slides - adviser facilitated probate and estate administration - 18 october 2017
TRANSCRIPT
ADVISER FACILITATED PROBATE AND ESTATE ADMINISTRATION
Patrick Ellwood, Director, View LegalHannah Whippy, Managing Lawyer, Adviser Solutions
October 2017
Overview
How to facilitate
General overview of the probate and estate administration process
Grants and applications required
Explanation of key roles
Common problems and how to avoid them
1
2
3
4
5
Estate Administration processDeath
Last Will located
Executors
Probate Application
2 3 4 51
Collect assets >>> Pay debts >>>
Inform beneficiaries
6
Ensure all roles of deceased are handed on (eg
directorships, memberships, trusteeship, etc)
7
Deal with claims against the estate
bought within statutory time limits
10 9
Tax planning, including formal establishment of any
testamentary trusts established by the will
11
Interim Assetdistributions
12
Determine net value of estate for final distributions
Death certificate
8
Final distribution and lodgement of estate tax returns
Communicate with beneficiaries
Initial administration
Collect cashassets and pay
outstanding debtsSell or transfer
remaining assets
Make distributions according to will
Determine superannuation
entitlementsRegister death on
joint tenancy assets
Taxation matters e.g. lodgement
of tax return
Estate Administration Process
21 3
65 7
4
8
Grant of Representation
ProbateLetters of
administrationon intestacy
Letters ofadministrationwith the will
Grant of representation
AdministratorExecutor
Personal representatives
MAIN TYPES
1 2 3
There’s a will
No executor able to act
Administrator
There’s a will No will
Executor named Administrator
What should be applied for?
Prerequisites ProbateLetters of
administration with Will
Valid will ✓ ✓
Named executor ✓ ✓
Executor is willing and able to act ✓
Executor is unwilling or unable to act
✓
No challenges ✓ ✓
Beware of notional estate rules ✓ ✓
Documents To Be Submitted
Original death certificate Affidavit
Service/advertising
Original plussigned copy
of will
Formal application by
executor
Key Roles
Executor
Administrator
Guardian (of infants)
Residue Beneficiary
1
2
3
4
Beneficiary5
Adviser6
Role of Executor/Administrator
Obligation to advise
beneficiariesof progress
of estate administration
Legal personal representative
of deceasedAdministrative
role
Apply for grant of probate
Collect assets and distribute
pursuant to will
Pay debts
Property transfers
Close bank accounts
Notify authorities
Common Problems
Existing structures
Aliases
Loss of capacity
Missing wills or codicils
Specific or contingent gifts
Family Provision Applications
1
2
3
4
5
6
Poor planning7
Aliases
Death certificate registered with ‘Pat
Joseph Ellwood’
2
In the will of ‘Patrick Joseph Ellwood’
1
Grant of representation
(Advertising, Affidavit of executors)
3
Case examples
5
Titles Office
4
Solutions (‘also known as’, checklist)
6
Loss of Capacity
There should be no disorder of the mind and no insane delusions in influencing the disposing of the estate.
Lucid intervals
Sound mind, memory and understanding
Requirements of testator
1
2
3
4
Comprehend and appreciate the claims to which the will maker ought to give effect.
Requirements of testator
Understand the nature of making a will and its effects.
Understand the extent of the property of which the will maker is disposing.
1
2
3
Passing away with a valid will
Location ofcurrent valid will
Notice/advertising of
intended application
Applicationlodged
Death certificate
Grant ofprobate issued
…for the grant of probate or letters
of administration to be published and served on the Public
Trustee
…with the courts for the grant of
administration –at least 14 days after the notice
5 days to 6 weeks from the date of
application –depends on the State /
Territory and the complexity of the matter
Specific or contingent gifts
Titles Office requirements
‘Provided she stops collecting cats, I give my royal doulton china with hand painted blue periwinkles to…’
Common issues (Ademption, Equalisation
1
2
3
Specific or contingent gifts
Case examples
Solutions
– Flexibility vs Certainty
– Powers of appropriation
– ‘Any china I own’
1
2
– Confirmation of executor - contingencies
Using existing structures
‘I leave my Net Estate to the trustee of the Ellwood Trust, a trust established under my late brother John’s will’
1
Heritage issues2
Wound up structures3
Tax and duty implications4
Using existing structures (Cont’d)
Solutions6
– Planning: Existing vs new TTs
– Appropriation clause
– Ongoing review of estate plan
Family Provision Applications (FPAs)
Legislatively enacted1
Cannot eliminate the risk2
Successful claim:3
– Step 1: claimant must have standing
– Step 2: claimant must show that they haven’t received adequate provision
Family Provision Applications (FPAs) (Cont’d)
Common Factors:4
– Testators intentions clear
– History of distributions
– Disentitling conduct
– Size of the estate
– Circumstances of the claimant
Timeframes
Distribute estate after expiry of period if no notice received
Protection for executors
12 mths 12 mths 9 mths 6 mths 3 mths
In NT from date of grant
In NSW from date of death
In Qld from date of death
In ACT, SA, Vic & WA from date of grant
In Tas from date of grant
Application for FPA
Poor Planning
Owner of a life insurance policy avoids tax liability
Above issues
Intestacy
Post death structures
1
2
3
4
Intestacy
Clients have died without a validwill in place
Different process in each State
Advertising requirements
1
2
3
Distribution of assets determined by intestacy rules
4
Post death testamentary trusts
When assets must pass
Superannuation proceeds
Insurance proceeds
Stamp duty implications
1
2
3
4
Excepted trust income to extent of entitlement in the event of intestacy
5
Is the beneficiary ‘presently entitled'?6
Adviser’s Role
Preparation of an asset registerof the estate1
Location of and distribution of assetswithin the estate2
Explain deceased and current investment strategy3
Probate4
Investment advice for beneficiaries5
Your Role In The Administration Process
Adviser Lawyer
Death certificate issued, current will obtained and instructions submitted to View Legal with an asset schedule ✓
Advertisement/notice of application for grant ✓
Preparation of the application for grant and submission with the court ✓
Grant issued and supplied to adviser ✓
Distribution of assets ✓ (if needed)
Future investment advice ✓
Facilitating updated estate plans for beneficiaries ✓
Estate admin opportunities
Perfect complementary solution to front end estate planning
Use estate administration process to widen your client base
Maintain FUM, otherwise at risk on death of client
Intergenerational advice opportunities – administration of the estate and advice to beneficiaries
Satisfy compliance obligations
Diversified offering that can be delivered on a fee for service basis
Key planning areas
Initial compliance steps pre-probate
Trusted adviser
at time ofclient’s death
Estate admin piece
Audit of all family
members (& friends, business
associates and other advisers)
Adviser of choice due to deep
specialisation
Facilitating compliance in the medium
term(TT establishment, tax planning, notifications, registrations, finance
etc)
Advice for trust monies retained
(e.g. Children under 18)
Ongoing value adds
Securitisation and asset protection
2
Financing arrangements
1
Structure simplification
(especially arrangements of a surviving spouse)
3
Planning advice where multiple
families are part of a single TT
5
Complementary control of related
entities (e.g. principal/appointer etc.)
4
Distributions to and from existing
family trusts
6
THANK YOUPatrick EllwoodDirector
Mobile: 0400 503 111
Email: [email protected]
Website: http://www.viewlegal.com.au/
Blog: http://www.blog.viewlegal.com.au/
Linked in: https://au.linkedin.com/pub/patrick-ellwood/96/625/348
The material contained in this presentation is based either on information derived from our proprietary business diagnostics (including research) or fromother sources within the market, which we believe to be reliable and accurate. It is general in nature and does not constitute specific advice. BusinessHealth makes no representation or warranty as to the validity, relevance or accuracy of this information as it pertains to any specific practice or business.
Proprietary & Confidential
THANK YOUHannah WhippyManaging Lawyer – Adviser Solutions
Mobile: 0433 619 765
Email: [email protected]
Website: http://www.viewlegal.com.au/
Blog: http://www.blog.viewlegal.com.au/
The material contained in this presentation is based either on information derived from our proprietary business diagnostics (including research) or fromother sources within the market, which we believe to be reliable and accurate. It is general in nature and does not constitute specific advice. BusinessHealth makes no representation or warranty as to the validity, relevance or accuracy of this information as it pertains to any specific practice or business.
Proprietary & Confidential