When Is Probate Required?
When someone passes away, there are often a number of legal and administrative matters that need to be dealt with. One of the most common questions families and executors ask is: when is probate required?
In New South Wales, probate is not required for every deceased estate. Whether you need a Grant of Probate will depend on the assets the deceased owned, how those assets were held and the requirements of the banks, financial institutions and other organisations involved.
In this guide, we explain when probate is required in NSW, when it may not be necessary and what executors should consider before administering an estate.
What Is Probate?
Probate is a legal process that confirms the validity of a deceased person’s Will and gives the executor authority to administer the estate.
A Grant of Probate is issued by the Supreme Court of NSW to an executor named in a valid Will.
Once probate has been granted, the executor can use the Grant to establish their authority when dealing with organisations holding the deceased person’s assets.
Administering the estate can involve:
- identifying and collecting estate assets;
- dealing with property, bank accounts and investments;
- paying outstanding debts and liabilities;
- managing the estate during the administration process; and
- distributing the remaining assets to beneficiaries in accordance with the Will.
Importantly, there is no requirement to obtain probate for every estate in NSW. Whether it is necessary depends largely on the type, ownership and value of the deceased person’s assets.
When Is Probate Required in NSW?
Probate will generally be required where the executor cannot deal with an estate asset without first proving their legal authority.
Some of the most common circumstances include the following.
1. The Deceased Owned Property in Their Sole Name
If the deceased owned real estate solely in their own name, a Grant of Probate will generally be required before the executor can deal with that property.
For example, an executor may need probate before they can transfer or sell a property belonging to the estate.
This is one of the clearest situations in which probate is required in NSW.
2. The Deceased Owned Property as Tenants in Common
Probate is also generally required where the deceased owned a share of real estate as a tenant in common.
When property is owned as tenants in common, each owner has a separate share in the property. When one owner dies, their share does not automatically pass to the other owner.
Instead, the deceased person’s share forms part of their estate and must be dealt with through the estate administration process.
This is different from property owned as joint tenants, which we discuss below.
3. A Bank Requires a Grant of Probate
A deceased person may have money held in:
- savings accounts;
- transaction accounts;
- term deposits;
- investment accounts; or
- other financial products.
Banks and financial institutions have their own requirements for releasing funds from a deceased customer’s accounts.
For smaller balances, a bank may be prepared to release funds without probate after receiving the appropriate documentation.
For larger balances, however, the bank may require a Grant of Probate before allowing the executor to access or transfer the funds.
There is no single monetary threshold that applies to every bank or financial institution. Executors should therefore check the requirements of each individual asset holder.
4. The Estate Contains Shares or Investments
Probate may also be required where the deceased owned substantial shares, managed investments or other financial assets in their sole name.
The relevant company, share registry, investment provider or financial institution may require the executor to provide a Grant of Probate before the asset can be transferred or sold.
Again, requirements can vary depending on the organisation and the value of the asset.
When Is Probate Not Required?
While probate is necessary for many estates, there are situations where an executor may be able to administer the estate without obtaining a Grant.
Property Owned as Joint Tenants
If the deceased owned property with another person as joint tenants, their interest in the property generally passes automatically to the surviving joint owner.
For example, a married couple may own their home as joint tenants. If one spouse passes away, the surviving spouse will generally become entitled to the property through the right of survivorship.
If all of the deceased person’s assets were held jointly with a surviving joint owner, probate may not be required.
However, documents will still need to be lodged to update the property’s title.
Small Estates
Probate may not be required if the deceased had a relatively small estate and the organisations holding their assets are willing to release them without a Grant.
For example, a bank may agree to release a smaller account balance after being provided with documents such as the death certificate and Will, together with any declarations or indemnities it requires.
Because every asset holder can have different requirements, executors should not assume that an estate is exempt from probate simply because its total value is relatively low.
Superannuation and Life Insurance
Superannuation and life insurance proceeds generally do not automatically form part of a deceased estate.
Depending on the circumstances, the funds may instead be paid directly to a nominated beneficiary or another eligible recipient.
However, this will depend on the terms of the relevant superannuation fund, insurance policy and any nominations that were in place.
The relevant trustee or insurer should be contacted to determine what documentation is required.
What Is the Difference Between Joint Tenants and Tenants in Common?
Understanding how property was owned is particularly important when determining whether probate is required.
With joint tenancy, the deceased person’s interest generally passes automatically to the surviving joint tenant.
With tenants in common, each owner has their own separate share. The deceased person’s share forms part of their estate and must be administered accordingly.
If you are an executor and are unsure how a property was held, the property’s title can be checked to determine the ownership structure.
Is Probate Required If There Is No Will?
Technically, probate relates to estates where the deceased left a valid Will and an executor has been appointed.
If someone dies without a valid Will, they are said to have died intestate.
Rather than applying for probate, an eligible person may need to apply to the Supreme Court of NSW for Letters of Administration.
Letters of Administration may also be required in some circumstances where there is a Will but there is no executor who is able or willing to act.
The person appointed as administrator can then receive legal authority to deal with the deceased estate.
Who Applies for Probate?
The executor or executors named in the deceased person’s Will generally apply for probate.
The executor is responsible for administering the estate, which can include identifying assets and liabilities, obtaining probate where required, collecting assets, paying debts and eventually distributing the estate to beneficiaries.
Being appointed as an executor can involve significant legal and administrative responsibilities, particularly where the estate includes property, investments or competing interests.
How Long Do You Have to Apply for Probate in NSW?
In NSW, an application for probate should generally be filed with the Supreme Court within six months of the deceased person’s death.
If the application is made more than six months after the date of death, the executor will need to provide the Court with an explanation for the delay.
There is also a notice requirement as part of the probate process. At least 14 days’ notice must be given before the application is filed.
Executors should therefore consider the probate requirements relatively early in the estate administration process rather than waiting until an asset needs to be transferred.
How Do You Know If You Need Probate?
If you have been appointed as an executor, a useful starting point is to identify exactly what the deceased owned and how each asset was held.
Questions to consider include:
- Did the deceased own real estate in NSW?
- Was the property held solely, jointly or as tenants in common?
- How much money was held in bank accounts?
- Did the deceased own shares or other investments?
- What does each bank or asset holder require?
- Was there superannuation or life insurance?
- Is there a valid Will?
- Are there assets located outside NSW?
Once the estate’s assets and ownership arrangements have been identified, it will usually be clearer whether a Grant of Probate is necessary.
What Happens After Probate Is Granted?
Once the Supreme Court issues the Grant of Probate, the executor can provide it to relevant organisations as evidence of their authority to administer the estate.
Depending on the circumstances, the executor may then be able to:
- access and close bank accounts;
- collect money belonging to the estate;
- transfer or sell shares and investments;
- deal with real estate;
- pay estate liabilities; and
- ultimately distribute the estate to the beneficiaries.
Executors should be careful about distributing estate assets too early, particularly where there may be outstanding debts, taxation issues or potential claims against the estate.
Do You Need a Lawyer for Probate?
It is possible for an executor to apply for probate themselves. However, deceased estates can quickly become complicated.
Professional legal assistance may be particularly useful where:
- the estate includes real estate;
- the Will is unclear or unusual;
- there are multiple executors or beneficiaries;
- the original Will cannot be located;
- there may be a dispute over the estate;
- an executor does not wish to act;
- assets are located interstate or overseas; or
- there is uncertainty about whether probate is required.
A lawyer experienced in Wills and Estates can help determine the appropriate application and guide the executor through the administration process.
Need Help With Probate in NSW?
Determining whether probate is required is one of the first important steps when administering a deceased estate.
At Estates Now, we assist executors and families with probate, Letters of Administration and deceased estate matters. We can help you understand what is required, prepare the appropriate application and guide you through the estate administration process.
Learn more about Estates Now:
https://estatesnow.com.au/
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https://estatesnow.com.au/about/
Need assistance with probate or a deceased estate?
Book a consultation with our team:
https://estatesnow.com.au/book-consultation/
This article provides general information only and does not constitute legal advice. Whether probate is required will depend on the circumstances of the individual estate.
