There are an abundance of intricacies involved in the management of a deceased estate. Various aspects of tying up an estate may appear overwhelming and complex, but they don’t have to be.
Not all estate matters are resolved the same way. It’s important to understand the distinct circumstances of your situation, so you can ensure that all of the correct procedures are followed and that the estate is administered as smoothly as possible.
What is a Small Estate?
As outlined in the Administration and Probate Act 1958, an estate is considered ‘small’ when the testator’s solely owned assets don’t exceed $109,350 in gross value. This amount does not include any jointly owned assets, as the surviving owner will automatically inherit any property of this nature. The gross value of an estate is recorded prior to debts being deducted, so if the deceased has any outstanding costs, these will need to be taken into account before the estate is administered to beneficiaries.
There are various circumstances under which an individual may pass away with a small estate. Often, such situations arise when the deceased has died at a young age, or when they hold a large portion of their assets jointly.
Grant of Representation For a Small Estate
Before an estate can be distributed, the Supreme Court of Victoria must issue a Grant of Representation. Common grants include Probate and Letters of Administration, with such documents providing legal confirmation that a will is valid.
Often, the executor of a will must successfully apply for and obtain a Grant of Representation to administer the estate of a deceased individual. However, this is not always the case. When the remaining assets of a testator have a relatively low gross value then, sometimes, a Grant of Representation is not required.
In some instances, a Small Estates Officer can assist individuals in applying for a grant of probate or administration. This is offered as a legal aid public service, eliminating the need for a person to seek guidance from a solicitor. A court officer will, in this way, help to reduce the financial burden incurred by an individual when preparing their application while also ensuring the correct processes are followed.
If you wish to receive such assistance when gaining a Grant of Representation, you will need to apply at the Probate Office in Melbourne. Alternatively, those who live more than 32km from Melbourne can visit their local Magistrates’ Court to gain professional guidance from a Registrar. However, it’s important to note that legal aid of this nature is only available to those applying for basic grants. If your application appears to be contentious or uncertain, you will need to seek legal assistance elsewhere.
The Cost of Managing a Small Estate
In cases where an individual needs to acquire a Grant of Representation, they may be required to contribute funds towards:
- Document preparation;
- Court notices;
- Obtaining the deceased’s original death certificate;
- Property valuations.
When an estate is being administered, the executor will likely encounter numerous costs. These costs vary on a case-to-case basis so, before distributing an estate’s assets, it’s important to speak directly with an experienced estate lawyer. Your estate professional will advise you of any costs in advance, aiding in your ability to make a well-informed decision.
When distributing small estates, the Small Estates Office will often allow for assets to be administered at a lesser cost. Whether or not an individual is eligible for such financial support is, of course, dependent on the specific circumstances surrounding an estate. For more information about legal aid of this nature, or if you believe you are eligible to apply, contact the Small Estates Office.
Prior to beneficiaries receiving any assets, the executor will need to ensure that all outstanding bills or any unpaid formal debts owed by the testator are paid from the estate. In some cases, the executor will need to sell property or other valuable assets belonging to the estate to acquire adequate funds to pay the deceased’s debts in full. However, if this is not possible, the creditor may take legal possession of the asset in question or the estate may be forced to declare bankruptcy.
Contesting a Small Estate
A claimant may decide to contest a small estate for any of the following reasons:
- They believe they didn’t receive adequate provision;
- They believe the deceased was under undue influence or coerced when writing their will;
- They believe the testator wasn’t of sound mind during the creation of their will.
If an individual decides to lodge a family provision claim and is successful, the legal costs will typically be paid from the estate in question. However, whether the claimant’s costs are paid in full or only in part will rely on the particular outcome of their case.
If you have any queries, our Contesting a Will FAQs are a great place to start.