

ending a de facto relationship

The ending of a testator’s de facto relationship or civil partnership revokes:

(a) an appointment made by the will of the former de facto partner/civil partner, as an

executor, trustee, advisory trustee or guardian;

(b) any grant made by a will of a power of appointment exercisable by, or in favour of, the

testator’s former de facto partner/civil partner;

(c) a disposition to the testator’s former de facto partner/civil partner made by a will in

existence when the relationship ends: ss 15A and 15B.

None of these provisions apply however if there is a contrary intention in the will.

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However, the ending of a testator’s de facto relationship/civil partnership does not revoke:

(a) the appointment of the testator’s former de factor partner/civil partner as trustee of

property left by the will on trust for beneficiaries that include the former de facto

partner’s/civil partner’s children; or

(b) the grant of a power of appointment exercisable by the testator’s former de facto

partner/civil partner only in favour of children of whom both the testator and the

former de facto partner/civil partner are parents.

If a disposition, appointment or grant is revoked by this section, the will takes effect as if the

former de facto partner/civil partner has died before the testator.

In s 15B a former de facto partner/civil partner of the testator means the person who was

the de facto partner/civil partner of the testator immediately before the ending of the

testator’s de facto relationship/civil partnership.

Replacing an executor who fails to complete administration

When an executor fails to properly administer the estate – whether it be through a physical

or mental incapacity, or because they neglect or refuse to effect the estate’s administration

– the court has an inherent power to revoke a grant of probate and a statutory power to

revoke a grant of administration.

In order to have an executor removed, an application to the court must be made to revoke

the existing grant, and an application for a new grant be made. Proceed by way of

application with an affidavit in support setting out the details of the grant, the issues with

the executor such as inaction or lack of instructions, perhaps their disappearance and your

endeavours made to contact them, and the actions required to complete the administration

of the estate. Where another person is proposed by the applicant to take over the

administration of the estate, usually the applicant themselves, but sometimes an

independent person such as a solicitor or a trustee company, the affidavit will need to

specify that person and describe their suitability/credentials. An additional affidavit will also

be required from that person or company indicating their willingness to accept the role and

their applicable charges, if any.

The question of costs should be considered. An order for the costs of any application to be

paid from the estate is not strictly necessary but is prudent and should be sought. In

extreme circumstances, where the non-performance of the executor is wilful or deliberate,

an application for costs against that person might be appropriate, especially where they are

themselves a beneficiary and their behaviour has prejudiced the other beneficiaries.

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Where a grant to two executors is revoked and a new grant is issued to one of the original

executors, it is not necessary for the continuing executor to prove once more all the matters

proved in the original grant.

Renunciation

If an executor appointed by a will does not wish to apply for probate, they must sign a

renunciation, which is then filed with a subsequent application for grant for probate or

letters of administration.

Where there are no remaining executors named in the will the appropriate person applies

for letters of administration with the will annexed.

An executor may decline to act for any reason – even if they had earlier agreed with the

testator to be the executor.

A renunciation of probate must be in writing and filed with the application for a grant. See

the guide for precedent Renunciation of Probate.

Until a renunciation is filed an executor may withdraw the renunciation and apply for a

grant.

Renunciation extinguishes the right to a grant, but does not affect any benefit given in the

will.

A renunciation cannot be retracted except with leave of the court. Leave will only be given if

the court is satisfied that the retraction is in the best interests of the estate or of those

interested under the will.

The taking of probate by an executor who has been given leave to retract a renunciation

does not affect previous acts by the executors or administrators who administered the

estate up to that point.

Beneficiaries

Who is a beneficiary?

A beneficiary is a person or entity to whom a bequest is made in a will. However, for the

named person to be a beneficiary, both the will and the bequest must be valid. It is

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incumbent upon an executor to establish the validity of the will and then to administer the

estate according to the terms of the will. This means the executor holds the estate for the

beneficiaries and has a duty to them. This still applies even where, as is often the case, the

executor is one of the beneficiaries.

Solicitors dealing with beneficiaries when acting for the estate

When acting for the estate, on the instructions of the executors, practitioners must take

great care to properly manage their relationship with the beneficiaries. The beneficiaries are

not the client, although the lawyer may have a duty of care to them in certain

circumstances. Beneficiaries are generally eager to receive their entitlement under the will

as soon as possible.

Often beneficiaries can become dissatisfied or take issue with the way an estate is being

administered. These concerns commonly focus on the length of time taken to administer the

estate, decisions about the investment and use of assets of the estate or the distribution of

discretionary items and personal effects such as furniture. Beneficiaries may also become

dissatisfied with the estate solicitor whom they blame for any delay or resent for charging

fees to administer the estate.

The key to managing the expectations of beneficiaries when acting for an estate is clear

communication. Beneficiaries must be given to understand from inception that the lawyer

acts for the estate, on the instructions of the executors, not for them. They should be given

a copy of the will as soon as possible and the process of applying for probate or letters of

administration should be clearly explained to them, including the approximate time frame.

If beneficiaries are causing trouble, it can be helpful to point out to them that every time

they contact the solicitor the estate will be charged for it and therefore the value of their

own entitlement will reduce; this can be a two-edged sword though, as a beneficiary might

take perverse delight in costing the estate money by contacting the estate solicitor

frequently.

In general, it should be made clear to beneficiaries that the estate solicitor is neither able

nor required to give them advice about their rights and if they have any issues with the

estate they are at liberty to seek their own independent legal advice at their own cost.

Challenge to the will by a beneficiary

A beneficiary who believes there is a problem with the will, such as a contention that the

deceased did not have capacity when the will was made, should be advised by the estate

solicitor to seek independent advice.

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The executor should be notified promptly of any prospective challenge to the will and/or a

caveat should be lodged by the person proposing to challenge.

In circumstances where all parties are in agreement about the challenge, for example they

agree that the deceased did not have capacity, the following methods could be

implemented for completing the administration without resorting to court proceedings:

‒ an application for probate, or letters of administration with the will attached, could be

made in relation to a prior will; or

‒ a deed of family arrangement could be executed providing for probate to be sought of

the disputed will on the basis of an agreed adjustment to its terms.

The executor is in a dilemma where a beneficiary raises issues with the will’s validity but

does not commence any proceedings to challenge it. There is often a ‘stand-off’ whereby

the executor does not want to apply for probate in view of the prospective challenge, but

the beneficiary does not want to incur the cost and risk of proceedings. The size of the

estate will be a significant factor in the way such a situation is resolved. Ultimately, the

executor must either apply to the court, or compromise the claim.

Beneficiaries who do not have any issue with the validity of the will, but who consider that

inadequate provision has been made for them in the will, can make a claim for greater

provision under the Succession Act 1981. Such beneficiaries must obtain their own

independent advice about any claim.

Vesting of a beneficiary’s interest in an estate

A beneficiary has no legal right or title to property of the estate until the executor or

administrator transfers it to them following a grant of probate or letters of administration.

Until then it is held on trust for them, either generally, or subject to any specific terms of

trust in the will. If the beneficiary’s interest is conditional, for example upon them reaching a

certain age, then the condition must be met before the gift can vest. A beneficiary can apply

to the court to have their interest vest earlier than provided for in the will.

Right to a copy of the will and the inventory of assets

Often times someone may wish to find out if they are a beneficiary of a will. Section 33Z

Succession Act 1981 sets out the persons entitled to inspect a will or to obtain a copy of a

will. A copy of the will is obtained by completing an application for a copy of a will or

probate.

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If they are a beneficiary then, by the same application, the inventory of assets and liabilities

can also be obtained.

Challenging the validity of a will

Challenging a will questions its validity.

Contesting a will questions the fairness of its provisions.

Whilst each Australian state and territory has its own laws in relation to wills, the

circumstances and processes when challenging a will are similar across all the states.

Family members, dependents and beneficiaries named in a will may distrust the will’s

validity, alleging that it should not stand as the testator’s last will. They may suspect the

testator lacked capacity to make the will due to mental illness, or that it was executed under

coercion or suspicious circumstances.

The judgment of Leeming JA in Mekhail v Hana; Mekail v Hana [2019] NSWCA 197 provides a

detailed assessment of the suspicious circumstances doctrine.

To challenge a will an applicant requires ‘standing’, which essentially means they must have

an interest in the proceedings either as a beneficiary named in the current will or a former

will, or they are an eligible person on intestacy.

Instituting proceedings

There are no time limits when challenging a will, unlike family provision claims, although

there is a better chance of success if it is initiated before the grant of probate. After probate

has been granted the process is much more difficult as a successful challenge requires the

revocation of the grant and an explanation as to why it was not prevented from happening

in the first place.

If a will is to be challenged it is best to first file a caveat in the Supreme Court which will

prevent the court from granting probate until the caveat is removed, either by party

agreement or by court order.

Proceedings are then instituted in the Supreme Court with both parties providing affidavit

evidence in support of their claims.

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Essentially, one of the following grounds must be established before the court will rule the

will to be invalid:

1. lack of testamentary capacity or intent;

2. lack of knowledge and approval;

3. fraud;

4. undue influence;

5. forgery.

Lack of testamentary capacity or intent when challenging a will

To have the necessary testamentary capacity a person must, according to Banks v

Goodfellow (1870) LR 5 QB 549, 565:

1. understand the nature and effect of the will;

2. understand in general terms the nature and extent of their property;

3. comprehend and appreciate the claims to which they ought to give effect;

4. weigh the respective strengths of those who may have such claims; and

5. not be suffering any delusions with regards to those people that should be considered

when making the will.

If a testator is deemed not to have had the mental capacity at the time instructions were

given, or upon execution of the will, then it is invalid.

It is possible for a person suffering from a condition such as Alzheimer’s to have a lucid

interval when instructing on and executing their will, however they still must satisfy the

tests above.

Initially the onus is on the party seeking to challenge the will to raise doubt as to the

testator’s capacity.

The onus then shifts to the propounder of the will to show that the will was executed in

accordance with the relevant Act and that there were no suspicious circumstances.

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If that onus is discharged, then the onus falls back to the will challenger to prove the

testator lacked the obligatory intention to create a will when executing it.

To determine capacity, the following evidence may be considered:

− retainer instructions, file notes and other records made by the solicitor who drafted

the will;

− statements from the witnesses to the will’s execution;

− any relevant medical records;

− any evidence on the conduct and health of the testator at the time the will

instructions were given or the will executed.

Lack of knowledge and approval

The testator must know and approve of the contents of their will. Prima facie a properly

executed will carries a presumption that the testator knew and approved of its contents.

A lack of knowledge and approval of the will contents might occur either through fraud,

mistake, or the delegation of another to determine and draft the contents of the will.

Will challengers must raise a suspicious circumstance concerning execution of the will.

People seeking to uphold the will must prove that there was knowledge and approval of the

will contents. Ultimately it is down to the challenger to prove their case.

A solicitor’s retainer instructions may evidence the instructions given by the testator and

may also reveal the circumstances surrounding the execution of the will, the testator’s

understanding of the will contents, and whether or not the will was read to or by the

deceased.

Fraud

Fraud involves fraudulent conduct by a beneficiary either by misleading a testator into giving

them an unwarranted benefit, or preventing a benefit being given to another person. The

alleged conduct must directly influence the testator for the sole purpose of creation or

prevention of that benefit.

Fraud is not concerned with the overpowering of volition as in undue influence, but rather

with misleading or deceptive conduct - instilling in the mind of the testator false and

delusive notions.

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The party alleging fraud must produce evidence of their claim such as false statements or

the suppression of material facts.

One common example of such conduct includes leading the testator to believe they are

signing something that is not a will. Another is to mislead the testator into making a will that

they would not otherwise have made.

Undue influence

Whereas fraud misleads a testator, undue influence coerces them.

Evidence of undue influence must show coercion, rather than persuasion. It may consist of

either psychological or physical threat and must result in the testator making a will against

their wishes. The coercion must be so great that the resulting will is inconsistent with the

testator’s intention.

Undue influence can invalidate a will leaving it inadmissible to probate, or invalidate just

part of a will. For example, a specific gift may be nullified leaving the remainder as a true

reflection of the testator’s wishes.

The difficulty is providing sufficient direct evidence that warrants a decision of undue

influence. An allegation based on surrounding circumstances must still prove that the

testator’s volition was overborne producing a will contrary to their intention.

Where both fraud and undue influence arise on the facts, each ground for challenging the

will must be pleaded separately.

In succession law, there is no presumption of undue influence arising from particular

relationships.

Forgery

There needs to be direct evidence that the will was not signed by the testator and is in fact a

forgery.

Australian courts have been reluctant to find a will to be invalid without strong evidence,

particularly so in cases of alleged fraud or undue influence.

Motivated by self-interest many allegations are found to lack substance and great care is

required before embarking upon such a course of action as a cost order will follow an

application found to have little merit.

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Caveats on grants

When a challenge to a will is contemplated, it is necessary to put the court on notice of the

proposed challenge.

The caveat is in force for six months but may be renewed for six months by filing a new

caveat: r 624 Uniform Civil Procedure Rules 1999.

The procedure it set out in UCPR 625. Once an application for a grant is made the registrar

will give notice to the caveator who must then file a Notice in Support of Caveat and serve a

copy on the person applying for a grant. If an application for probate has already been filed,

the caveator can file this notice with the caveat.

If the caveator does not file a notice in support within eight days of the registrar’s notice,

the caveat will lapse. If the notice in support is filed, the application for a grant cannot be

considered until the caveat is set aside or withdrawn.

The court may set aside a caveat if the caveator is unable to show that they have an interest

in the estate or a reasonable prospect of establishing an interest: UCPR 626.

A family provision claim is not a challenge to the will and is not sufficient grounds for lodging

a caveat.

A caveat may be withdrawn at any time: UCPR 627.

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Applying for probate

Advertising

The advertisement must appear at least 14 days before the filing of the Application for

Probate. The Notice of Intention to Apply for Grant (‘Notice of Grant’) must be published in

the Queensland Law Reporter, a publication approved by the Chief Justice under Practice

Direction 14 or 2017, pursuant to rule 599(2) of the Uniform Civil Procedure Rules 1999.

The Notice of Grant should include the Statutory Notice pursuant to s 67 of the Trusts Act

1973, calling on anyone who has a claim as creditor, beneficiary, or otherwise against the

estate to send particulars to the personal representative.

Rule 598(2) of the Uniform Civil Procedure Rules also requires that a copy of the notice be

given to the public trustee of Queensland at least seven days before filing the application. This

notice may be given by post or fax.

Completing the forms

The following documents are required:

‒ Notice of Intention to Apply for Grant;

‒ Application for Probate;

‒ original will;

‒ Affidavit in support of application with:

▪ photocopy of will,

▪ original death certificate,

▪ original death certificate of deceased executor, if applicable,

▪ original renunciation, if applicable;

‒ Affidavit of Publication and Service.

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Form Description

Application The application should show the name of the deceased as stated in the will and, if different to the name shown on the title to an asset, should also say 'Also known as' and provide an explanation in the applicant's affidavit.

The same applies to the executor’s name.

If the deceased moved after making the will then state the last address and the address in the will.

Affidavit The affidavit of the executor must exhibit the will and death certificate of the deceased.

The court usually accepts the attestation clause and the names of the witnesses as sufficient evidence of proper execution.

An affidavit of an attesting witness may be required if, for instance, different pens are used by witnesses, the testator is blind or the attestation clause is wrong.

Death is proved by the death certificate but can be proved by affidavit if difficulties are encountered in obtaining the certificate. The affidavit would be by a person not being a beneficiary who saw and identified the body on the day of death.

A death certificate for an executor who has died must be exhibited, as must the renunciation for one who has renounced.

Unusual matters

There are recognised procedures in applying for a grant of representation and applications must comply with the Act and rules, however it is not always a ‘one size fits all’ process. More often than not there will be additional matters which need to be taken into account, such as differences in names, irregularities in the execution of the will, executors renouncing or reserving their rights, witnesses disappearing into thin air and the list goes on. It is not possible to cover every single circumstance which might arise.

If an issue is identified it may be necessary to include an additional clause in the Affidavit of Executor, or if there are a number of additional matters to be addressed perhaps draft an additional Affidavit in Support by the executor/administrator/other - depending on who has the requisite knowledge. The most important thing to remember in these circumstances is to identify the issue, obtain instructions, make enquiries, detail the resolution or attempts to resolve and then prepare the affidavit.

Original will As well as exhibiting a photocopy of the will to the affidavit, the original will itself must also be lodged as a separate document.

Lost will A true copy identified as such can be proved with evidence of the loss, search, proper execution and, if possible, the consent of those who would

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be beneficiaries on an intestacy. If the assets and beneficiaries have remained the same, then the presumption of revocation would be easier to rebut. If a solicitor has lost the will then the presumption of revocation does not arise and an affidavit of loss by the solicitor is required.

Informal will The court has the power to make a grant of probate in relation to an informal document: s 18.

Marks on the will The executor may encounter a situation where there are marks on the

will, such as glider clip marks, hole punch marks, et cetera, and these may

need to be explained so the court can be satisfied that the will was not

attached to some other relevant document, such as a codicil, or that the

marks were not made by the testator with the intention of revoking the

will.

Depending upon the situation, affidavits in support from the following

people might be considered, in addition to any other applicable person:

‒ a person with personal knowledge of how the will came to be

marked;

‒ the executor or other person with whom the testator personally

discussed the contents of the will and/or made any relevant

statements;

‒ a person with personal knowledge of where the will was located

after the testator’s death, the condition of the will when found, and

any other papers to which the will was attached when found.

Multiple (original/executed) copies of the will

This is unusual but can occur. In this situation all copies of the will

comprise ‘the will’ for probate purposes.

In these circumstances the court will need to be satisfied that all copies of

the will have been submitted for probate. The requirements of the court

may include provision of evidence regarding:

‒ execution of the will, including how many copies were executed,

and the surrounding circumstances;

‒ the number of copies of the will prepared by the applicable firm or

other.

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Reseal

Assets held in Queensland normally require a grant of probate in Queensland in order to deal

with them. However where a testator has assets in more than one jurisdiction and a grant has

already been made in another jurisdiction it may be possible to obtain a ‘reseal’ of that

original grant rather than apply for a fresh application in Queensland.

The Queensland Supreme Court has power under s 4 of the British Probate Act 1898 to reseal

a grant of probate obtained 'in a part of Her Majesty’s dominions' - that is, obtained in any

Australian state or territory, and those independent members of the Commonwealth which

still recognise the Queen as head of state, which would include New Zealand and Canada.

Once resealed the grant has the same effect and operation in Queensland, as if it had been

originally granted by the Queensland Supreme Court.

A grant issued in a foreign country which is not a dominion cannot be resealed. An application

to administer the Queensland estate would need to be made in the normal way.

The court may require the applicant to give security or guarantee for the due administration

of the estate: see section 4(3).

Exceptions to this are:

‒ In the case of minor assets enquiries should first be made with asset holders as some,

such as banks and share registries, may accept a grant from another jurisdiction

together with satisfaction of other requirements.

‒ A reseal of a grant made in another state will not be required in relation to the

transfer of title of property provided the person to whom the grant was made is the

same as the applicant for transmission. The form 5A Transmission Application should

be supported by the original foreign grant or an exemplification of the foreign grant

and the death certificate.

Procedure

Rule 615 – 620 of the Uniform Civil Procedure Rules dictate the procedure followed by the

court in resealing a grant under the British Probates Act 1898.

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Rule 617 provides that a Notice of Intention to Apply for the Resealing of the Grant does not

need to be published or served unless there are debts owing at the date of the Application in

Queensland or the Court or Registrar otherwise requires it for some reason. If required see

Advertising in Probate above.

What documents are needed

The following documents are required for reseal of a foreign, including interstate, grant:

‒ Application for Reseal (form 112);

‒ Affidavit Supporting Application for Reseal (form 113);

‒ the original grant (include copies of all testamentary papers admitted to probate), or an

exemplification or office copy from the court of the original grant which bears the

rubber, embossed or other seal of the court on every page;

‒ if the original grant does not include a copy of the will one must be filed with the

application;

‒ if the applicant is an attorney the power of attorney must also be exhibited.

It is common for the person to whom the original grant is made to appoint an attorney to be

the applicant. Often the solicitor acting on behalf of the person to whom the original grant is

made, instructs a fellow solicitor in Queensland to act as attorney. The power of attorney

(usually in the general form referred to in section 11, Power of Attorney Act 1998) is then

exhibited to the applicant’s affidavit.

The Registry prepares and issues the reseal.

The registrar must send to the court from which the foreign grant was issued notice that the

grant has been resealed in Queensland.

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Executor commission

An executor is entitled to receive such remuneration or commission for their services as

personal representative as the court thinks fit: s 68 Succession Act 1981. If a commission is

to be sought, the application to the court is made under r 646 Part 10 Uniform Civil

Procedure Rules 1999.

Services performed as a trustee may be remunerated pursuant to section 101 of the Trusts

Act 1973. An order for commission is a discretionary one, and the size of the estate and the

'pains and trouble' involved in the administration usually determines the sum awarded. 'Pains'

generally refers to responsibility, anxiety and worry, whilst 'trouble' generally concerns the

work done by the applicant: Re Mclean (dec’d) (1912) 31 NZLR.

What does the court consider in awarding commission

To determine the amount of commission the court will have regard to what the executor

has been required to do in performance of their duties; the size of the estate; any other

benefit obtained from the estate; and any failure, delay or breach of trust evidenced in their

performance: Vance’s Executor's Commission (1969) 187–188; Patterson v Halliday [2003]

VSC 298.

However, the court cannot make an order for commission where there are no assets held by

the executor from which commission can be paid: In the Will of Zyngol (1958) 75 WN (NSW)

241.

In instances where there are multiple executors, the court may have regard to each

executor's particular work and award the commission accordingly. It is not an exercise

where an overall commission is divided equally between executors: Watters Re Estate of

Dibbs [2006] NSWSC 1277.

Value of commission

Whilst s 68 refers to a 'remuneration or commission', the court generally awards

commission on a percentage basis. Any award is discretionary however the following is the

typical basis of calculation:

‒ income receipts - between 3% to 5%;

‒ capital realisations (Corpus) – between 1.5% to 3%;

‒ assets transferred - between 1% to 3%.

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For larger estates the scale in Re Barr Smith [1920] SASR 380 may also be useful.

The Trustee Companies Act 1968 determines the commission charged by trustee companies.

It is generally accepted that it can be difficult to award a lump sum figure, particularly in

continuing estates. In practice a lump sum will only be awarded in instances where there is

only one set of accounts or one final account and it is still usually a calculation of

percentage, only awarded as a lump sum. When it is known that the executor will have

some further work in winding up the estate, it will be necessary for the executor to provide

an undertaking that no further application for commission will be made: Spence v Spence

[2003] NSWSC 1232.

If the administration will be continuing for a long time, commission applications can be

made in stages as long as the costs of taking the accounts will not be wasted: In re King

[1933] VicLawRp 32.

Professional executors

If the executor is a professional such as a solicitor or accountant, he or she is entitled to

charge professional rates for all tasks whether professional or non-professional. A charging

clause in the will usually provides this but section 101(2) of the Trusts Act 1973 allows it.

In the absence of any specific authority in the will, it is open to the professional executor to

charge for their services, which will be taken into consideration in any further application for

commission. Or alternatively they may make no professional charge and seek commission in

the usual way. See generally Re The Estate of D A Lindsay [2004] NSWSC 578 at [8] - [9];

Spence v Spence [2003] NSWSC 1232; Re Craig (1952) 52 SR (NSW) 265.

A note of warning: practitioners who have drafted the will and who are appointed as an

executor should ensure compliance with rule 12 Australian Solicitors Conduct Rules. One

potential problem which may arise is a presumption of undue influence when acting as

executor whilst obtaining a benefit at the beneficiaries' expense by way of legal fees:

Johnson v Buttress [1936] HCA 41. The benefit would need to be significant and would be

generally related to instances where the executor has not fulfilled their duty of full and frank

disclosure to beneficiaries.

Executor as beneficiary

A gift in the will to an executor may have an impact on any award of commission depending

upon the amount of the gift and any specific drafting in the will. There is a presumption that

a gift to a named executor exhausts their right to commission Re Lack [1983] 2 QdR 613. The

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matter to be determined is whether the gift was contingent on them acting as an executor

or not. If it is clear that the testator intended to make the gift because of the relationship

and not as remuneration for the efforts of an executor, an award for commission may be

made in addition to the gift. See In the Will of Morrison (1933) 50 WN (NSW) 88; In the Will

of Kerrigan (1935) SR (NSW) 242.

Is tax payable on commission

Commission received as an executor is assessable income. Deductions may be claimed

pursuant to s 8-1 of the Income Tax Assessment Act 1997. See ATO ID 2003/705.

Agreement to pay commission

In practice, commission is usually agreed between the personal representative and the

interested beneficiaries. The amount of commission is usually no more than 1-2% of the

estate. It is discretionary and an executor seeking commission should be aware that the

court may not award any commission at all, especially in a small estate where nothing

unusual has been required and the executor is also a beneficiary.

As the commission payable to the personal representative for the administration of the

deceased estate is a testamentary expense, the interested beneficiaries are those parties

that are entitled to receive the residue of the estate that the testamentary expenses will be

paid from, which in most cases are the residuary beneficiaries.

The personal representatives should ensure that all interested beneficiaries have full

disclosure of the work in relation to which the commission is charged, together with an

itemised invoice for all such legal fees paid by the estate in respect of that work. The

beneficiaries must be informed of their right to have the court assess the commission being

claimed and be advised they should seek independent legal advice.

Where an interested beneficiary is a minor, however, an agreement is not possible as the

court is required to sanction the agreement in those circumstances.

Trustee companies commission is regulated by Chapter 5D, Part 5D.3 of the Corporations

Act 2001. Trustee companies are obliged to publish a current schedule of their fees and

charges and cannot charge in excess of those published fees.

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Application for commission

The costs associated with any application should always be considered before filing,

particularly in the Supreme Court. To avoid the costs associated with the formal application,

it is in the beneficiaries’ interests for the executor and beneficiaries to come to an

agreement as to commission (provided the beneficiaries have capacity) wherever possible.

In the event no agreement can be reached an application must then be brought before the

court. Prior to making that application you should be satisfied the executor has thoroughly

fulfilled their duties.

Two methods

Two methods of making an application are available:

1. an application pursuant to rule 657C (the most common form); or

2. an application pursuant to rule 10.

Both applications are brought before the court. As a prerequisite to bringing such

application a Grant of Representation must have been made (Re Batt [1957] QWN 1).

The process pursuant to rule 657C

If an application is made to the court, the following steps need to be taken:

1. Prepare an application and supporting affidavit by the trustee setting out the basis of

the application, the commission sought, the trustee’s justification for the commission,

an inventory of the estate, and material to identify the appropriate respondents to the

application.

2. Unless otherwise ordered, the application and affidavit must be served on all

beneficiaries affected by the order sought (r 657C(3)).

3. An estate account does not need to be filed, assessed or passed before an application

for commission is determined but the court in its discretion may order the same, in

which case the application for commission will be adjourned until the estate account

has been filed, assessed and passed (rule 657D).

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Assessment of estate accounts

If the court requires an assessment, it will appoint an account assessor to carry that

assessment out. If the court makes such an order, that order has effect as if it were made

under rule 645 for an estate account to be filed, assessed and passed.

The account assessor then determines the procedure to be adopted in respect of the

assessment. Rule 651 governs the procedure on assessment.

Once the assessment is complete the account assessor will issue a certificate, which must be

filed in a court within 14 days of completion of that assessment and a copy provided to each

party (rule 657(4)).

The parties to the application are all persons to whom the court has directed that the notice

of the application for an order that an estate account be assessed and passed, be given to

(rule 644).

A party may request reasons for the account assessor’s decision within 14 days of receiving

the account assessor’s certificate. Those reasons must then be provided within 21 days, with

the party requesting the reasons paying the account assessor’s costs (rule 657A).

Where a trust that has been created pursuant to a will is to be administered by the personal

representative, an application for commission by the personal representative in their

capacity as trustee can be made and a similar process applies.

Rule 648(2) provides that if a person is the personal representative of a deceased individual

and trustee of an estate of the deceased individual, the person may include in the same

estate account a statement of the administration of the estate, both as personal

representative of the deceased individual, and as trustee of the estate of the deceased

individual.

The estate account however must identify the property received and disbursed by the person in

each capacity.

The originating application

The application is an Originating Application made pursuant to UCPR 26 – see the guide for

Originating Application – Executor commission.

The application seeks orders that the personal representatives be allowed commission for

their pain and trouble in connection with their administration of the deceased estate; and

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where appropriate the costs of preparing filing and having passed the accounts of the

estate, with such costs to be paid out of the estate.

While rule 657C notes the application for commission is to be made to the court, where the

application is unopposed the registrar is able to deal with the application, which is the usual

case.

The affidavit supporting the originating application

The affidavit outlines the assets and value of the estate and the beneficiaries.

It then particularises the pain and suffering put to in undertaking the administration.

The details of the administration should include the work that has been carried out; the

attendances on legal advisors, accountants and other professionals; and what has been

done in protecting, managing and winding up the estate’s assets and liabilities.

The application and supporting affidavit are served on any beneficiaries whose interests are

to be effected (r 27). On the return date of the application you would appear before the

registrar who would then make the appropriate orders.

The registrar will order the costs of the application, in the usual course, be paid on an

indemnity basis out of the estate’s assets.

Application pursuant to rule 10

An application to the court pursuant to rule 10 is only made in unusual circumstances – for

example, if the time and expense of passing the estate accounts were not justified because

of the small size of the estate. This procedure was used in Re Lack (1983) 2 Qd R 613.

If an application is made to the court, the following steps need to be taken:

1. prepare and file an application pursuant to rule 10 (Form 5) of the Uniform Civil

Procedures Rules (see guide for Originating Application – Executor commission);

2. file supporting affidavit (same as for affidavit pursuant to r 646) (see rule 657C(2));

3. serve the application upon any beneficiary affected by the order.

The court may direct the application to be served upon other persons as well.

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An estate account does not need to be filed, assessed or passed before the application is

determined, but the court may order that to occur and adjourn the application for

commission until the estate account has been filed, assessed and passed (rule 657D Uniform

Civil Procedure Rules).

Again in deciding the application for commission payable to a trustee of the estate, the

court will take into account:

‒ value and composition of the estate;

‒ the provisions of the will;

‒ conduct of all persons connected with the administration of the estate;

‒ nature, extent and value of work done by persons other than the trustee;

‒ objections raised before the estate account is passed;

‒ the efficiency of the administration of the estate.

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Estate taxes, superannuation and deeds of family arrangement

Estate taxes and duties

Taxation generally

If you do not practise in this area, the best advice you can give the client is to seek appropriate

information and guidance from his/her accountant or taxation adviser before assets are

redeemed or transferred, and ensure that the client does so. There will be a number of

instances where it will be appropriate, and advisable, to recommend that the beneficiaries

obtain independent legal, taxation, and financial advice as there may be taxation and other

consequences arising from inheritances and they should obtain their own taxation advice in

regard to their inheritance, and any later disposition of the property the subject of the

inheritance.

Filing tax returns

Executors must file a date of death taxation return. The trustees of a deceased estate must

file taxation returns on behalf of an estate where sufficient income has been earned for

taxation to be payable or a refund sought.

Land tax

If a property was the principal place of residence of the deceased, it will be exempt from

land tax until the earlier of the end of the financial year in which the deceased died or

registration of the transmission to the beneficiary. From this point in time land tax accrues.

If the principal place of residence continues to be used as a principal place of residence by a

person given a right to occupy by the will, given a life estate or who is a beneficiary under a

will, then land tax is not payable.

Capital gains tax

A change of ownership due to death is not normally a capital gains tax event. The move of

the asset to the beneficiary through the personal representative is not a disposal. The gain

or loss is taxable when the asset is next disposed of. The inheritance and postponement of

tax can take place several times.

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The exception is a gift to an exempt entity. Exempt entities are charities that are tax-

exempt, non-residents and complying superannuation funds. As these entities do not pay

tax, the capital gains tax crystallises and is payable by the estate on transfer to the exempt

entity. In that case, the estate pays the capital gains tax, unless the gift in the will says that

the tax is payable by the exempt entity.

However, with regard to non-residents, if the gift is of taxable Australian property, which

includes a direct interest in real property, then the exception does not apply. In that case

the position for non-residents reverts to being the same as for residents. So for gifts of

property to non-residents, no capital gains tax is payable by the estate. For gifts of other

assets, including shares, the exception applies and the estate will have to pay the capital

gains tax. Unless the will has specifically provided for this, the effect of a gift of shares, for

example, to a non-resident is that all the beneficiaries share the burden of paying the capital

gains tax.

Charities that are part of the Cultural Gifts Program including public museums, libraries, art

galleries and the Australiana Fund, whilst not taxable, are not exempt entities for these

purposes and so no capital gains tax is payable by the estate in relation to gifts to them.

Assets acquired before 20 September 1985 are subject to capital gains tax in the hands of

the beneficiaries from the date of death.

Assets acquired after 20 September 1985 are subject to capital gains tax in the hands of

beneficiaries from the date that the deceased acquired them, unless exemptions apply.

For example, if a real estate asset is a dwelling – and especially if it was the deceased’s main

residence – then a CGT exemption may apply, depending on how the deceased has used it.

Likewise, if it has been the beneficiary’s main residence between the date of death and the

date of disposal an exemption may apply. The beneficiary may be able to claim any

exemption either partially or fully, depending upon a number of factors such as the date the

deceased acquired the asset, how they used it, whether the disposal by the beneficiary is

within two years of the date of death and whether the property has been used to produce

income between the date of death and the date of disposal.

Any capital gains tax liability is assessed on the difference between the cost base of the

asset and the sale price. The cost base of an asset depends on when the deceased acquired

the asset. The cost base is not simply the purchase price, but all costs of acquiring the asset.

For example, with residential property, the cost base will usually include stamp duty and

legal fees, interest on any loan funds used for the purchase and the costs of any repairs and

improvements. For assets acquired by the deceased after 20 September 1985, the estate

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effectively inherits the deceased’s cost base and that is the starting point for assessment of

capital gain.

For assets acquired by the deceased before 20 September 1985, being pre-CGT, there is no

‘cost base’ as such, so market value as at the date of death is used to determine the

acquisition value of the asset – and therefore the cost base of the asset – to the estate or

beneficiary who assumes the liability for paying CGT when the asset is ultimately sold.

The main residence, even if purchased after 20 September 1985, does not attract capital

gains tax if sold within two years after the date of death, assuming a beneficiary or

purchaser does not continue the main residence exemption.

If assets are held for 12 months or more before they are sold, the net capital gain is reduced

by 50%. In the case of deceased estates, the holding period is taken to have commenced

when the deceased acquired the asset except for assets acquired before 20 September

1985, in which case the holding period commences on the date of death.

Life interests and rights to occupy are ownership interests that continue the main residence

exemption.

So far as the capital gains tax result of survivorship is concerned, joint tenants are treated as

tenants in common with an equal interest in the asset. The survivor is deemed to have

acquired the half share of the deceased at the date of death. The severance itself has no

capital gains tax consequence. When the survivor sells, if the half share of the deceased was

acquired before 20 September 1985, then capital gains tax accrues from the date of death

onwards. If acquired after 20 September 1985, then capital gains tax accrues from the date

of the cost base forwards.

If a property passes to a beneficiary by agreement of all beneficiaries then any capital gains

tax liability is effectively rolled over. However, if a beneficiary is given an option in the will to

acquire a property, then capital gains tax applies to the sale. The testamentary option works

to give the property to the beneficiary on its exercise free of debt but with the price coming

into the estate for distribution and subject to capital gains tax.

Shares

If shares are to be sold by the executor and not transferred directly to the beneficiaries, any

capital gain or loss on the disposal must be included in the tax return for the deceased

estate. Any capital gains tax is an estate liability which needs to be paid out of the proceeds

of the sale of the shares and then the balance is available to be taken into account as an

asset of the estate to be distributed in accordance with the will.

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As noted above, gifts of shares to exempt entities, including non-residents, will also require

the estate to pay any applicable capital gains tax.

Foreign resident capital gains withholding payments

The foreign resident capital gains withholding payments provisions of the Taxation

Administration Act 1953 came into force on 1 July 2016 and were amended on 1 July 2017.

Essentially, when a property with a market value of $750,000 or more is transferred, the

transferee is required to withhold 12.5% of the purchase price and remit this sum to the

Australian Taxation Office (ATO) unless the transferor provides a clearance certificate to the

transferee.

Property transferred to the executor, beneficiary, or surviving joint tenant

Under the legislation the regime would have applied to such a transfer. However, the ATO

has made a determination that the amount of the withholding payment is varied to nil

where the transfer, as a result of the death of an individual, is to:

− the legal personal representative;

− a beneficiary by way of direct transfer from the deceased or by transfer from the legal

personal representative; or

− a surviving joint tenant.

Property is sold by the executor

If the property is to be sold, or otherwise transferred by the executor, then the foreign

resident capital gains withholding payments regime applies and the executor must obtain a

clearance certificate from the ATO on behalf of the deceased.

Whether the deceased was a resident or foreign, if the real property has a market value of

$750,000 or more, the executor will need to apply for a clearance certificate from the ATO

and provide this to the transferee to ensure no withholding payment is required to be made

to the ATO. This is because there is a presumption that the transferor is foreign unless they

have a clearance certificate.

If the deceased is a foreign resident at time of death, the executor can apply for a variation

on behalf of the deceased to vary the withholding amount to nil on the basis that any capital

gains tax arising is disregarded by law.

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Stamp duty

The Duties Act 2001 (Qld) provides an exemption from transfer duty where dutiable

transactions are made to the extent that it gives effect to a distribution in the estate of a

deceased person. See DA 124.1.1.

Duty on motor vehicles

Stamp duty and transfer fees do not apply to the transfer of registration of a vehicle forming

part of a deceased estate if the vehicle is transferred into the name of one of the following:

- a beneficiary in a will;

- the personal representative of an estate.

A certified copy of the will must be provided as evidence of the entitlement to the motor

vehicle.

Superannuation death benefits

On the death of the member, benefits can only be paid to the estate of the member or a

dependant of the member or a person in an interdependency relationship with the

deceased, being a close personal relationship between two people who live together where

one or both provides for the financial, domestic and personal support of the other.

A dependant principally means a spouse, children, or any person who is in fact dependant

on the member for financial support. However there are adverse tax consequences in

paying the death benefit to children over the age of 18.

Whilst a Superannuation Industry Supervision (SIS) dependant includes a spouse, all children

(irrespective of age) and any person with whom the deceased had an interdependency

relationship. A tax dependant is limited to a spouse, children under 18 years at the time of

death, any person with whom the deceased had an interdependency relationship and

anyone who was financially dependent on the deceased at the date of death.

For matters to be taken into account in determining whether an interdependency

relationship exists refer to Superannuation Industry (Supervision) Regulation 1994

Regulation 1.04AAAA.

The taxation of superannuation death benefits is anomalous because if a member withdrew

their superannuation benefits from the fund before they died and they were over the age of

60, then no tax would be payable. However, if the benefits were left in the fund at their

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death and the funds then distributed to a non-tax dependant such as an adult child, then

the taxable portion of the benefits (all of the concessional contributions and earnings) will

be subject to 16.5% tax in the adult child's hands.

Some people who are aware that they have a terminal illness may choose to withdraw their

superannuation before their death to prevent this tax being incurred. Withdrawing amounts

from superannuation has its own risks. Once the amounts have been withdrawn there can

be difficulties due to age and contribution limits in putting the funds back into

superannuation.

So where both spouses are still living, usually it is best to give the surviving spouse discretion as

to where to pay the superannuation death benefit. They can leave it in the self managed

superannuation fund or usually pay it to themselves tax free. Other assets can be given to other

beneficiaries such as adult children to gain a better tax outcome. This does not usually work

however where there are children from another relationship.

Leaving superannuation death benefits to the estate requires care. If the only beneficiaries

of a deceased estate who can benefit from a superannuation death benefit are people who

were or are tax dependants of the deceased, the executor of the estate is treated as

receiving the superannuation death benefit as a tax dependant would have received it - that

is, tax free. However, if one or more of the beneficiaries of a deceased estate who can

benefit from a superannuation death benefit are people who were not or are not tax

dependants of the deceased, the executor is not treated as receiving the superannuation

death benefit as a death benefit dependant would have received it and is liable to 16.5% tax

on the taxable portion of the benefits (all of the concessional contributions and earnings). In

such cases if a deceased wants the superannuation to pass into the estate a 'superannuation

proceeds trust' is required to ensure only tax dependants can benefit from the

superannuation death benefits so they are not subject to tax.

Two cases with dire consequences for want of a binding nomination

Ioppolo & Hesford v Conti [2013] WASC 389 highlights the issues involved in estate planning

where there are significant superannuation assets. Mrs Conti died with a significant balance in

her self managed superannuation fund account. Her husband was the co-trustee and the

other member. Prior to her death Mrs Conti had previously signed several non-binding and

binding nominations in favour of her husband; however, these had lapsed. In her will, Mrs

Conti directed that her superannuation be paid to her children and that none of it should be

paid to her husband. Mr Conti, as the sole trustee of the self managed superannuation fund,

resolved to pay her entire benefit to himself. Mrs Conti's children challenged this decision in

the Supreme Court. The court held that the trustee of the self managed superannuation fund

could pay the death benefit to Mr Conti, and the children failed in their application.

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Another example of trustees not acting as desired by the deceased occurred when a trustee

opted to pay the estate rather than the children of the deceased. If the trustee had enquired

it would quickly have been established that the estate was insolvent. The result was that the

proceeds of the superannuation went to a creditor bank and the children received nothing.

As a matter of interest it is normal practice for trustees not to pay the proceeds of

superannuation to an insolvent estate. The trustee in fact has a duty to act in the best

interests of the beneficiaries which is clearly not the case of payment to an insolvent estate.

If you examine the wording of Division 6.2 of the Superannuation Industry (Supervision)

Regulations 1994 you will find a duty to enquire. Trustees should not pay benefits to an

insolvent estate. A central attribute of superannuation trusts is the inability of creditors to

access members' accounts.

Deeds of family arrangement

Prior to preparing a deed of family arrangement, some research must be carried out to

ensure a client is advised of all the potential consequences, including the implications and

requirements of any applicable taxation or duty issues, and the effect on any duty

exemptions which might otherwise apply.

The usual rule is that a change of ownership due to death is not normally a capital gains tax

event. The move of the asset to the beneficiary through the personal representative is not a

disposal. The gain or loss is taxable when next disposed of. The cost base is the date of

death in the case of the asset being acquired before 20/9/1985 or being the main residence

of the deceased otherwise the cost base is the date of acquisition by the deceased. The

inheritance and postponement of tax can take place several times. The exceptions are gifts

to exempt entities which are charities that are tax-exempt, non-residents and complying

superannuation funds. As these entities do not pay tax, the capital gains tax if any

crystallises and is payable by the estate on transfer to the exempt entity.

The following section of the Income Tax Assessment Act 1997 and paragraphs 33 & 34 of tax

ruling 2006/14 are reproduced in full as a reminder of the circumstances in which the usual

CGT rules apply to changes made by Deeds of Family Arrangement and by deduction when

they do not apply.

Section 128.20(1)(d) of the Income Tax Assessment Act 1997 defines when an asset passes

to a beneficiary under a deed of arrangement as follows:

(1) A CGT asset passes to a beneficiary in your estate if the beneficiary becomes the

owner of the asset:

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...

(d) under a deed of arrangement if:

(i) the beneficiary entered into the deed to settle a claim to participate

in the distribution of your estate; and

(ii) any consideration given by the beneficiary for the asset consisted

only of the variation or waiver of a claim to one or more other CGT

assets that formed part of your estate.

(It does not matter whether the asset is transmitted directly to the beneficiary or is

transferred to the beneficiary by your legal personal representative.)

(2) A * CGT asset does not pass to a beneficiary in your estate if the beneficiary

becomes the owner of the asset because your * legal personal representative

transfers it under a power of sale.

Paragraphs 33 and 34 of tax ruling 2006/14 clarify the law as follows:

33. Beneficiaries in a deceased estate who have been granted life and remainder

interests may be dissatisfied with the provision that the deceased person made

for them under their will. The beneficiaries may enter into a deed of arrangement

under which they agree to share the deceased's assets rather than their life and

remainder interest.

34. Assets may pass to them as a beneficiary in the estate under paragraph 128-

20(1)(d). If this occurs, there will be no consequences for the life and remainder

interests as the intended owners of those interests are treated as if they had not

been bequeathed them.

The remaindermen are effectively transferring an interest in realty and therefore stamp duty on

the value of that interest is payable by the life tenant. Valuations will be required to establish

the value of the interest transferred.

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Dealing with assets/administration

Dealing with assets

Depending upon the nature of the estate and the sophistication of the legal personal

representatives, some legal personal representatives may wish to deal with administration

themselves, setting up an interest bearing estate account to consolidate funds before

distribution, and so on.

However, many may wish to attend to administration with the assistance of their lawyers.

It is not possible to detail every possible scenario which may arise; however, the following

are points to consider.

Trusts

Do the terms of the will require the executors to establish a formal trust?

If so, see By Lawyers Companies, Trusts, Partnerships & Superannuation guide, which

provides detailed commentary and precedents, including trust deeds, for:

− discretionary trusts;

− family trusts;

− special disability trusts.

Sale of assets

Are the assets to be sold, or transferred in specie?

Is any business being continued for realisation or as a going concern, and is there any

potential liability?

If assets are to be sold then what is the proposed timing - real estate, shares, et cetera?

Note that the lawyer is not a real estate agent or stockbroker. The executors must seek

relevant expert advice and then make their own informed decision.

Will assets be safely held in the meantime, and are they insured?

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Check the terms of any policy of insurance in respect to real estate/improvements. The

policy may not provide cover for extended vacancy periods, and insurance over any other

assets also needs to be checked.

Distribution by transfer or otherwise

Check the will or intestacy provisions as applicable.

When is this to occur, allowing, at a minimum, for the ‘six month’ rule?

Have debts and liabilities been ascertained as far as possible, with no potential claims

pending?

Are all the beneficiaries certain?

Are any beneficiaries minors?

Are there to be any interim distributions?

If insurable assets are to be transferred in specie, e.g. real estate or motor vehicle, ensure

the beneficiary is advised they must take out insurance in their own name before

considering cancellation and refund of existing insurance.

Taxation

See Estate taxes above for discussion on estate taxes, land tax, capital gains tax and stamp

duty.

Have the executors received advice from a qualified taxation adviser on the timing of

redemption of assets/investment? Some taxation advisers, depending upon the

circumstances, may advise that real estate should be held in the estate for a certain period.

Some taxation advisers may also advise that funds be held in trust without accruing interest,

rather than be invested.

Investment

If assets are already held in interest bearing accounts, is there any benefit or detriment, in

terms of interest and/or taxation, in closing accounts and transferring the funds to trust or

to a consolidated account?

Are there any will provisions in relation to investment?

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Is the investment by the legal personal representatives or trustees?

What type of account needs to be set up for any money received? Is it to be invested?

The executors should consider any applicable ‘locked in’ investment periods in terms of

distribution, timing and payment of ongoing debts and liabilities.

Debts

Have all known debts been paid?

Consider creditors’ notices.

Is sufficient money available and accessible for payment of ongoing debts and liabilities – for

example, taxation, rates and taxes on real estate, accountancy fees, legal fees, share

management portfolio fees?

Are any other liabilities likely?

Accounting

Do you have a distribution statement – in addition to trust statements – showing all assets

received in and liabilities paid out, which can be updated on an ongoing basis?

Consider maintaining a working draft by way of a running spreadsheet.

Is there a possibility of accounts having to be filed with the court?

Costs

Have you provided adequate costs disclosure covering anticipated administration costs as

well as obtaining a grant?

Uncertainty

If there is any uncertainty, do court directions need to be obtained?

Transfers of real property

A request to record death will be necessary to transfer any jointly owned property to the

surviving proprietor.

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Property owned solely by the deceased or as tenants in common may need to be

transferred into the executor’s name. A transmission application should be lodged and the

executor can then sell, transfer or otherwise deal with the property in accordance with the

will. It is possible to lodge a transmission application to transfer the property directly to a

beneficiary if appropriate.

Online transmission applications

Transmission applications can be done online. Transfers recording a transferee – that is, the

executor - as trustee can be lodged electronically. To do this only details of the trust will be

required – that is, as executor pursuant to grant of probate.

For consistency in paper the Titles Registry introduced the Trust Details form, on which the

basis of the trustee transfer can be noted. Transmission applications that are supported by a

grant from a foreign jurisdiction that is eligible for re-seal in Queensland under the British

Probates Act 1898 (a Queensland recognised grant) that have not been resealed in

Queensland are now made on a form 5.

While a form 1 Transfer is available through PEXA and eLodgement, forms 5 and 5A can only

be lodged through eLodgement. See Electronic lodgement of title transactions

(eLodgement) for details of what forms can be lodged and how to use eLodgement.

Transitional provisions – Forms 5 and 5A

Until 30 September 2018 version 6 of the form 5 and version 7 of form 5A can still be used.

From 1 October 2018 only the latest versions of form 5 (version 7) and form 5A (version 8)

will be accepted.

Transmission application for registration as devisee/legatee

It is possible to lodge a transmission application to transfer the property directly to a

beneficiary if appropriate.

Estate taxes and duties

See Estate taxes and duties above for information on land tax, capital gains tax, foreign

resident capital gains withholding payments and stamp duty.

e-Conveyancing

The ability to complete a transmission application or request to record death will be added

to PEXA. Read the By Lawyers paper A brief explanation of the transition to E-conveyancing

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which includes information on how to get connected and the full timeline for

implementation.

Verification of identity

Should the estate assets include real estate, verification of identity requirements must be

met.

For commentary and precedents see matter plan folder Verification of identity in Dealing

with assets/administration.

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Distribution

Payment of debts

As a general rule all of the property of the deceased is available to pay the debts of the

estate including funeral costs, other testamentary expenses and any other debts which have

been incurred. The executor’s most significant duty in administering the deceased’s estate is

to pay the deceased’s debts.

It is imperative that the executor’s determine at the outset whether the estate is solvent or

insolvent or at risk of becoming insolvent.

If the Official Trustee in Bankruptcy is administering the deceased’s estate at the time of

death, the deceased’s assets will vest in the Official Trustee in Bankruptcy so that

administration of the estate is effectively removed from the personal representative. The

deceased’s debts will then be paid as determined by the Bankruptcy Act 1966 (Cth).

Where a deceased estate may be insolvent but there has been no formal sequestration

order made that has placed the estate in the hands of the Official Trustee in Bankruptcy, ss

57 and 58 of the Succession Act apply.

Insolvent estate

Section 57 of the Succession Act provides where the estate of a deceased person is

insolvent:

(a) the funeral, testamentary and administration expenses have priority;

(b) the rules and rights of creditors, regarding debts and provable liabilities and priorities

of debts and liabilities, are the same as for the law of bankruptcy.

The executor has protection where payment is made, thereby preferring a creditor, when

the executor had no reason to believe the estate was insolvent. If it is subsequently

apparent the estate was in fact insolvent, the executor is exonerated and not liable to

account for the preferential payment.

The executor is protected in respect of any payment or transfer of property made in good

faith before an order for the administration of a deceased’s person estate under the

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bankruptcy laws. That protection will not be applicable however where the transfer or

payment occurred after:

‒ the executor became aware a bankruptcy petition had been served on the deceased;

‒ the executor is served with a bankruptcy petition;

‒ the executor presents a bankruptcy petition.

Section 247 of the Bankruptcy Act 1966 allows the person administering the estate to apply

to appoint a bankruptcy trustee when they conclude that the estate is insolvent. For

intestate estates, an application for Letters of Administration is required for a Legal Personal

Representative to be appointed before an application for the appropriate order to bankrupt

the estate can be made.

If the estate is administered by a trustee in bankruptcy it is administered in accordance with

the bankruptcy rules under the Bankruptcy Act 1966 and the Legal Personal Representative

does not take part in the administration of the estate.

Solvent estate

With solvent estates, the issue is to determine out of which class of assets a debt must be

paid.

The statutory order of application of assets for the payment of debts is set out in s 59 of the

Succession Act:

‒ class 1 – property specifically appropriated for the payment of debts; and property

charged with, or devised or bequeathed subject to a charge for the payment of debts;

‒ class 2 – property comprising the residuary estate of the deceased;

‒ class 3 – property specifically devised or bequeathed;

‒ class 4 – donationes mortis causa.

Assets in the same class contribute to a debt in proportion to their value.

Provisions in the will may displace the statutory order and stipulate the order the burden of

debts is to be borne or apportioned. However, if the provisions do not achieve this, then the

statutory order must be followed.

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Property bequeathed subject to payment of debts (class 1) is the first to be applied to the

payment of debts. Property remaining that is undisposed of after payment of all debts forms

part of the residuary estate. If class 1 is not sufficient to meet payment of all debts, then

class 2 applies. The residuary estate, as defined by s 55, is applied to the payment of debts.

If debts still remain unpaid after exhausting all assets in classes 1 and 2, assets in class 3 are

then applied. If the assets in class 3 are still insufficient, then gifts made in anticipation of

death (class 4) may be applicable.

Section 59(2) introduces the concept of rateability. Where assets in a particular class are

applied to the payment of debts, the assets within that class abate rateably, as regards to

the beneficiary’s entitlements.

The effect is that each beneficiary receiving the asset within that class will rateably pay the

debt against their respective entitlements in that class.

The rateability principle applies to all classes of debt.

The order in which the estate assets are to be applied to meeting payment of the debts, and

the rateability between different properties within each class are all capable of variation by

a clear contrary intention being expressed in the will.

Despite the statutory order or provisions in a will, the duty of the administrator to pay debts

on time allows them, where necessary, to apply the most readily available assets to satisfy

the claims of creditors. When assets are applied out of the appropriate order an adjustment

must be made between beneficiaries so that the proper order of liability is re-established.

This is called ‘marshalling’.

Mortgaged property

Section 61 provides that where a property is subject to a debt secured by mortgage or

charge, that property is responsible for meeting payment of that debt in lieu of being paid

out in the order of the four classes at s 59.

If the secured debt exceeds the property over which the security is held, the excess must

then be paid out of the general estate in the order dictated by s 59. Again the testator may

vary this provision by expressing a clear contrary intention in the will.

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Estate fees

There are no mandatory legal fee scales for estate matters in Queensland. Fees should be

agreed and disclosed via a client service agreement and disclosure notice. Lawyers may wish to

charge the scale rate set out in Schedule 1 of the Uniform Civil Procedure Rules 1999. In the

absence of a client service agreement and disclosure notice, legal fees may have to be assessed,

and the Schedule 1 scale is used for this purpose. While these fees are not regulated, the court

will only allow reasonable legal fees to be paid out of the estate.

Note that reference has not been included here to scales which may apply in contested

matters – see, for example, Family Provision Claims (QLD).

Filing and search fees are set out in Schedule 1 of the Uniform Civil Procedure (Fees)

Regulation 1999.

With ‘complicated’ or drawn out estates in particular, the lawyer may wish to consider

obtaining a certificate from a costing service at his or her cost. There are two reasons for

this:

(a) attaching the certificate to the lawyer’s invoice may minimise the possibility of a

dispute, assuming of course that proper costs information has been provided at the

outset, and that the invoice itself contains information sufficient to enable the client

to understand the work carried out; and

(b) unless the lawyer regularly costs files, it is possible to ‘miss’ chargeable items, and

allowable charges may at least equal or could exceed the lawyer’s cost of obtaining

the certificate.

Distribution

The executor should consider whether any actions are still on foot, in respect to which the

decision of Stanford v Stanford [2012] HCA 52 is noted. See also r 71 Defendant or

respondent dead at start of proceeding Uniform Civil Procedure Rules 1999 (Qld).

Any orders or binding agreements made pursuant to the Family Law Act 1975 (spouses or de

facto partners) or the Civil Partnerships Act 2011 affecting the assets must be considered.

A notice to creditors must be published in a local paper – the same paper used to advertise

the Notice of Intention to Apply for Grant – in order that all liabilities are accounted for prior

to distribution. Additionally, care must be taken to avoid the legal personal representative

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being held personally liable for any potential family provision claims in the case of an early

distribution - that is, before at least six months has elapsed from the date of the grant, or

any period extended by the court - and/or a distribution whilst on notice. See ss 41 and 44

Succession Act 1981.

For further information on testators’ family maintenance claims see Family Provision Claims

(QLD), including general case notes on testators’ family maintenance and estate matters.

Also of note are the Uniform Civil Procedure Rules 1999 (Qld), particularly Chapter 15

Probate and administration, and trust estates.

In respect to dispositions, including dispositions to issue, particularly refer to Part 2 Wills,

Division 5 Interpretation of wills of the Succession Act 1981 (QLD).

Interim distribution

Depending on the circumstances of the estate it may be appropriate to make an interim

distribution to the beneficiaries of part of their entitlement.

Keeping in mind s 44, the executor should only do so if they are certain that the estate

retains sufficient funds to cover all liabilities and the final distribution.

Specific gifts

A specific gift is a gift of a distinguishable part of the estate, for example, ‘my cricket bat

collection’ or ‘my shares in Company Pty Ltd’.

Specific gifts do not carry interest but carry immediate income. All income produced by the

property that forms the gift from the date of death belongs to the beneficiary. It follows that

the liabilities and upkeep for the subject property are payable by the beneficiary.

Unless the contrary is expressed in the will, the cost of transferring the property to the

beneficiary is payable by them and they take the gift subject to any mortgage.

Ademption

If the subject of a specific gift is no longer owned by the testator at the time of their death

or cannot be found, then it will fail by ademption. The beneficiary is not entitled to trace the

proceeds of sale of the asset and claim a right to any new asset in which those proceeds

have been invested. However, changes in name or form only will not cause a gift to adeem,

for example, a change of name of a company in which shares are owned.

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General legacy

A general legacy is a gift that does not refer to the testator’s actual property, for example, a

basic monetary gift of ‘$1,000 to my son’.

General legacies carry interest from the date on which the legacy is payable but do not carry

income. Absent any contrary indication in the will, the legacy is payable one year from the

testator’s death, known as the executor’s year.

Abatement

Where the estate is insufficient to pay all of the legacies in full each general legacy will abate

rateably, unless the testator made clear a priority. Abatement operates to ensure the

beneficiaries receive their proportionate gifts.

Residuary gifts

The residuary is the estate remaining after payment of all debts and expenses and the

distribution of all specific bequests and legacies. Specific bequests or legacies that fail

usually fall into the residue also.

Personal representatives and class gifts

In relation to beneficiaries as a class, whether in the will or pursuant to an intestacy,

personal representatives may be personally liable if they are on constructive notice of the

members of a class. For instance, a gift to my children would include any ‘illegitimate’

children. A gift to brothers and sisters or a distribution to a class on intestacy raises the

same considerations.

Accounts

Keeping proper accounts

Executors should be aware of r 648 Requirements of estate accounts Uniform Civil

Procedure Rules 1999 and the necessity to maintain complete and accurate administration

records.

In order to maintain complete and accurate accounts the executor should:

− keep a trust account, separate from other matters;

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− ensure that particulars of receipts and payments are supported by vouchers and are

available for inspection; and

− ensure that the particulars contain information as to the amount and state of the

assets and property, and disclose particulars of liabilities.

In addition to the obligation to keep proper accounts the executor may be required to file,

assess and pass the accounts. See UCPR Chapter 15 Part 10.

Assessment of accounts

When the court assesses accounts they act as an auditor of the accounts kept by the

executor, checking if the disbursements have been paid, that proper vouchers and receipts

have been kept, and that the disbursements have been properly incurred. It is a detailed

accounting process and avoided if at all possible as it adds to the cost of administration and

delays finalisation of the estate. See UCRP 651 for the procedure on assessment.

A beneficiary concerned with the administration of the estate may apply to the court for an

order that the accounts be assessed. Accounts are also often filed, assessed and passed

where the executor is making a claim for commission which the beneficiaries do not consent

to.

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Finalising the matter

The included sample letters are basic in design, and will need to be adapted to suit the

particular situation. Even where a formal administration account is not necessary in the

circumstances of the matter, it is suggested that preparation of a distribution statement will

be of benefit to executors and beneficiaries alike and that such a statement should be

forwarded to the beneficiaries for approval before distribution is actually made.

Firms with trust bank accounts must note section 58 of the Legal Profession Regulation 2017

and section 258 of the Legal Profession Act 2007 in relation to finalising the matter and

withdrawing trust money for legal costs.

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Further information

OTHER TRUSTED AND USEFUL RESOURCES

Wills and estates (probate) – Supreme Court of Queensland

Taxes, royalties & grants - Office of State Revenue

Transferring registration from a deceased registered operator – Department of Transport and Main Roads

Succession law resources – Queensland Law Society

ATO – Deceased estates

RELATED BY LAWYERS PUBLICATIONS

Family provision claims (QLD)

Wills, Powers of Attorney and Advance Health Directives (QLD)

Motor Vehicle Accident (QLD)

Workers Compensation (QLD)

Papers and Articles – Wills and Estates

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