Introduction

For most people, asset protection is crucial. It is important to ensure that those people who are to inherit certain assets end up actually receiving those assets as intended. Similarly, it is important to safeguard your assets from the risk of assets passing to those persons when you do not want to receive any benefit. Fortunately, there are a range of options available to you to assist in protecting your assets after you die.

Joint ownership

If you hold assets in joint names with another person, upon your death, those assets will automatically pass to the other person, regardless of what is in your Will. This is a sure-fire way to protect those particular assets, as they cannot be challenged.

Transferring assets during your life

If you transfer your personal assets to your friends and family members prior to your death, then by the time your Will is to be administered, the assets will not form part of your estate, and thus will protect those particular assets from a potential Will challenge.

A trust during your life

Quarantining your assets into a trust and giving yourself a life interest over those assets can be an effective strategy to protect your assets. This means that you are able to use those assets during your lifetime but those assets are immune from any challenges, as you do not actually own those assets. The beneficiaries of the trust would be the persons to whom you wish to gift your assets.

When setting up such a trust, it is important to consider that it can be expensive if you are transferring real estate and other investments which attract a transfer duty. There can be capital gains tax consequences as well.

Testamentary Trust

On top of being an effective tax planning tool, Testamentary Trust Wills are also an effective asset protection tool.

After you die, your executor will hold your assets for distribution in various trusts for the benefit of each of your beneficiaries. Your assets will not actually pass into the hands of your beneficiaries. This protects the assets from creditors or other parties who may seek a portion of a beneficiary's inheritance, for example, troublesome partners or spouses or creditors.

Mutual Wills

Mutual Wills can be an effective asset protection tool where two people are making their Wills concurrently. Mutual Wills form a legally binding contract which prohibits either party from amending or revoking their Will, without the consent of the other person. If one party dies, both Wills are irrevocable and cannot be amended.

For example, a couple who have both remarried want to leave their entire estate to each other, and then, after both have died, then equally to their children. The Wills are drafted with the same terms and both enter into a deed, leaving their estate to each other. Upon the death of one of them, the survivor would be required to leave the estate to their children. The agreement also prevents the Wills from being changed without their mutual agreement. Accordingly, once one of the couple dies, the survivor is no longer free to make a new Will and any challenges would be defeated.

Binding Death Benefit Nomination

Superannuation, as a general rule, does not form part of your estate. If no Binding Death Benefit Nomination has been made, then the trustee of the superannuation fund will have the power to decide to whom the death benefit should be paid, subject to the terms of the superfund trust deed.

By completing a Binding Death Benefit Nomination, you can be certain that the person whom you have nominated will receive payment of any death benefits.

If you require expert legal advice about how to protect your assets after your death, please feel free to contact our Accredited Specialist Wills & Estates Law team on 1300 205 506 or complete the form below.

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

Binay Prasad

Binay is a Senior Associate of Sharrock Pitman Legal.

He is an Accredited Specialist in Wills and Estates law, having been accredited by the Law Institute of Victoria. He is part of our Wills and Estates group and deals with Wills and Estates planning and Probate. For further information, contact Binay on his direct line (03) 8561 3329.

Taxes and deceased estates

Can I refuse to act as an Executor?

How does separation affect a Will?

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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