Explaining Letters of Administration
In this information sheet, we cover the important things you should know when required to make an application for a Letter of Administration.
What is a Grant of Letters of Administration?
A grant of Letters of Administration is a legal document issued by the Court, which appoints an administrator or administrators to administer the estate of a deceased person, that is to call in all assets, pay liabilities and distribute the deceased’s assets in accordance with the law.
There are two types of applications:
- Letters of Administration: Where the deceased died without leaving a will (known as dying intestate)
- Letters of Administration with the Will annexed: Where the deceased left a Will but no executor had been appointed or where the appointed executor has renounced their office.
What is the purpose of a Grant of Administration?
The Grant of Letters of Administration gives the administrator as the deceased’s personal legal representative the power and right to call in the estate assets, pay liabilities, defend claims against the estate and distribute the assets to the beneficiaries in accordance with the statutory trusts under the Succession Act 2006.
Is there a need for a Grant of Administration?
Obtaining a grant of Letters of Administration is necessary in order to deal with estate assets. In some circumstances (usually small account balances or shareholdings) assets may be called in without having obtained Letters of Administration. For example, some financial institutions and share registries will allow the release or transfer of the asset where the value concerned does not warrant the making of an application or there is little doubt about the person ultimately entitled.
Financial institutions have different threshold requirements for grants. Some will release account proceeds where the balance is less than $20,000, others $100,000. Usually, in these circumstances, the bank will require protection from other claimants, called an indemnity.
If the deceased owned Real Estate: If the deceased owned real estate solely or owned as tenants in common with someone else, Letters of Administration will be required to transfer the asset. Letters of Administration will not be required where the deceased person holds the land as joint tenants with another, as the real estate will pass to the joint owner by survivorship.
Superannuation: The proceeds of life insurance and superannuation generally do not form part of the estate however the trustee of the fund may pay to the administrator of the estate where there is no binding nomination in place or where there is a conflict between potential claimants.
Is there a time limit for applying for Letters of Administration?
As with probate, it is expected that an application is filed within six (6) months of the death of the deceased person. If the application is made later than six (6) months after the deceased’s death, the Supreme Court will usually require that an explanation is given for the delay in making the application.
Who can apply for Letters of Administration?
Generally, only persons who are entitled to a share of the estate are considered appropriate applicants to apply for administration.
The preferred applicant is usually the person or persons with the greatest interest under the estate. Chapter 4 of the Succession Act 2006 sets out the order in which eligible relatives will inherit the estate of a deceased person, this eligibility usually also entitles someone to apply for a grant. However, there are others who may apply including creditors of the estate.
Who is entitled to the estate?
The Succession Act 2006 sets out the order of entitlement of beneficiaries on intestacy in cascading order of priority.
- Spouse(s) only (includes any de facto, de jure spouse and registered relationship. There may be more than one spouse), but only if there are no children who are not also children of the spouse(s) entitled to apply. In the case of more than one spouse, there is a presumption that they share equally.
- Spouse(s) and children, if there are children of the deceased who are not the children of the spouse(s). Generally, the statutory amount (now around $500,000) to the spouse and then half of the balance to the spouse and half the balance to the children.
- Children (including the children of any predeceased children).
- Parents
- Brothers and sisters (where a brother or sister has predeceased the deceased person, then the children of that brother or sister. This includes half-siblings and siblings who are adopted by the parents of the sibling, but it does not include step-brothers or step-sisters)
- Grandparents
- Aunts and uncles (including the “children only” of any predeceased aunt or uncle).
How much does it cost to obtain Letters of Administration
There are Court filing fees associated with the filing of the application for a grant of Letters of Administration which includes mandatory advertisement of the intention to apply for administration based on the gross value of the assets of the estate.
Solicitors will also charge professional fees for the work necessary to make the application. Those fees are regulated under the Legal Professional Uniform Law Application Regulation 2015 and are calculated on the gross value of the assets of the estate.
What information and documents do I need to make a Letters of Administration application?
Before beginning the process, you will need the following:
- Original death certificate of the deceased; and
- Certificate evidence of births, deaths, marriages etc. to establish entitlement.
It is also advisable to do the following:
- Carry out a thorough search of the deceased’s personal papers for any wills or testamentary documents;
- Collate all documents which might assist in determining the deceased’s assets and liabilities;
- Advise the deceased’s financial institutions that the deceased has passed away so that no one can access their accounts; and
- Contact the home and contents insurer for the deceased’s home to advise of the death.
How long does the process take?
The whole process can often take anywhere between a few weeks to several months and this time will vary depending on the complexity of the deceased’s estate and how many beneficiaries are involved.*
Do I need a lawyer to apply?
Although there is no requirement to use a lawyer to apply for Letters of Administration, it is advisable to use a lawyer. This is because the application will most likely be complex and if not executed correctly can result in significant delays.
It is important to remember that each asset holder, including superannuation and life insurance, will have different criteria when it comes to releasing funds and assets. For this reason, it is advisable to get advice and assistance from an expert in Probate and Letters of Administration.
*The Supreme Court’s current processing times are slightly delayed due to the high number of applications received and the availability of Registrars to assess the applications. Applications are taking approximately 2 months to be assessed after filing.
