Brisbane’s Legal Lowdown: Understanding Probate – Live from the Brisbane Ekka

Sofie: And that brings us to that time of the week again Brisbane’s Legal Lowdown with Attwood Marshall Lawyers.

This is where we unpack legal issues that impact all of us at some point, and today we’re diving into a topic that comes up often after the loss of a loved one; something called probate. It’s a word you may have heard before, what does it actually mean? And more importantly, when is it needed?

To help us understand the world of probate, but also able to answer questions that you may have when it comes to estate issues, we’re joined by Attwood Marshall Lawyers Estate Litigation Senior Associate Duncan MacDougall. Good afternoon to you.

Duncan: Good afternoon, Sofie thanks for having me again.

Sofie: I know we’re talking about probate today, Duncan, but this is your first ever Ekka.

Duncan: I know. Can you believe I’ve been in Australia ten years now and this is the first one. It’s all happening.

Sofie: Stick around a little bit this afternoon to go and have a look. Do you know if you walk into the wood choppers arena they might just hand you an axe with those guns.

Duncan: I’ll try my best.

Sofie: See whether or not you might want to try your hand.

Duncan: I picked up a few tips and tricks when I lived back home.

Sofie: You know your way around a woodchop.

Duncan: Yeah, that’s it.

Sofie: Alright let’s get to matters at hand. Probate. It’s a term we often hear when it comes to issues of estate planning. What is it and when is it needed?

Duncan: Yeah, so it’s this term that’s thrown around after somebody passes away and a lot of people just don’t know what it actually means. What it is, I tell people to think of it like your golden ticket to administer an estate. So, as an executor who’s appointed under the will think of it as like a court tick of approval that says, yep that’s a valid will and that’s an entitled person to administer an estate. So, things like financial institutions, like banks etcetera, they’re not going to release money just to anyone with a name on a piece of paper. They’re going to want some sort of court authority saying, we can now release it to the estate.

Sofie: So, is it a process that every will has to go through?

Duncan: Not necessarily. In Queensland, it will all depend on the extent of the assets in the estate at the end of the day. Generally, banks will have their own certain thresholds, so generally speaking, it’s anything below twenty to thirty thousand that you can get away with it by signing what’s called a deed of release of indemnity, basically putting the bank off risk. But anything over that threshold, they will require that. Same with accommodation deposits at nursing homes, share registries, and especially the titles office, there’s only limited circumstances where the titles office where you can get away without one.

Sofie: So when we asked the question why is it needed is it to essentially make sure that the wrong person is not accessing whatever it is that’s been left behind?

Duncan: That’s right so like at the time of somebody ‘s passing there may be another will floating around, there could be issues about the actual validity of that will they’re trying to prove as well. So where probate comes is it gives them authority to say yes this is the last will of the deceased, so when people for instance make claims against the estate or challenge the actual validity of the will, they can actually lodge what’s called a probate caveat putting a stop to the whole process until a court a court authorizes which will is the right will.

Sofie: So, go back to what you mentioned earlier. What are the circumstances where you don’t need probate to deal with an estate?

And that just means basically there’s very little or it’s very clear and there’s no one that is likely to challenge it or that there is any challenge that another will exists?

Duncan: That’s correct. So, sometimes maybe the only asset there is superannuation that had a binding nomination to a direct beneficiary. Maybe there was only joint assets whereby that joint asset will automatically pass to the surviving owner. Or again, it’s a very small estate and there’s no need to actually go down that costly and expensive process.

Sofie: What happens if you skip probate, and you just transfer or distribute the assets anyway?

Duncan: That runs a big personal liability there on the executor. So, when in doubt, even if you think you can get away with it, the best thing to do is go seek that advice as to whether or not it would be worthwhile to go down that path because there are certain time limits for people to bring certain claims as well so if a distribution happens before a certain time limit occurs and all of a sudden six months later there’s a claim on foot for the estate, all of a sudden the executor is in a personal capacity liable for that. So, a lot of times they may say well I’m the sole beneficiary, sole executor of the estate, I’ve got control of the situation, no real risk, but you never know what can happen.

Sofie: How do banks or institutions then determine if they require probate before they release the funds?

Duncan: Each institution will have its own policies procedures own thresholds.

Sofie: I’m going back to something we’ve spoken about in the past for a listener who wanted some clarity around executors. When we were talking about executors of a will, and you said that you’ve got to be careful about who that is and that sometimes having many is not necessarily a good thing. And in this case, there are three siblings as executors for the will and they don’t all speak to each other.

One of them then has said you know should we be advising our parents to make changes and have one of the siblings be the executor, be very clear about their wishes, but not necessarily have all three as executors on the will?

Duncan: Correct. And during that estate planning process, whilst that person’s still alive, having those conversations with your solicitor. On the flip side of things even if three, four people are appointed as executors, you’re not obligated to take on that role. It doesn’t have to be everybody applying for probate, given maybe one’s interstate, one’s overseas, there’s issues of tax issues that come up with that again if an executor is overseas, so sometimes they just sign what’s called a renunciation saying I renounce all my right and title to making an application for probate, and just let one sibling in that situation that you’ve presented to make that application and deal with getting that golden ticket.

Sofie: Okay. And then finally just on the issue of back to probate. What are the risks that might be things that people don’t consider if you delay, or you avoid applying for probate altogether in a situation where one really is required?

Duncan: Again, it all comes down to those risks of people making claims against the estate. Whether that be a family provision application where somebody puts up their hands saying I have not been adequately provided for under a will, or somebody actually challenges the validity of the will, so saying that person did not have what’s called testamentary capacity at the time they signed the will, they didn’t know and understand the contents of the will, know and understand what they were doing, in which case everything comes to light, medical records need to be produced, the solicitor’s will file needs to come to light, all these sorts of things to assess what is the valid will and that generally comes before a judge.

Sofie: It’s a lot for us to wrap our heads around but really important that these conversations happen because they may be then the springboard at around the family table tonight. And it’s really interesting, while you and I have been doing these segments together, and not just with you but with the other lawyers who’ve come in to talk to us from Attwood Marshall, it’s prompted conversations at our house that we had not had. And I find it really peculiar that still within families there are some families where discussing these things is really open and easy and transparent, and others where you still don’t want to talk about it and you know that at the end of the day the outcome is going to be the same. People will eventually pass away and no one will know what the heck is going on.

Duncan: That’s it and I tell people all the time I know it’s a hard conversation to have but sit down with your family, you know and have these hard conversations.

Sofie: It’s harder, I think, to deal with not having had them.

Duncan: Yeah exactly. And you know the mess that’s going to create if everybody’s blindsided. I find people action things when they’re surprised by an outcome.

Sofie: And as a Mum, I think probably the hardest thing to wrap my head around was you saying you know that even my adult children really should go down the path of making sure that they have got some things in place. And I guess you don’t even want to contemplate the notion of that needing to be something that you have to deal with in life, but again we’ve gone, okay, this is the reality of the world, especially now that you know you’re moving out, you’re living with a partner, like all of these sorts of extra bits come into play that you take the time to start the conversation then turn the conversation into action.

Duncan: That’s right. And most people take the position, oh it’s not going to happen to me, I have a pretty linear family, none of these issues apply to me, until they do. Unfortunately, until they do and then that’s when it keeps us employed because we’re all constantly advising people and the risks that come with that.

Sofie: Well, I don’t think we had to twist your arm to come down and do this segment at the Ekka this year. Clearly you were quite happy to do it. I hope you enjoy your afternoon, have a wander around. There’s a pretty impressive food court right behind us that you can smell.

Duncan: I’ve been told I have got to get a dagwood dog and then a cone.

Sofie: Oh, strawberries that is what you want. You’re really going to sound like you’ve just arrived off the plane if you go and ask for a cone. Strawberry sundae!

Duncan: Okay.

Sofie: Dagwood dog, look you know that for some people is a delicacy, for some of us I’ve now lived fifty almost fifty-five years on this planet and I’m yet to have one. Just not my thing. But I’m willing to try some of the other delicacies. Go and enjoy your afternoon

Duncan: I’ll go on an adventure.

Sofie: Good on you. That is Duncan MacDougall who joins us from Attwood Marshall Lawyers. He is the estate litigation senior associate there. And of course they’re always happy to take your call, you can either find them online attwoodmarshall.com.au

Get in touch with us on 133 882 if you’d like their number, we’re happy to pass it on for you and your family. Thanks again.