Do All Wills Need to Go Through Probate in Australia?
Not always. Probate is the legal process that confirms a will’s validity and gives the executor the authority to manage and distribute the estate. But in Australia, whether probate is required depends on how the assets were owned, their total value, and the policies of banks or institutions involved.
If the estate includes real estate, large bank balances, or investments held solely by the deceased, probate is usually required. If all assets are jointly owned or modest in value, probate may not be needed. This guide explains when probate is necessary, when it can be avoided, and what steps executors must take when managing an estate in Australia.
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When is Probate Required in Australia?
Probate is a court order through which the executor obtains legal authority to administer and distribute the estate.
Here are some key instances when probate may be necessary:
- Large Assets Owned Solely by the Deceased: Probate is generally required if the deceased owned large assets solely in their name. This includes properties, bank accounts, and investments not held jointly with another person.
- Real Estate Owned by the Deceased: If the deceased owned real estate (either solely or as tenants in common with someone else), probate will be required to transfer the property. Real estate ownership (either solely or as tenants in common with someone else) makes probate necessary.
- Assets with a certain value: When the value of an asset (such as a bank account) exceeds certain thresholds, financial institutions and other entities often require probate before releasing funds or transferring ownership.
- Third-Party Requirements: Some organisations, such as superannuation funds and insurers, may require a probate grant to release the policy’s proceeds to the estate and its legal personal representative.
- Executor Wants Added Protections: Probate gives the executor the legal authority to manage and distribute the estate according to the terms of the will. Applying for probate can give the executor added protection compared to if they dealt with the assets without a grant of probate.
Situations Where Probate may Not be Required
Not all estates require probate in Australia. Several examples include:
Jointly Owned Assets
Where the deceased owned assets jointly with another person (such as real estate owned as joint tenants) or bank accounts held jointly, that asset will pass to the surviving joint owner under the rule of survivorship. Common examples include real estate owned as joint tenants or jointly held bank accounts. In the case of real estate, where property is held as joint tenants, the surviving joint tenant can become the sole owner upon lodgment of a Notice of Death with the relevant Land Titles Office. In the case of bank accounts, the surviving joint owner can become the sole account holder upon the deceased’s death certificate being provided without the need for probate.
Small Estates
Where the deceased’s only assets are personal possessions, cars and a modest amount of money in Australian bank accounts, probate may not be required. This is because ownership of the deceased’s possessions generally passes with possession (rather than formal registration), and each bank has its threshold for requiring probate. For example, some banks allow up to $100,000 to be withdrawn without the need for probate.
Assets Held in Trust
Assets held in trust do not form part of the deceased’s estate unless certain circumstances apply. Examples of assets held in trust include superannuation and family discretionary trusts.
In the case of superannuation, the deceased has the ability to choose who will receive the proceeds upon their death by preparing a death benefit nomination form naming the chosen beneficiaries. The deceased also has the option to direct some or all of the proceeds of a superannuation account to be paid into their estate by nominating their Legal Personal Representative as the beneficiary.
In the case of a discretionary trust, the trust assets will continue to be managed in accordance with any existing Trust Deed.
Assets held in trust do not require probate unless the proceeds are paid into and become part of the deceased’s estate and exceed certain thresholds.
The Probate Process Explained
The probate process involves several steps to ensure the deceased person’s estate is administered and distributed according to their will or, if there is no will, according to law. These steps generally include:
- Obtain the Death Certificate: The first step is to obtain a certified copy of the death certificate issued by the registry of births, deaths, and marriages. This document is necessary to apply for probate and to administer the estate.
- Locate and identify the Last Will: The deceased’s family will usually need to locate and identify the deceased’s last will. The executor in the last will has the right (but not obligation) to apply for probate and administer the estate.
- Identify the Deceased’s Assets and Liabilities: An executor who accepts the role is responsible for identifying the deceased’s assets and liabilities.
- Apply for a Grant of Probate: Once the executor has identified all of the deceased’s assets and liabilities, they will need to decide whether to apply to the appropriate Supreme Court for a grant of probate. If probate is required, the executor can apply for probate by applying to the Supreme Court. An application requires the lodgment of prescribed documents, including, but not limited to, the original will, a certified copy of the death certificate, and an executor’s affidavit.
- Notification and Advertisement: Some states require the executor to notify potential creditors and place a public notice of the probate application, allowing time for any claims against the estate.
- Grant of Probate Issued: If the probate application contains all of the prescribed documents and information, the Supreme Court may then issue a probate grant, giving the executor legal authority to administer the estate.
- Administer the Estate: Once probate has been granted, the executor can collect the deceased’s assets, pay any liabilities, lodge tax returns, and distribute the estate in accordance with the will.
- Seek Legal Advice: Throughout the process, an executor may require legal, tax and financial advice to ensure compliance with all legal requirements and handle any potential complications.
The Key Takeaways
Probate is not required for all wills, and the need for probate usually depends on the size and nature of the estate.
Probate is necessary where the deceased held real estate (either solely or as Tenants in Common with someone else), where the deceased died with large amounts of money in the bank, or where specific asset holders require proof of probate.
Probate may not be required where the deceased held property as Joint Tenants with another person (as the property will pass to the Joint Tenant under the rule of survivorship), where the deceased died with only personal possessions and a modest amount of money in the bank, where the value of the assets is small, or where all the deceased’s assets (other than personal possessions) were ‘owned’ in a family discretionary trust.
It is important to seek legal advice to help navigate the probate process and ensure proper estate administration.
Frequently Asked Questions
When is probate required for a will in Australia?
Probate will usually be required whether the deceased held real estate (either solely or as Tenants in Common with someone else), where the deceased died with large amounts of money in the bank, or where specific asset holders require proof of probate.
Do I need a grant of probate to access bank accounts?
In short, it depends on the policy of the specific bank.
Each bank will have its internal policies setting out what can be done without a grant of probate and when probate is required. For example, some banks allow access to bank accounts holding up to $100,000 without a grant of probate, whereas other banks may have a lower threshold before a grant of probate is required.
How do I apply for probate in Australia?
The named executor may apply for probate by lodging an application with the appropriate Supreme Court (i.e. the NSW Supreme Court). The application must be supported by the prescribed documents, including, but not limited to, the original will, a certified copy of the death certificate, and an executor’s affidavit. As requirements vary between states and territories, an executor must seek legal advice before lodging the application.
Is a grant of probate required to make a life insurance claim?
A grant of probate may be required to make a life insurance claim, depending on the insurer’s policies and the identity of the nominated beneficiary. If the estate is the beneficiary, the grant of probate provides the executor with legal authority to collect and distribute the proceeds according to the will. If the beneficiary is some other person, that person may be able to access the benefit without the need for a grant of probate or any involvement from the executor. Check with the life insurance company to understand their specific requirements.
Can I avoid probate if the estate is small?
Yes, probate can sometimes be avoided if the estate is small. Financial institutions often have thresholds below which they may release assets without probate. Assets held jointly can often pass directly to the surviving joint owner without probate. Contact each institution holding the deceased’s assets to understand their specific requirements.
What happens if probate is needed but not obtained by the executor?
The executor cannot legally administer the estate if probate is required but not obtained. This can cause delays and disputes, as financial institutions may not be empowered to release or transfer assets without a grant of probate. Beneficiaries may need court intervention to appoint a new executor or administrator (through Letters of Administration). If a beneficiary has concerns about the conduct of an executor, they should seek legal advice to ensure their rights are protected.
If you need help applying for probate or Letters of Administration, contact Empower Wills and Estate Lawyers today.
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Disclaimer: the information in this article relates to NSW law as at the date it was written and is general information only. It does not constitute legal advice and should not be relied upon as legal advice. It may contain information or links to sources which are no longer current. If you have a question or legal issue, we recommend you contact a lawyer and obtain legal advice that takes into account your specific facts, circumstances, needs and objectives.
