Intestacy and Applying for Letters of Administration Where There is No Will
Where a person either dies without a will, the person’s will cannot be located or there is some defect in a will such as the failure to appoint an executor, one of the eligible relatives can apply for what is called Letters of Administration.
Letters of Administration is a court order allowing the deceased person’s estate to be administered by the Administrator and is similar to a Grant of Probate obtained by an Executor where there is a valid will. Applications for Letters of Administration are made by Summons and filed in the Supreme Court of New South Wales under the Probate & Administration Act 1898 (NSW).
If an estate is very small (assets less than $20,000) or it there is no real property, it may be that the relevant assets can be dealt with without the need to obtain Letters of Administration.
Where an intestate person leaves one spouse (a person married to or in a domestic partnership with the intestate) and no issue (no children), the spouse is entitled to the whole estate.
Where the intestate leaves one spouse and issue, and the issue are issue of the spouse, the spouse is again entitled to the whole estate. However, where the issue are not issue of the spouse, the spouse is entitled to:
- the personal effects;
- a statutory legacy (presently $200,000); and
- half the remainder, if any, of the estate,
- with the remaining half of the residue to be divided amongst the issue equally.
Spouse’s preferential right to acquire matrimonial home
The deceased person’s spouse has a ‘preferential right to acquire property from the estate’ which must be exercised within 3 months of the Grant of Letters of Administration. The price is the market value at the date of death and the Administrator must obtain a valuation.
Where there is more than one spouse, but no issue or the issue of the surviving spouses, the spouses are generally entitled to the whole of the estate, in equal shares unless there is a distribution agreement between the spouses or the Court has made a distribution order in that regard.
Where there is more than one spouse, and issue who are not issue of a surviving spouse, each spouse is entitled to share, under a distribution agreement or distribution order (usually in equal shares unless otherwise agreed or ordered):
- the personal effects;
- the statutory legacy of $200,000; and
- half the remainder.
Where there is no surviving spouse
Where an intestate leaves no spouse but issue, those children are entitled to the whole estate, in equal shares.
After spouses and issue, the categories of relatives entitled to the estate comprise, in order, the parents of the intestate, brothers and sisters (siblings of full blood and half blood, which were previously not treated as the same), grandparents, aunts and uncles, and finally, first cousins.
The personal representative of an indigenous intestate or a person claiming to be entitled in the estate may apply to the Court for a distribution order in accordance with the laws, customs, traditions and practices of the relevant indigenous community or group.
Such an application must be made within 12 months of the grant of administration, or such longer period allowed by the Court, but no application can be made after the estate has been fully distributed.
Absence of any persons entitled on intestacy
In the absence of any person entitled, the State of New South Wales remains entitled to the whole of the intestate estate and has discretion to make provision in favour of certain persons and organizations.
The costs of the legal work of and incidental to obtaining the Letters of Administration are regulated by a scale of fees. A smaller fee is charged for smaller estates however, the fee is fixed according to the scale. Similarly, the filing fees payable to the Court are based on a separate scale.
The legal work expected to done in the administration of the estate after Letters of Administration are obtained is usually estimated separately and will generally depend upon the level of work required – the more numerous the assets, there is more work required to be performed.
Assets that do not form part of the estate
Where there are jointly owned assets (as opposed to co-ownership or ownership as tenants in common), they do not form part of the deceased person’s estate and automatically become owned by the surviving joint tenant, subject to formalities to update title particulars.
We can assist and advise the executors or administrators of a deceased person’s estate in relation to his or her or their role or responsibilities in that regard and the most efficient ways to administer the estate and obtaining a Grant of Probate or Letters of Administration if required.