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We are seeing a rise in Executors or Administrators wanting to administer a deceased estate without legal assistance. This may save on legal fees, but what does it really cost you?
Being appointed as the executor or administrator of a deceased estate is a significant responsibility. While many people assume the role simply involves distributing assets to beneficiaries, the reality is more complex.
Administering a deceased estate in Victoria involves strict legal obligations, financial responsibilities, and court procedures. Executors or Administrators who attempt to manage the process without legal advice may unknowingly expose themselves to serious risks, one of the biggest being personal liability.
For this reason, seeking professional legal assistance when handling probate and estate administration is crucial.
An executor/administrator is responsible for firstly securing the deceased’s assets and then managing them and finalising the estate of a deceased person according to the terms of their Will or the laws of intestacy. In most cases, you must obtain a Grant of Probate or Grant of Letters of Administration/Grant of Representation from the Supreme Court of Victoria before you can access or distribute certain assets.
Although this sounds straightforward, the process involves complex legal and procedural requirements. One small error in the process means you must start over and can put you at risk of claims against you.
One of the most significant risks of administering a deceased estate without legal advice is personal liability.
Executors and Administrators have a legal duty to act in the best interests of the estate and its beneficiaries. If mistakes are made during the administration process, they may be held personally responsible.
Examples of situations where an executor or administrator may face liability are:
If these issues arise, beneficiaries or creditors may pursue legal action personally against you. In some cases, the executor or administrator may be required to personally repay funds to correct the mistake. This may mean you could be liable for the costs of legal proceedings in addition to the original sum.
Whilst you may think you know the financial affairs of a deceased person, nobody can be certain. There is no right of indemnity from the Estate. You could be personally liable if the correct legal steps in the Estate administration are not followed. Are you prepared to risk this?
Disputes between beneficiaries are one of the most common challenges in estate administration.
These disputes may involve:
Without legal guidance, executors or administrators may unintentionally take steps that escalate conflict or expose themselves to accusations of misconduct. Legal advice can help you manage disputes appropriately and ensure they comply with their legal duties to minimise these risks. When an Executor or Administrator is also a Beneficiary, this can amplify the risk of disputes from other beneficiaries.
Many estates require a Grant of Probate or Grant of Letters of Administration before assets can be transferred or distributed.
The Probate or Estate Administration process involves detailed documentation and strict court requirements. Errors in Probate or Letters of Administration applications can result in delays or rejection of the application.
Without a Grant of Probate or Grant of Representation, executors and administrators will not have the authority to deal with certain assets such as:
Legal professionals experienced in Probate matters can ensure applications are prepared correctly and submitted efficiently so you are not at risk of claims for delaying the administration.
Estate administration can also involve complex tax obligations. Executors and administrators may be responsible for ensuring the following are completed correctly:
If tax obligations are overlooked or handled incorrectly, the executor/administrator may face penalties or complications when distributing the estate. Legal advisors often work with accountants to ensure these issues are addressed properly to protect you. Not understanding the legal requirements for tax returns could put you at risk of liability, even after the Estate has been administered.
Executors and administrators often underestimate the time and complexity involved in administering an estate.
Common administrative challenges include:
Mistakes or delays may lead to frustration among beneficiaries and, in some cases, legal complaints about the executor/administrator’s performance. Without legal assistance, how can you undertake property transfers in accordance with a Will?
Seeking legal assistance does not mean you cannot perform your role. Instead, it provides professional guidance to you as Executor or Administrator to ensure the estate is administered correctly and in accordance with your strict legal obligations in order to minimise the risk of personal liability.
Wollerman Shacklock Lawyers assists with all aspects of Estate Administration including:
Most importantly, professional legal advice helps reduce the risk of personal liability for executors.
Client A came to Wollerman Shacklock Lawyers to get assistance with administration of their deceased mother’s estate. Client A was an only child and sole beneficiary of the Estate. Client A wanted to distribute the Estate as soon as the Estate funds were called in. We provided legal advice to Client A on the risks of administering the Estate without waiting the 6-month statutory period.
Client A was reluctant to wait as they were certain there was nobody who would make a claim against the Estate. However, after understanding the risk to them for not waiting, they agreed to wait out the statutory period before distributing.
One day before the 6-month statutory period was to lapse, a claim was made against the Estate by an estranged adult child of the deceased that Client A had no knowledge about. The estranged adult child had disabilities and was therefore eligible to make a Part IV claim against the Estate under the Administration and Probate Act 1958 (Vic) for inadequate financial provision for them in the deceased’s Will.
Luckily, Wollerman Shacklock were able to avoid costly court proceedings and Client A and their estranged sibling were able to come to an agreement for provision for the estranged child from the Estate.
Risk to Executor: Had Client A not obtained legal advice on the administration of the Estate and administered the Estate once all the assets were called in, Client A could have been held personally liable for the claim against the Estate. This would have then included costly legal fees and the risk that an amicable resolution would not be reached.
Clients A and B came to Wollerman Shacklock Lawyers to assist with obtaining a Grant of Probate for their late father’s estate. They did not want to incur any more legal fees than necessary.
A Grant of Probate was obtained, and advice was given to the Clients to advertise for Creditors in case the Estate has any liabilities. The clients did not want to incur legal fees for this and were adamant that their father had no liabilities.
After receiving our advice on the risks to them of not identifying any and all liabilities of the Estate, the Executors reluctantly instructed our office to advertise for creditors. To the surprise of the Executors, numerous creditors wrote to the Estate requesting payment of monies owed to them. Luckily Clients A and B had followed our legal advice and had not distributed the Estate, and the creditors were paid from the Estate funds.
Risk to Executor: Had the Executors remained adamant there was no need to advertise for creditors and distributed the Estate, they could have been held personally liable for the debts owing from the Estate. This could have amounted to a lot more than just the initial amounts owing.
You may think you are aware of the deceased’s affairs but it not uncommon for unknown creditors or situations to pop up after someone passes away!
Administering a deceased estate in Victoria carries significant legal and financial responsibilities. Executors or administrators who attempt to manage the process without professional guidance may face unnecessary risks, including personal liability, disputes, and costly mistakes.
Obtaining legal advice early in the estate administration process can help you navigate probate requirements, fulfil your legal obligations, and protect yourself from potential liability. Saving a little bit now, could cost you more later on.
If you need assistance with administering a Deceased Estate in Melbourne, contact our experienced and friendly deceased estate lawyers today.
We’re here to provide clear advice and practical guidance when you need most.
Accredited Property Law Specialist
Accredited Property Law Specialist