Losing a loved one or someone close to you is an emotional and often overwhelming experience. When it comes to managing their assets and their estate, many people find themselves confused by conflicting information and myths that can add unnecessary stress to an already difficult time.
At Resolve Estate Law, it is our passion to guide our clients through the estate administration process, with clarity, care and compassion. We have put together some of the most common ‘myths’ we hear to help you to better understand the estate administration process and separate fact from fiction.
Here are some of the most common myths about estate administration in Queensland, debunked!
Myth 1: If there is a Will, estate administration is quick and easy
Many people assume that if their loved one left a valid Will, the estate will be distributed smoothly and quickly. However, this is not always the case.
The Truth: Even with a Will, an estate may still require a grant, and the Legal Personal Representative (the Executor where there is a Will or the Administrator where there is not) has legal duties to ensure debts are paid, assets are identified, and beneficiaries receive their entitlements correctly.
In Queensland, eligible applicants may provide notice of their intention to bring a claim for “further and better provision” from an estate within six (6) months of the deceased’s death, and if they are progressing their claim, they must do so within nine (9) months. For this reason, we advise Legal Personal Representatives that they should not distribute any estate assets before six (6) months have passed and no notice of an FPA is received. If a notice is received, or there is are disputes over the Will, complex assets (such as trusts or business interests), income and other tax issues to be dealt with or outstanding debts, the process can take far longer!
Myth 2: An Executor or Administrator can do whatever they want
Being named an Executor or appointed as Administrator does not mean having unlimited power over the estate.
The Truth: Executors and Administrators have a legal responsibility (called a fiduciary duty) to act in the best interests of the estate and its beneficiaries. They must follow the Will (if there is one), comply with Queensland succession laws, federal income tax laws, other legislation, and ensure that all estate administration steps are completed correctly, diligently and without undue delay. If they fail in these duties, they could be held personally liable (for waste, costs or even debts not properly dealt with in the estate), be removed from their role and in serious cases they could even face criminal charges.
Myth 3: The Next of Kin Automatically Gets Everything
When someone passes away without a Will (known as dying intestate), many people assume that the entire estate will automatically go to the closest family member, such as a spouse or eldest child.
The Truth: In Queensland, our intestacy laws determine how an estate is distributed. The estate may be shared between a spouse, children, or other relatives depending on the circumstances. If there are no close relatives (spouse, children, grandchildren, great-grandchildren, siblings, aunts, uncles, cousins) the estate may pass to the state government. The process can be complicated, which is why legal guidance is crucial.
Myth 4: Superannuation Automatically Forms Part of the Estate
Many people assume that superannuation benefits are covered by a Will and will be distributed as part of an estate.
The Truth: Superannuation is held in a superannuation fund and the trustee of that fund decides who receives the benefit (also known as a death benefit, being the balance of the person’s superannuation member account, plus any insurances that might be held within superannuation).
If there is a valid binding death benefit nomination (BDBN) in place, the Trustee is bound to follow that nomination (provided the person nominated is an eligible superannuation beneficiary).
If there is a valid non-binding death benefit nomination (NBDBN), the Trustee will consider the nomination in making their decision. If there is no valid nomination, the Trustee may pay the benefit to any one or more eligible superannuation beneficiaries, including a spouse, child (including adult children) or step-child, or someone in an ‘interdependency relationship’, or to the estate.
Where there is no nomination, it could be that a number of beneficiaries apply to receive the death benefit, and the Trustee will then need to decide how to make the payment/s. This can cause conflict and be a complicated process with very different taxation consequences for the different types of beneficiaries.
Myth 6: You Don’t Need a Lawyer for Estate Administration
While some people may be able to handle the simplest estate administration on their own, the reality is that the process can be complicated, it is vital that no step is missed or overlooked and mistakes can be costly and time-consuming.
The Truth: Estate administration involves legal, financial, and tax complexities that most people are unfamiliar with. A solicitor experienced in estate administration can help executors and administrators avoid errors, fulfil their legal duties correctly (avoiding personal liability), and ensure a smooth process — reducing stress, risk and uncertainty during an already difficult time.
Need Help with Estate Administration?
At Resolve Estate Law, we specialise in helping executors, administrators and families navigate estate administration with clarity, certainty and confidence. Whether you need assistance applying for Probate, handling a complex estate, or understanding your responsibilities, we’re here to guide you every step of the way.
If you need advice on estate administration, contact us today to set up your complimentary 15-minute Clarity Call with our Senior Paralegal, Nanci Sergi. Let us take the legal burden off your shoulders so you can focus on what truly matters — honouring your loved one’s legacy.
