Many of the duties that apply to company directors also apply to the committee members of Incorporated Associations, as Samuel Ellemor explains.

Introduction

If you are on the committee of an Incorporated Association, you should familiarise yourself with the duties you have to your organisation and its stakeholders. For example, if you thought that only company directors have to worry about insolvent trading, you would be wrong.

Duties of Committee Members

For organisations structured as an Incorporated Association in Victoria, these duties arise from the Associations Incorporation Reform Act 2012 (Vic). The duties include:

The duty not to use your position (or knowledge obtained from your position) to gain an advantage for yourself or another person.
The duty to exercise your powers with due care and diligence.
The duty to act in good faith and for a proper purpose.
The duty to avoid insolvent trading.

More details can be found on the Consumer Affairs website.

Potential Penalties for Committee Members

There are civil and criminal penalties for breaching these duties. The consequences are less severe than those that company directors face, but the civil penalties can still amount to penalties of up to $20,000.

In addition, the Associations Incorporation Reform Act incorporates the insolvent trading provisions of the Corporations Act 2001 (Cth). This means committee members can be personally liable for the debts of their organisation if those debts are incurred while the organisation is insolvent.

Any Tips

To avoid breaching your duties as a committee member of your Incorporated Association, you should:

Take a proactive role in the decision making process of the committee;
Make sure you are fully informed before making decisions and, if necessary, obtain professional advice;
Ensure that you have no material personal interest in transactions carried out by your Association;
Always act in the best interests of your Association and don't put your (or someone else's) personal interests ahead of the Association;
Don't allow the organisation to enter into contracts or take out loans unless you're confident the organisation can pay its debts as and when they fall due. If you are in doubt, you should seek the advice of an accountant.

How can Sharrock Pitman Legal help me?

We have helped many committee members with ensuring they comply with their duties, and it would be our pleasure to assist you. We provide fixed prices and offer substantive free benefits to all customers who run a business. Click here for full details. Call Sharrock Pitman Legal today on 1300 205 506.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by a member of our Legal Team

For further information contact

Samuel Ellemor

Samuel Ellemor is a Senior Associate and Accredited Specialist in Workplace Relations Law, with expertise assisting individuals, businesses and not-for-profit organisations across abroad range of employment, commercial and not-for-profit matters. Samuel can be contacted directly on (03) 8561 3316.

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Many of the duties that apply to company directors also apply to the committee members of Incorporated Associations, as Samuel Ellemor explains.

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Supreme Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be published on the Supreme Court website for at least 14 days prior to any application being lodged.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself usually does not take long to process the application (maybe another 1 to 2 weeks) and this is completed using the electronic Supreme Court filing system. This means you do not have to go to a Court hearing. The timeframe for processing applications for Letters of Administration is even less, given that there is no Will document for the Court to consider. There is also a general discretion for the Court to raise a 'Requisition' asking for more information before they review the application - this can sometimes delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate or Letters of Administration. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.

You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE:

(03) 8561 3318

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Committee Members: Do you know your duties?

Many of the duties that apply to company directors also apply to the committee members of Incorporated Associations, as Samuel Ellemor explains.

Introduction

Duties of Committee Members

Potential Penalties for Committee Members

Any Tips