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  • The deceased estate

    The property and assets belonging to a person who has died is called their deceased estate. This may include real estate, money in bank accounts, shares, and personal possessions.

    Some types of income will also form part of the deceased estate. However, some assets will not be included in the deceased estate because the deceased person has made other arrangements to distribute those assets.

    The deceased estate is held in trust from the death of the person until the transfer of the property and assets to the beneficiaries. It is administered by either:

    • an executor appointed in the person's will, or
    • an administrator appointed by the Supreme Court.

    You don't have a choice as to whether to establish a trust – as an administrator or executor, you are the trustee of the deceased person's estate.

    Wills

    A will is a legal document that sets out directions for the administration and disposal of a person's property after their death.

    If the deceased died without a valid will, this is called 'dying intestate'. When this occurs, the Supreme Court in the state or territory in which they died can appoint someone to administer the deceased estate.

    In these situations, the assets of the deceased person are distributed according to the succession laws of the states and territories of Australia – that generally means the estate passes to the deceased person’s next of kin.

    Assets excluded from an estate

    Superannuation and life insurance payments may or may not form part of the deceased estate. If there are stipulated beneficiaries under the policies, the payments may go directly to the beneficiaries without going through the deceased estate.

    Assets that are jointly owned may or may not form part of the deceased estate – this will depend on the type of co-ownership. There are two categories of co-ownership:

    • joint tenancy
    • tenancy-in-common.

    When a joint tenant dies, their share in the asset is extinguished and they cannot pass the asset to their estate – the surviving owner becomes the sole owner. The most common type of asset held in joint tenancy is the family home.

    When a tenant-in-common dies, their share passes to their deceased estate and the executor deals with that share in the asset. In the case of real estate, the title deed usually specifies the type of co-ownership. Under common law, joint tenancy of real estate is presumed in the absence of any documented contrary intention.

    For other assets, like bank accounts and shares, the type of ownership is often not stipulated – the contract or purchase documentation may provide clues.

    Authority to deal with the tax affairs of the deceased person

    For you to deal with the deceased person’s tax affairs, you will need proof that you have the authority to do so.

    Get it done

    After you have been appointed executor, you should notify us by completing the form Notification of a deceased person (NAT 74279).

    You can lodge your completed application, with the original or certified copies of supporting documents outlined on the form, to us by:

    • visiting your nearest shopfront – phone 13 28 61 between 8.00am and 6.00pm, Monday to Friday, to make an appointment
    • mailing it to the address on the form.
    End of get it done

    It can take up to 28 days to update the records after we receive the form.

    You will need to provide proof of identity for yourself, including:

    • tax file number (TFN), full name, date of birth, and address
    • documents, such as the death certificate and the will, or
    • evidence of the grant of probate or letter of administration, when it is granted – this may be some time after you lodge the deceased person's tax returns.

    We cannot disclose the TFN of the deceased person to you until you have established your authority. However, once that is done, you can request the TFN of the deceased person over the phone, or ask us to send it to you.

    Probate

    Where the deceased person leaves a will, the executor needs to obtain probate before they can distribute the assets of the deceased estate to the beneficiaries. Probate is granted by the Supreme Court in the state or territory in which the will is lodged. Probate is the court's authority to the executor to administer the deceased estate.

    People who believe they have an entitlement to part of the deceased estate or creditors of the deceased person – for example, the ATO if there is an outstanding tax liability – can contest the will before probate.

    Stages of administration

    The period of administration begins at the date of death, and ends when the administration of the estate is complete, in this order:

    1. Date of death
    2. Funeral arrangements.
    3. Executor appointed by will, or administrator appointed by the court.
    4. Probate applied for and granted by the court.
    5. Assets vested in executor who administers estate –
    • date of death and trust tax return lodged
    • initial stage – net income of estate is applied to reduce debts (including tax liabilities)
    • intermediate stage – part of the net income of estate that is not required to pay debts may be paid to beneficiaries
    • final stage – debts are paid or provided for in full and net income and assets of the estate are distributed to beneficiaries.
    1. Administration of estate is complete.

    Testamentary trusts

    A testamentary trust is established when a will is put into action on someone's death. However, a testamentary trust is not the same trust as the deceased estate. It may last for many years after the deceased estate has been fully administered.

    An example of a testamentary trust is a trust created by a will on the death of a parent to ensure assets are held in trust until a child turns 18.

    A testamentary trust does not come into effect until after the death of the person making the will. At this time, specified deceased estate property is transferred to a trustee, who holds the assets on trust for the benefit of the beneficiaries.

    If a testamentary trust is created, the executor or administrator will need to apply for a separate tax file number.

    Attention

    If you are responsible for administering a testamentary trust, you should consider seeking advice from a professional specialising in this area.

    End of attention

     

    • Last modified: 03 Jun 2014QC 23848