Letters of Administration

What is Letters of Administration?

If someone dies without leaving a Will, the next of kin must make an application to the Supreme Court of Victoria for Letters of Administration. If someone dies with a Will you apply for Probate and distribute the estate according to the Will. If someone dies without a Will next of Kin applies for Letters of Administration and distributes the estate according to the law. Only once Letters of Administration have been granted can the next of administrator distribute the estate in accordance with the law.

Here is an example of where the deceased is survived by a partner and two children:

  1. The partner receives $451,909 (plus CPI) plus 50% of the remaining balance; and
  2. The children equally share the remaining 50% balance.

So, in this example, let’s say an estate is $1,000,000. The partner receives $451,909 + $274,035.50 = $725,944.50. The children share equally in the remaining $274,035.50 which means they each receive $131,017.75 each.

Administrator Responsibilities

An administrator is someone appointed by the court to manage the deceased estate according to law. Their roll commences as soon as Letters of Administration is granted by the court. An application is made by the next of kin which is determined by the law, and this is not necessarily the person who was closest to the deceased. They will need to obtain the death certificate and apply for a Grant of Representation, inform family and friends, arrange the funeral and wind up the estate. There is a lot of work to be done.

The administrator must locate and contact each entitled beneficiary of the estate. Some of these beneficiaries can be located overseas. The administrator also needs to assess the deceased’s assets and liabilities. Debts must be paid or otherwise dealt with. This includes paying for the funeral, attending to taxes and out of pocket expenses in managing the estate.

There are also everyday tasks which the administrator must take care of. These include care and relocation of pets, attending to mail redirection, cancelling services and attending to bills. Another vital and important step is to ensure all estate assets are valued and adequately insured.

If the deceased had any business affairs the administrator must also take care their interests in them. This can include any partnerships, companies or investment schemes. The administrator may need to make decisions about the running of the business, wind the business or investments up, sell or manage real estate.

Tax returns may need to be prepared for times during the deceased’s lifetime as well as post death. Distribution of the estate to the beneficiaries should not occur until all tax liabilities have been assessed and paid. If the administrator distributes the estate before tax is paid and there are insufficient funds to pay the tax debt, the Australian Taxation will look to the administrator to pay.

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