What is probate?
I’m quite often asked: what is probate? A lot of people think that it is a tax, and that it’s an amount that is paid depending on how big the estate is. Wrong.
Probate is just a process of proving that a Will is valid, and having a legal document issued by the Supreme Court, confirming that validity. The endorsement by the Court, and that piece of parchment then allows the executor to deal with assets in the estate, particularly real estate.
A grant of probate is a grant of representation in a deceased estate when there is a Will. Letters of Administration are the equivalent grant of representation in a deceased estate when someone dies intestate (without a valid Will).
So, probate is not a tax. There is no death tax in any State in Australia. The fee for a grant of probate used to be a set fee in Victoria, and not based on the value of the estate. But since September 2018, the fee in Victoria is now based on the value of the estate, with the majority of estates being approximately $325.
To apply for probate, the executor(s) need to submit an application to the Supreme Court in the form of an Originating Motion, to commence proceedings. All the proceedings are usually dealt with without anyone having to appear, so it is all just paperwork.
The executor’s evidence with their application is in the form of an affidavit. In the affidavit they need to establish that the person has died (usually by attaching the death certificate), they need to prove that the Will is valid, and they need to submit an inventory of the assets and liabilities of the estate.
Putting this application together can take a few weeks after the death certificate arrives, and in Victoria death certificates are taking 6-8 weeks to issue. So beneficiaries of an estate should expect that it will take about 3-4 months after the death before an application is made for probate.
Probate is not needed for every deceased estate – only if there are assets that require it. A grant of representation (either probate or letters of administration) is required to deal with:
- bank accounts or investments over the value of $50,000
- real estate, and
- refundable accommodation bonds deposited with a aged care facility.
Many estates can be resolved without a grant of representation, particularly if a lot of the assets are jointly owned, or the estates are relatively small. However, there are some benefits in getting a grant of representation even if there are no assets that require it.
There is some protective legislation that applies to an executor who has a grant of probate, which doesn’t apply if they administer the estate without the grant. For example, an executor may become personally liable for some debts of the estate, if they haven’t had a grant of probate and they haven’t then followed the steps of a creditors advertisement. Therefore, a grant of representation can also protect an executor.