Dealing with the deceased’s bank
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- Powers of Attorney cease immediately upon the deceased’s death, so you can no longer use them to access bank accounts or transact on the deceased’s behalf.
- Most banks will release funds for funeral expenses before probate is granted, provided you supply the original funeral invoice or receipt. If the account lacks sufficient funds, the bank may offer a partial payment. Should the bank require probate before releasing funds, some funeral directors will wait for payment until probate is obtained, although they may charge a fee for this delay.
- Joint accounts pass to the surviving account holder and are not part of the estate. They can be continued or closed by the survivor, who receives the entire balance.
- Term deposits generally should remain until maturity to maximise interest. However, if the bank permits and urgent funds are needed by the deceased’s family, early termination may be considered.
- Accounts solely in the deceased’s name typically require a grant of probate before the bank releases the funds to the executor. Many banks have a threshold (often around $20,000) below which they’ll release funds to a beneficiary who provides a written indemnity promising to repay if required. Ask the bank about its policy on releasing small balances.
- If urgent cash is needed before probate—for essential support of a spouse or children—the bank may require a “Probate Bond” purchased through an insurer. The insurer guarantees repayment if later circumstances prove the withdrawal was not authorised (for example, if a more recent will is found).
- To prevent unauthorised access, request the bank to place a hold on all relevant accounts until the necessary formalities are completed.
- Business accounts held in a company’s name continue to operate under the company’s rules.
- Debit balances on unsecured personal loans are paid from estate funds. If a loan is secured against a gifted asset, check the will to see whether the beneficiary must assume responsibility for that debt.
- Property loans can usually continue accruing interest until the property is sold. Pay interest when due if possible, or inform the lender if delays are expected while arranging a sale.
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Cancelling direct debits
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- Many people have monthly subscriptions (e.g., streaming services, gyms, insurance). Ask the bank for a list of direct debits on the deceased’s account and request a hold or cancellation to prevent further charges.
- For direct debits linked to a credit card, you must contact each service provider individually or cancel the credit card itself to stop these payments.
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Credit cards
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- Cancel the deceased’s credit cards. Check if the card issuer provided insurance for the outstanding balance, which could relieve the estate of paying that debt.
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Insurance
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- Identify any insurance policies (e.g., home and contents, vehicle) and notify the insurer of your role as executor and who occupies any insured properties, ensuring coverage remains adequate and current.
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Household items
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- If beneficiaries agree on the value of household goods, they can take items as part of their entitlement. Otherwise, sell them (e.g., to a second-hand dealer or online) and record proceeds as estate funds. If beneficiaries consent, items can be donated to charity or disposed of if they have no value.
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Nursing home deposit
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- Contact the nursing home or aged care institution to learn the process for refunding any deposit. If the response is unsatisfactory, review the contract’s terms to understand your rights and obligations.
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Real estate
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- If selling property, first have it transmitted into the executor’s name as “personal representative.” After securing a suitable buyer and price, the executor signs the contract of sale on behalf of the estate.
- Consider capital gains tax (CGT) implications before distributing sale proceeds. Obtain an estimate of tax payable from an accountant.
- A professional valuation may help determine a fair listing price or assist with in-specie transfers (transferring property directly to a beneficiary) and CGT assessments.
- For property held as joint tenants, transferring title to the surviving co-owner is simpler and can be arranged via a solicitor.
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Shares
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- Shares can be sold through a stockbroker with proceeds going to the estate. Alternatively, transmit them into the executor’s name to retain the investment. Each company has its own process for share transmission.
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Debt collection
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- The estate can recover debts owed to the deceased, and likewise, it can be sued for debts the deceased owed.
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Debt due by beneficiary
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- Beneficiaries remain liable for any debts owed to the deceased at the time of death unless the will or a mutual agreement forgives these debts.
- Before making distributions, provide each beneficiary with a statutory declaration to confirm no such debt exists or to acknowledge the debt if it does.
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Estate bank account
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- After obtaining probate, consider opening an estate bank account or using a solicitor’s trust account to manage estate funds, pay expenses, and distribute entitlements.
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Gifts to charities
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- Ensure you identify the correct charity, branch, or fund specified in the will. Obtain receipts for any charitable gifts and follow the will’s instructions on who may issue the receipt. If unclear, seek legal advice.
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Cash gifts
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- Make cash gifts when the estate’s financial situation permits—typically after debts and taxes are settled.
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Life interests
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- If the will grants a life interest (often in a home), the beneficiary may use the asset but not sell it. The will usually details who pays for insurance, maintenance, and outgoings, and whether renting or selling the asset is allowed.
- As executor, monitor this arrangement. When the life interest ends, transfer the asset to the residuary beneficiary.
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Varying the distributions specified in the will
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- A beneficiary may disclaim their benefit or request it be paid to someone else. Check the will to see how to handle disclaimed assets—often they return to the estate’s residue. If in doubt, seek legal advice.
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Intestacy
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- If no viable beneficiary can receive a gift, it typically forms part of the estate’s residue, possibly triggering intestacy rules for distribution.
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Superannuation
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- Superannuation (including attached insurance) may pay directly to a nominated beneficiary, not the estate, if a binding nomination exists. If no binding nomination, the spouse or children may apply to the super fund for benefits.
- The executor may have no role unless the will asks the executor to make submissions to the fund trustee, or if no qualifying recipients exist. Contact the super fund’s trustee or administrator for guidance.
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Insurance benefits
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- Contact insurers to claim proceeds from life or other insurance policies. Unless a specific beneficiary is nominated, these proceeds generally go to the estate.
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Tax
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- Estate income is taxable. Capital Gains Tax applies to sold assets (other than the main residence) that appreciated in value. Lodge annual tax returns, pay required taxes, and don’t distribute all funds until potential tax liabilities are covered.
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Payment to residuary beneficiaries
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- After settling debts, taxes, and distributing specific gifts, the remainder (residue) can be distributed to residuary beneficiaries.
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Financial statements
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- Before final distribution, provide residuary beneficiaries with a detailed financial statement showing assets, income, expenses, and how you calculated their share.
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Receipt and discharge
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- Request each beneficiary to sign a receipt confirming the amount received, acknowledging no debts to the deceased, and indemnifying you from future claims related to that distribution.
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Closing the estate
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- Once all debts, expenses, taxes, and distributions are completed, the estate is fully administered. Signed receipts serve as sufficient acknowledgment that your duties are fulfilled.
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