Probate & Estate Administration in NSW: A Practical Guide

Introduction

Administering a deceased estate in New South Wales falls to the executor named in the Will, or to an administrator appointed by the Supreme Court of NSW when no Will exists. These representatives must obtain a grant of probate or letters of administration before they can collect assets, pay debts, and distribute the estate to beneficiaries.

The role carries real legal and financial responsibilities for executors, administrators, and family members. This guide explains the core steps of estate administration in NSW so those managing a loved one’s affairs understand their duties and how to meet them.

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Core Roles & Responsibilities

Differences Between an Executor & an Administrator

The first step in understanding estate administration is knowing who is responsible for managing the deceased estate and what authority they have to act. Although executors and administrators have similar responsibilities, their roles arise in different circumstances and involve different legal processes in NSW.

An executor is a person named in a valid Will to administer the deceased estate. After the death, the executor may need to apply to the Supreme Court of NSW for a grant of probate, which formally confirms their authority to act under the Will and deal with the estate’s assets.

An administrator, on the other hand, is appointed by the court when there is no valid Will, or when the named executor is unable or unwilling to act. 

The administrator generally applies for letters of administration and is responsible for collecting and managing the estate’s assets, paying its debts and distributing the remaining estate in accordance with the applicable intestacy rules or other legal requirements.

Key Duties for the Management of a Deceased Estate

The executor or administrator must act with integrity and protect the best interests of the estate. The role involves assessing the value of the estate, managing its assets, identifying beneficiaries and carrying out the deceased person’s instructions where a valid Will exists.

Key responsibilities include:

• preparing an inventory of the estate’s assets and liabilities;
• contacting beneficiaries and providing relevant financial information;
• protecting property and arranging insurance where required; and
• distributing the estate to the rightful beneficiaries after debts and expenses are addressed.

An executor may also need to remain neutral if disputes arise and provide an accounting report of estate administration activities.

Immediate Steps for Family Members Following a Death

Location of the Will & Identification of the Executor

The first step in the estate administration process is to locate the deceased person’s original Will and identify the named executor. The Will records the deceased person’s wishes about property and assets and helps establish who has authority to begin administering the estate.

The original Will or a copy may be held by a family member, the drafting solicitor, or a bank. Common storage arrangements include:

• a solicitor’s safe custody;
• a safe deposit box; or
• a sealed envelope.

If the Will is held in the deceased person’s sole name at a bank, access will usually require:

• written evidence of executorship;
• a copy of the Will, if available; and
• identification.

Procedures When No Valid Will Exists

If no valid Will can be found, the deceased person has died intestate. As a result, an executor cannot be appointed and a grant of probate cannot be sought. The most senior available next of kin who is willing and capable may need to apply to become the administrator of the estate through letters of administration.

Intestacy rules determine how the estate is allocated rather than the deceased person’s personal instructions. The estate will typically pass first to a surviving spouse and children. 

If there is no immediate family, the estate may pass to other relatives under the applicable statutory formula.

The Legal Process for Probate & Letters of Administration

When a Grant of Probate is Mandatory

A grant of probate is usually required before an executor can administer certain assets of a deceased estate. In NSW, probate is required where the deceased person owned real estate solely or as a tenant in common, and may also be required for high-value assets such as shares or bonds.

However, certain assets may be dealt with outside a probate application:

• assets held as joint tenants usually pass automatically to the surviving joint owner and do not form part of the probate application; and
• superannuation may also bypass probate where a binding nomination applies.

Where there is no valid Will, letters of administration are required instead of a grant of probate.

Steps to Apply to the Supreme Court of NSW

An executor seeking probate must notify the Court through the NSW Online Registry, prepare the required documents and provide details of the estate. The application process includes:

• identifying and valuing the assets of the estate;
• preparing the probate application and supporting documents;
• waiting 14 days for creditor objections; and
• filing the original Will with the Supreme Court of NSW.

An application for probate is typically made within six months of the death of the deceased person. Once probate has been granted, the grant provides the authority of the executor to administer the deceased estate.

Where there is no valid Will, or the named executor cannot act, the relevant application is for letters of administration.

Collection of Assets & Settlement of Estate Debts & Taxes

Security of Estate Assets & Valuables

An executor or administrator must find, protect and list the assets of the estate. These may include:

• household and personal goods;
• cash;
• business interests;
• real estate; and
• securities.

The estate representative should contact the following to identify assets and debts:

• financial institutions;
• service providers;
• government departments; and
• relevant companies.

Valuables such as jewellery, ornaments and paintings should be stored safely. Property should also be secured and insured, because the executor may be responsible for damage to property that was not adequately protected.

The Australian Death Notification Service can help notify multiple banks, financial institutions and government agencies through one online notification. This can help stop ongoing debts and payments, such as pensions, after the deceased person’s death.

Clearance of Debts & Finalisation of Tax Returns

Funeral costs, estate debts and other liabilities should be identified and paid from estate funds before assets are distributed. Once all liabilities are accounted for, the executor or administrator can proceed with the distribution authorised by the Will or the applicable intestacy rules.

Tax responsibilities may include:

• submitting tax returns for the estate; and
• declaring inherited assets where the executor is also a beneficiary.

Capital gains tax may arise when estate assets are sold, so records supporting purchase costs, valuations and disposals should be retained.

The Australian Taxation Office tax position should be finalised before distribution. If assets are distributed while tax debts remain unpaid, the executor may become personally responsible for the outstanding amount.

Distribution of the Estate & Management of Disputes for Beneficiaries

Statutory Timeframes for Asset Distribution

An executor or administrator should not distribute a deceased estate earlier than:

• six months after the date of death; and
• at least 30 days after publishing a Notice of Intention to Distribute.

Distribution also depends on:

• a grant of probate or letters of administration being made; and
• all estate debts being paid.

Once these requirements are satisfied, identified assets may be transferred to beneficiaries. Personal property may be distributed:

• as a specific gift;
• as part of the whole estate; or
• as the remainder after other gifts have been dealt with.

Real estate transfers depend on whether the property was owned solely by the deceased person or jointly with another person.

Management of Family Provision Claims & Will Disputes

A Will may be challenged because:

• a family member believes they were not fairly considered; or
• the Will’s validity is questioned.

An eligible person, such as a child, spouse, former spouse or in fact partner, must file a family provision claim within 12 months of the date of death.

An executor must wait until a formal Will dispute or claim against the estate has been resolved by the court before distributing assets. Distributing the estate before the dispute is resolved may affect the proper administration of the estate and the interests of beneficiaries.

Legal Risks & Consequences of Failures by Executors

Personal Liability for Unpaid Debts

As explained above, distributing assets before the estate’s liabilities are paid can make an executor personally liable for estate debts, including tax debts owed to the Australian Taxation Office. Any shortfall may then need to be paid from the executor’s personal funds.

An executor may also face liability where estate assets are not properly protected or are sold below-market value. For example:

• Beneficiaries could seek to recover losses caused by an undervalued sale.
• Damage to unsecured or uninsured property may also result in personal responsibility.

Court Removal for Breaches of Duty

A breach of fiduciary duty may lead to:

• personal liability;
• compensation orders;
• costs orders; and
• removal from the role of executor.

The court may also disallow commission or appoint a substitute where the estate’s administration is at risk.

Delays in starting or completing the administration of the estate can create liability if they cause financial loss. In addition, a refusal to provide an accounting report, or a failure to account for estate assets and liabilities, may also allow a beneficiary to approach the court.

Conclusion

Estate administration in NSW requires an executor or administrator to obtain the relevant authority, identify and protect assets, settle debts and tax obligations, and distribute property only when the required conditions are met. Careful records and attention to probate, letters of administration, beneficiary rights and possible Will disputes can help reduce the risk of personal liability.

With these responsibilities in mind, contact LawBridge’s wills and estate planning lawyers to seek legal advice about probate and estate administration. Law Bridge can provide practical guidance on the applicable process, help address issues affecting the estate, and support a clear path towards completing the administration properly.

Frequently Asked Questions