Estates
This comprehensive and practical guide assists practitioners to advise and act for clients in all types of estate matters.
An application for probate or letters of administration can be made with ease and confidence. The guide features detailed commentary and all necessary forms and precedents for obtaining a grant, getting in assets and making the distribution. Deeds of release and indemnity and deeds of family arrangement are included.
Recent updates can be viewed on Obiter - our blog.
Guides in this publication
MATTER PLAN
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“ Contents Overview1 ”
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“ In the legal profession the term ‘costs’ refers to the fees and other expenses a solicitor charges a client for their professional services and other payments that arise out of the provision of legal services, including disbursements such as court fees. Costs are one of the most heavily regulated ... ”
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“ Nature of disclosure1 Timing of disclosure2 ”
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“ Costs disclosure is not required in relation to certain clients, described in the legislation as ‘sophisticated clients’ or ‘government or commercial clients’ as defined by the relevant legislation to include clients such as lawyers, law firms, public companies, liquidators and government entities. ... ”
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“ Cost agreements are not always required although clearly as between the practitioner and their client there will be disclosure but without the need for formal compliance with the regulation. The limits are: ”
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“ In NSW & VIC there is a standard costs disclosure for fees under $3,000 which is included in the precedents. If the total legal costs in a matter (excluding GST and disbursements) are not likely to exceed $3,000 (the higher threshold), a law practice may, instead of making a disclosure under ... ”
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“ Knowing that clients are disinclined to read, sign and return cost agreements, the letter sending them usually provides that unless heard to the contrary the practice will assume agreement. There will almost always be a later opportunity to have the agreement signed. Of course, many practitioners ... ”
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“ Costs are remuneration for professional work when acting in the capacity of a barrister or solicitor. Payments to a practitioner for work which is not professional work, are not costs. Disbursements are payments made, or liabilities incurred in the course of practice and which the practitioner is ... ”
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“ Firms are required to provide an estimate of the total of costs, excluding GST and disbursements, and information on the impact of any significant change to these costs. A law practice must take all reasonable steps to satisfy itself that the client has understood and consented to the proposed ... ”
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“ What is a disbursement Disbursements are payments made, or liabilities incurred in the course of practice, and which the practitioner is bound to pay whether put in funds by the client or not; or payments which, by established custom and practice of the profession, the practitioner is bound to pay. ... ”
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“ A lawyer may request money on account of fees be paid into a trust account before the commencement of work. This is particularly so in criminal and other court matters where the inclination to pay may wane with an unwanted outcome. The funds may cover legal fees as well as disbursements and the ... ”
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“ The costs agreement will set out the billing cycle. Commonly a regular monthly billing cycle is adopted covering work undertaken during the previous month. ”
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“ A lump sum invoice is one which sets out a recital describing the legal service provided and a total amount. An itemised invoice is one which sets out in detail each of the legal services provided, the date they were provided, and the cost for each service. An itemised invoice allows for an invoice ... ”
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“ A law practice cannot charge for the time spent in preparing an invoice. A law practice cannot charge for the time spent in preparing an itemised invoice for a client who has already received a lump sum invoice. ”
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“ All bills should be accompanied by a written statement setting out the avenues that are open to the client in the event of a dispute and any time limits that apply to the taking of such action. Under the uniform law in NSW and VIC each bill or covering letter must be signed by a principal of the ... ”
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“ In 1991 the Australian Competition and Consumer Commission released guidelines to assist businesses in the withdrawal on one and two cent pieces. In the purchase of goods or services for cash, businesses were advised to round the final payment: ”
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“ – When to charge and how to charge Goods and Services Tax (GST) is a broad-based tax of 10% applied to most goods and services, including legal services. Businesses are required to register for GST if their turnover exceeds the $75,000 threshold. If turnover is less than $75,000 than registration ... ”
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“ Reducing fees can create good will but needs to be handled with care as some take offence to the implication that they cannot afford to pay for the work they have retained. It is also a hard won reality that comes from experience that people are inclined not to value any advice given for free. ”
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“ Credit terms are quite common and need to be clearly documented and administered. ”
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“ Notification of rights is a requirement in all states and is found in all example invoice precedents. If the client has not been advised of their rights in a costs agreement, then practitioners must advise the client of their rights at the time of issuing the invoice. ”
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“ Monthly accounting for work in progress is recommended in order to achieve target lockup days. If debtors are not followed up promptly cash flow reduces making it imperative to adopt a debtor’s policy for effective debtor control. All overdue accounts must be followed up promptly and repeatedly. ”
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“ When a retainer is terminated before completion, a practitioner may claim costs for the work done to the date of termination on a quantum meruit basis if: The client terminates the entire retainer; ”
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“ When there are costs owing to the practitioner from the client, the lawyer may retain possession of the client’s documents which are legitimately in the practitioner’s possession. However, the Australian Solicitors’ Rules specify that when a practitioner claims to exercise a lien for unpaid legal ... ”
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“ If a practitioner has an equitable charge over the client’s property incorporated into the costs agreement, ordinarily the practitioner could exercise that power in seeking payment of costs. However, general charges such as a charge over ‘all my estate, rights, title and interest in and to any real ... ”
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“ Sound financial management is absolutely critical to the success of the law practice. There is a high correlation between practices with poor financial management and increased probability of experiencing professional negligence claims. The link is clear. Principals, who do not manage their ... ”
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“ Methods of payment include: Credit card; ”
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“ All By Lawyers cost agreements include the following authority to transfer money to pay their invoices: Trust money ”
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“ Lawcover recommends that practitioners use the costs assessment scheme to recover costs. Instituting proceedings against a disgruntled client who refuses to pay an outstanding bill exposes practitioners to the risk of a cross-claim in negligence being filed. The advantage of the cost assessment ... ”
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“ The following outline of costs assessment was written for NSW but the procedure is similar in the other states. This publication will be expanded to cover cost assessment in the other states in due course. In the interim refer to the relevant State Supreme Court. NSW Procedure ”
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“ A client may be entitled to complain to the Legal Services Commissioner about a costs dispute. If the complaint is made after the law practice or client has already applied for assessment of such costs, the assessment will ordinarily be stayed until the complaint has been determined. Similarly, if ... ”
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“ y trusts? For clients with substantial assets, complicated families or family members who have medical or personal problems, the use of testamentary trusts has multiple benefits over usual wills, summarised below. ”
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“ Online Registry NSW Supreme, District and Local Courts NSW Supreme Court ”
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“ The types of grant that may be sought include: A grant of probate. Where the deceased has a will appointing an executor who is willing and able to apply for probate. ”
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“ Taking good instructions The use of precedent Retainer Instructions ensures that all important issues are considered, instructions which cannot be contradicted later are recorded, costs discussed and the scope of the retainer clearly defined. ”
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“ Remains and funeral wishes It is not uncommon for a testator to give directions in a will in relation to funeral arrangements or to express a wish in relation to organ donation. Whilst these directions are normally known to the family, it is prudent to view the will at the earliest opportunity. ... ”
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“ Of note: Where the firm is to act for multiple parties – that is, a number of executors – it should always be pointed out that the firm cannot act or continue to act where there is a material conflict of interest. ”
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“ ? There is no statutory requirement to obtain a grant. Most banks and financial institutions will not insist on a grant if the amount they hold for the deceased is less than $50,000. In these circumstances they will normally accept evidence of death and entitlement and the signing of indemnities by ... ”
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“ Funeral expenses In order to pay a person’s funeral expenses most banks will allow funds to be withdrawn from the estate before a grant is obtained. ”
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“ If within three months of death an executor cannot be found, or refuses to renounce or prove the will, then the other executors, if any, can apply for probate. If there are no other executors then any interested party may apply for administration, with the will annexed: section 75 Proceeding where ... ”
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“ If an executor appointed by a will does not wish to proceed in the role, they must sign a renunciation, which is then filed with a subsequent application for grant for probate or letters of administration. Where there are no remaining executors named in the will the appropriate person applies for ... ”
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“ Estate taxes and duties Taxation generally ”
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“ Who is a beneficiary? A beneficiary is a person or entity to whom a bequest is made in a will. However, for the named person to be a beneficiary, both the will and the bequest must be valid. It is incumbent upon an executor to establish the validity of the will and then to administer the estate ... ”
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“ Challenging a will questions its validity. Contesting a will questions the fairness of its provisions. ”
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“ When a challenge to the terms of a will is contemplated prior to the grant of probate, it is necessary to put the court on notice of the proposed challenge. This may be achieved by the lodgement of a caveat, which ensures that the caveator is notified and has the opportunity to approach the court ... ”
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“ It is important to consider whether the cause of death gives rise to any compensation or damages, for example, if death was a result of a motor vehicle or work accident. See the Motor Vehicle Accident or Workers Compensation guides for more information. If the deceased was a victim of crime, does ... ”
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“ Advertising The Notice of Intended Application for Probate must appear on the Online Registry at least 14 days before the filing of the Summons. Fees to advertise on the register are paid by credit card, and notices are published within 10 minutes of submission. ”
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“ A grant of probate has no effect in other jurisdictions. For example, if you have assets in Queensland as well as in New South Wales, then a grant of probate made in Queensland cannot be used to deal with the New South Wales assets. In the case of minor assets however enquiries should first be made ... ”
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“ An executor is entitled to receive a commission or percentage for their 'pains and trouble as is just and reasonable' as the court directs provided they have not neglected their duties in the role: s 86 Probate and Administration Act 1898. An order for commission is a discretionary one and 'pains' ... ”
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“ In practice the award of commission is usually agreed between the personal representative and the interested beneficiaries. As the commission payable to the personal representative for the administration of the deceased estate is a testamentary expense, the interested beneficiaries are those ... ”
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“ The application for commission is incidental to passing or verifying accounts with the court and is a two-stage procedure: 1) verifying accounts; and 2) assessing commission. The entire procedure can take up to 12 months depending on the amount of requisitions received from the Registrar in ... ”
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“ Depending upon the nature of the estate and the sophistication of the legal personal representatives, some executors may wish to deal with administration themselves, setting up an interest bearing estate account to consolidate funds before distribution, and so on. This will also be the case where ... ”
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“ VOI ”
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“ Stamp duty of $50 is charged on a transfer of dutiable property from the executor to a beneficiary in accordance with s 63 of the Duties Act, this includes a transmission application by a devisee, beneficiary or next-of-kin. Revenue NSW identification requirements when stamping ”
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“ A notice of death will be necessary to transfer any jointly owned property to the surviving proprietor. Property owned solely by the deceased or as tenants in common may need to be transferred into the executor’s name. A transmission application and, where there is a mortgage or charge on title, ... ”
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“ The foreign resident capital gains withholding payments provisions of the Taxation Administration Act 1953 came into force on 1 July 2016 and were amended on 1 July 2017. Essentially, when a property with a market value of $750,000 or more is transferred, the transferee is required to withhold ... ”
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“ Prior to preparing a deed of family arrangement, some research must be carried out to ensure a client is advised of all the potential consequences, including the implications and requirements of any applicable taxation or duty issues, and the effect on any duty exemptions which might otherwise ... ”
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“ As a general rule all of the property of the deceased is available to pay the debts of the estate including funeral costs, other testamentary expenses and any other debts which have been incurred. The executor must not unnecessarily diminish the estate by paying claims they are not bound to pay and ... ”
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“ For work carried out up to the grant of probate, a solicitor cannot charge fees higher than the scales set by Schedule 3 of the Legal Profession Uniform Law Application Regulation 2015 and, if a law practice is required to perform any work in addition to that for which Part 1 makes provision, such ... ”
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“ Keeping proper accounts Executors are obliged to keep ‘proper’ accounts to provide clear and accurate information to the beneficiaries. What is ‘proper’ will depend on the nature of the estate. The minimum obligations imposed are: ”
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“ It is important to appreciate s 92 of the Probate and Administration Act 1898, which is reproduced below. We have highlighted the word 'and' as many practitioners do not realise that both the six month period after death and the period specified in the notice of intended distribution of an estate ... ”
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“ Depending on the circumstances of the estate it may be appropriate to make an interim distribution to the beneficiaries of part of their entitlement. Keeping in mind s 92 the executor should only do so if they are certain that the estate retains sufficient funds to cover all liabilities and the ... ”
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“ The sample letters are basic in design, and will need to be adapted to suit the particular situation. Even where a formal administration account is not necessary in the circumstances of the matter, it is suggested that preparation of a distribution statement will be of benefit to executors and ... ”
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