Release of assets from financial institutions
Part of the grant of probate or letters of administration is a photocopy of the list of assets and liabilities which the executor or administrator submitted as part of their application for the grant. The bank or other body must check that an asset is on the list before it can release it. If no check is made and an asset is distributed, the bank or other institution could be liable for any error.
The money in an account held in joint names will pass to the survivor on the death of the other account holder. If the balance of an account in the deceased's own name is small, the bank may release it without production of probate or letters of administration. Usually the will and death certificate will be required, and sometimes the bank may request consent and indemnity forms from members of the deceased's family. Where probate or letters of administration have been obtained, these will usually be the only documents required by the bank to release the funds, other than a withdrawal form.
Building society requirements and procedures regarding the release of assets vary from society to society. The relevant branch should be contacted, but generally the requirements are the same as for banks.
Many people have life insurance policies that mature on their death. Generally, insurance companies are prepared to pay out these policies without a grant of probate or letters of administration when the sum is less than $10,000.
Transfer of real property
When the deceased was sole owner of a property, or was a tenant in common (that is, they owned a share in a property), it is necessary to apply for probate or letters of administration and present this along with other documents (see below) to Land and Property Information. However, if the deceased was a joint tenant, the surviving joint tenant automatically gets the whole property and the deceased is not considered to have 'owned' or left real estate.
Despite this 'automatic operation', the registrar-general of Land and Property Information must be informed of the death to enable the certificate of title to the property to be changed to delete the name of the deceased. The following documents will have to be lodged with Land and Property Information:
- a notice of death
- an original or copy (not an extract) of the death certificate
- the certificate of title of the property (if this is held by a mortgagee, they should be asked to produce it to Land and Property Information; the mortgagee may charge a fee to do this)
- a notice of sale, or transfer of land, which will enable NSW Department of Lands to change the name of the owner at the local council, Valuer-General and water supply authority
- a lodgement fee ($102 as at 1 July 2012).
There is no special requirement for the transfer of a car to a beneficiary, except for changing the name of the owner for registration purposes. Probate or letters of administration are not needed if a car is the major item in the estate. The Roads and Traffic Authority and relevant insurance companies should be contacted to change details of ownership.
There are no special requirements for distributing personal goods. However, disputes may arise over the ownership of particular goods and the executor or administrator may become involved in protracted negotiations or even litigation to settle conflicting claims.
The legislation regarding superannuation is quite complex. Superannuation funds are generally established by way of a trust deed. The deed will usually provide that on the death of a member, a death benefit will be payable to the member's dependants. Each fund's definition of dependants may be slightly different. Superannuation is generally covered by Commonwealth legislation, the Superannuation Industry (Supervision) Act 1993 (SIS Act) (except for some State and Commonwealth public servants).
The Act provides that the trustee of a superannuation fund must pay death benefits to:
- a dependant, or
- the deceased's estate.
Until recently, the Act's definition of a dependant excluded same-sex partners. Now the definition of a dependant has been expanded to include any person with whom the member has an interdependency relationship. Such a relationship is defined in section 10A of the Commonwealth Act and can include same-sex couples. Briefly, people, whether or not they are related, are in such an interdependency relationship if:
- they have a close personal relationship
- they live together
- one or both of them provides financial support to the other
- one or both of them provides domestic support and personal care to the other.
A person may still be considered to be in an interdependency relationship with someone if they have a close personal relationship but, because of a disability, do not satisfy other requirements of the Act. The Same Sex-Relationships (Equal Treatment) Commonwealth Laws - Superannuation) Act 2008 received Royal Assent on 4 December 2008. The Act amends the SIS Act making it easier for regulated superannuation funds to recognise same-sex relationships from 1 July 2008.
Most funds allow a member to nominate who they wish to receive the benefit upon their death. That person or persons must, however, qualify as a dependant under the rules of the fund and the trustee is not bound by law to pay the benefit to the nominated person.
Since 1999, the trustee of a fund has been able to amend its trust deed to allow members to make a binding nomination. If a member does so, the trustee's discretion is removed and the benefit must be paid in accordance with the nomination.
There are strict requirements involved in making a binding nomination. The nomination must be witnessed by at least two adults and may need to be updated at least every three years.
If your superannuation fund does not allow binding nominations, it is important to keep your death benefit nomination form up-to-date. It is also a good idea to deal with the benefit in your will in case your fund pays it into your estate.
If you are employed by the government, specific legislation deals with your superannuation. If you are employed by the Commonwealth Government, the Superannuation Act 1976 applies. If you are employed by the NSW Government, and were employed before 1 July 1985, the Superannuation Act 1916 (NSW) applies. The NSW Act was amended so that after 19 January 2001 same-sex partners could receive the death benefit.