LSB July 2018_Web

WILLS & ESTATES
RISKS IN DEALING WITH
ASSETS OF A DECEASED ESTATE
WITHOUT A GRANT
LESSONS FROM PUBLIC TRUSTEE V CBA & WESTPAC
GRAHAM EDMONDS-WILSON SC, BARRISTER, HOWARD ZELLING CHAMBERS
One of the fundamental duties of the
legal personal representative of a
deceased person is to get in the assets of
the deceased. The assets may include, for
example, monies on deposit with banks,
monies lent by the deceased to third
parties, and interest and dividends due to
the deceased.
If the deceased died leaving a valid
last will, and the will validly appoints an
executor, the executor derives title from
the will and the property of the deceased
vests in the executor from the moment of
the testator’s death 1 . A grant of probate is
evidence of that title such that the grant
of probate of the will is said to have
relation back to the time of the testator’s
death.
There are many things that the executor
can do before having a grant of probate
to administer the estate of the deceased.
These include receiving or releasing debts
which are owed to the deceased 2 . The
exceptions to this general rule mainly
relate to some forms of litigation as
executor 3 . Generally an executor needs a
grant of probate of the will in order to be
able to litigate on behalf of the estate of
the deceased 4 .
The position of an executor should be
contrasted with that of an administrator.
There are two sorts of administrators of
the estates of deceased persons. They
are quite distinct. The first type is the
administrator of the estate of a person
who dies wholly intestate. That is, without
the deceased leaving a valid will. In that
situation there is a grant of letters of
administration to the person with the
highest priority to obtain the grant 5 ,
and the intestate estate is distributed to
beneficiaries who are entitled according
to law 6 . The second type of administrator
22 THE BULLETIN July 2018
is where there is a grant of letters of
administration with will annexed. This
occurs where the deceased dies leaving a
valid will but instead of a grant of probate
of the will issuing to an executor named in
the will, an administrator takes a grant of
letters of administration with will annexed
instead. That can occur for a variety of
reasons. 7
In both these situations the administrator
gets title to act from the grant of letters
of administration by the Supreme Court.
The general rule is that a party entitled to
administration can do nothing until letters
of administration are granted to him or
her. That is because the administrator
derives his or her authority entirely from
the appointment by the Court 8 .
Therefore, in the case where letters of
administration are required to administer
the estate of a deceased person, there is
no person authorised either to receive the
assets of the deceased person or to give
releases to third parties for the delivery of
monies or other assets to the estate until
such time as there is a grant of letters of
administration (whether with or without
will annexed).
In the case of a will appointing an
executor, the position is more complex.
As noted above, the executor of a valid
last will can generally receive assets
and give releases to third parties before
having a grant of probate. Some estate
administrations can be completed without
the practical need for the executor to
obtain a grant of probate. If a person
applies for a grant of probate or
administration of the estate of a deceased
person 9 , the applicant must disclose to