Why are probate costs payable?
After a loved one has passed away, the law requires that the deceased’s
- private and business affairs be finalised,
- unpaid bills and expenses be paid, and
- assets be dealt with in accordance with the last binding will of the deceased.
This means that the executor of the deceased’s will must appoint an informed and proficient estate lawyer and unsurprisingly, lawyers in private business will charge for their services.
As such the questions that many people ask are as follows:
- Who is liable to pay probate costs
- How much are probate costs, and
- When must probate costs be paid.
Who pays probate costs?
The deceased’s estate is required to pay probate costs and not the executor personally. The executor incurs probate costs on behalf of the deceased estate and is entitled to be indemnified for those costs from the assets of the estate.
If there is no will and the deceased died intestate (which means there is no will), then the convention is for a family member of the deceased to make a sensible and reasonable decision as to the costs of the funeral.
It is usual to expect that the funeral costs would be of a reasonable amount considering the value of the deceased person’s estate.
It is customary in Australia that friends and relatives celebrate the life of their loved one following the funeral. The costs of such activities are the responsibility of the family members and at law, are not payable by the deceased’s estate.
Are the deceased’s funeral direction’s binding?
Most wills of deceased person’s specify the deceased’s wishes concerning the disposal of their body.
At law, an executor is not bound by the deceased’s wishes concerning the disposal of the body because “wishes” are not binding on the executor. Most executors however will follow the deceased’s intentions.
How much are probate costs?
It depends on the size of the estate (i.e. how many assets and liabilities are there) and the gross value of estate assets (before deducting liabilities such as mortgages, loans and other expenses). Simply
- A smaller the size and value of the estate, the lesser the amount of work required to obtain probate and to administer estate assets and the lesser the cost; and
- The larger the size and value of the estate, the larger amount of work required to obtain probate and to administer estate assets and the greater the cost.
What’s included in probate costs?
Probate costs include
- Government scaled costs for obtaining a Grant of Probate from the Supreme Court (Scaled Probate Costs), and
- Negotiated legal costs for administering the assets and the liabilities of the estate (Administration Costs)
Work undertaken in respect of Scaled Probate Costs
The legal services covered by the scale rate include: ·
- Taking instructions on obtaining a grant of probate or letters of administration ·
- Verifying details of assets supplied by the executor (where required) ·
- Preparing and publishing a probate notice called “Notice of Intended application”
- preparing all Supreme Court documents required to support the application for probate including Summons for Probate, Probate, Inventory of Property, Affidavit of Executor and providing the will of the deceased (and any codicils (amendments) to the will) and death certificate
- attendance on executor to sign documents
- attendance on court to file the probate application and to pay a Supreme Court filing fee (can be substantial)
- lodging and uplifting documents ·
- answering requisitions from the Supreme Court·
perusing Grant of Probate and advising executor/administrator.
Fixed legal fees payable to the Estate lawyer
|Gross value of NSW assets
|Sliding scale LEGAL fees
|$0 and $30K||$560 and $959|
|$30K and $150K||$960 and $1,668|
|$150K and $1 million||$1,670 and $5,469|
|$1 million and $3 million||$5,470 and $8,790|
|$3 million and $5 million||$8,800 and $11,000|
|$5 million and $10 million||$11,000 and $15,500|
|$10 million and over||$15,500|
Work undertaken for negotiated administration costs
Such Administration and other professional costs include but are not limited to: ·
- sorting through estate papers and items
- advising on taxation and meeting the requirements of the Australian Taxation Office, including preparation of returns
- obtaining valuations/appraisals of assets/debts and identifying estate and other assets (for example, superannuation, insurance, etc.)
- advising on the rights of other parties to challenge the will
- advising on complex questions of interpretation of the will
- overseeing transmission applications, all transfers and realisation of assets
- conducting enquiries and research to ascertain the existence of assets
- preparing and publishing a Notice of Intended Distribution and transmitting estate assets
Costs payable for administration work
Most law firms will charge at an hourly rate that reflects the expertise and competency of the firm and the lawyers undertaking the work. Estate lawyers are required by to make a detailed written costs disclosure and are required to enter into a detailed written cost agreement.
CHARTERLAW LEGAL DISCLAIMER: The information provided here is general and based on the law and administrative practice as at the date of this document. The law and its application and administration may change at any time. The information provided is general in nature and you must seek advice before adopting any of the advice or strategies that may be outlined in this paper.
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