Navigating the responsibilities that follow the passing of a loved one can be overwhelming. Amidst grief, there are legal and administrative tasks to manage, and one of the legal considerations when managing an estate is whether probate is required.
While probate is often a necessary step after someone dies, in some cases it may not be required. Understanding the circumstances when probate can be bypassed in Queensland can help save time, money, and additional work for the deceased’s family.
This article outlines some key scenarios where a grant of probate may not be necessary in Queensland. The information is general only and it is important to get professional advice that is tailored to your circumstances when administering an estate.
What is Probate?
Probate is an official order granted by the Supreme Court of Queensland. It essentially confirms two things: firstly, that the deceased person’s Will is a valid, final testamentary document, and secondly, that the executor(s) named in that Will have the legal authority to manage and distribute the deceased’s assets according to the Will’s instructions.
Key Scenarios Where Probate May Not Be Required in Queensland
While obtaining probate is common and often necessary in the estate administration process, Queensland law does not mandate it for every estate. The necessity for probate depends on various factors, primarily the type and value of the assets held by the deceased and the requirements of the institutions that hold those assets (like banks or the land registry).
The following common scenarios may allow an estate to be administered without a formal grant of probate.
Assets Held as Joint Tenants
One of the most frequent reasons probate is not needed is when assets are co-owned between the deceased and another/s as ‘joint tenants’ as opposed to ‘tenants in common’.
- Joint Tenancy: When individuals own an asset as joint tenants, they share an equal undivided interest in that asset. The distinguishing feature of joint tenancy is the ‘right of survivorship’. This means that when one joint tenant dies, their share automatically passes to the surviving joint tenant(s) by operation of law. The deceased’s share does not form part of their estate to be dealt with under their Will.
- Tenants in Common: Conversely, if an asset is held as tenants in common, each owner holds a distinct, identifiable share (for example, 50/50 or any other proportion). Upon the death of a tenant in common, their share does form part of their estate and can be distributed according to their Will (or the rules of intestacy if there is no Will).
Examples of assets commonly held as joint tenants include the family home and joint bank accounts. If a married couple owns their house as joint tenants and one spouse passes away, the surviving spouse automatically becomes the sole owner. The relevant forms and proof of death are filed with Titles Queensland to transfer ownership.
Small Estates / Low-Value Assets
Often, if the deceased’s estate consists only of assets with a relatively low value, financial institutions or other asset holders may agree to release these assets without requiring a grant of probate.
There is generally no defined monetary threshold of what constitutes a ‘small estate’. Rather, this is dictated by the internal policies of individual financial institutions. Banks, credit unions, and building societies often have internal limits – for example, they might release funds from an account holding less than $20,000, $30,000, or sometimes up to $50,000 without sighting probate. These thresholds can vary between institutions.
Assets with Binding Beneficiary Nominations
Certain types of assets allow the owner to nominate a beneficiary who will receive the asset directly upon the owner’s death. These assets generally do not form part of the deceased’s estate and do not require probate for their distribution.
Superannuation
If the deceased made a valid Binding Death Benefit Nomination before their death, the superannuation fund is legally bound to pay the death benefit directly to the nominated beneficiary(s) (such as a spouse, child, or financial dependant). These funds bypass the estate entirely.
If the nomination is non-binding, the superannuation fund’s trustee has discretion in deciding who receives the death benefit (although they will generally consider the nomination). The trustee might decide to pay the benefit to the deceased’s estate, in which case probate may be needed if the amount is substantial.
Life Insurance Policies
If a life insurance policy has a specifically nominated beneficiary, the policy proceeds are usually paid directly to that person and do not form part of the deceased’s estate.
If the policy nominates ‘the estate’ as the beneficiary, or if no beneficiary is nominated, the proceeds will be paid into the deceased’s estate, and probate may be required to deal with these funds.
What if There is No Will?
If a person dies ‘intestate’ (without leaving a valid Will), probate is not applicable. However, this does not necessarily mean that no court involvement is needed. To administer an intestate estate, an eligible person (usually the closest next of kin, such as a spouse or adult child) may need to apply to the Supreme Court for ‘letters of administration’. This grant provides the appointed administrator with the legal authority to collect the deceased’s assets, pay their debts, and distribute the remaining estate according to the pre-determined rules of intestacy set out in Queensland legislation.
How to Determine if Probate is Needed for a Specific Estate
Following are some practical steps for executors or family members to take to determine if probate is necessary:
- Compile a detailed list: Create a comprehensive inventory of the deceased’s assets (i.e., bank accounts, real estate, shares, superannuation, vehicles, personal belongings) and liabilities (for example, mortgages, loans, credit card debts).
- Identify ownership: For each asset, determine precisely how it was owned – in the deceased’s sole name, as joint tenants, or as tenants in common.
- Contact institutions: Reach out to each bank, superannuation fund, share registry, insurance company, and any other relevant institution and enquire about their specific requirements for releasing or transferring the assets they hold. Ask what their threshold is for requiring a grant of probate.
- Review the Will: If there is a Will, examine its contents for clarity, the nature of the beneficiaries, and any complex instructions.
- Seek legal advice: Whether or not probate is required, seeking legal advice can help you determine the best approach to administering an estate, particularly if the circumstances are complex, there are disputes between beneficiaries, or challenges to the validity of the Will.
Conclusion
In Queensland, a grant of probate is not mandatory for every deceased estate. Assets held in joint tenancy, genuinely small estates where institutions waive the need, and assets with binding beneficiary nominations are common instances where probate may be avoided.
While this article provides general guidance, every estate is unique. The rules surrounding estate administration can be complex, and the consequences of incorrectly administering an estate or proceeding without probate when it is required (or preferred, even if not required) can be significant, potentially leading to personal liability for the executor.
If you or someone you know wants more information or needs help or advice, please call 07 3261 0400 or email ka***@******************om.au.
Rod Holloway was born in Boondall and was educated in the area.
Karen Kerr is the Practice Manager and Senior Paralegal who has worked in a number of firms over the years and has now worked at Rod Holloway & Co in excess of 25 years.