Preparing for the inevitable: getting your estate documents together
Being the Executor of a person’s estate is hard enough without having to conduct a search for their important documents.
James has decided to plan for his estate and chose the three people he trusts the most to act as the Executors namely, John (his son), Margot (his daughter) and Jack (his best mate) (jointly known as “the Executors”). In his will, James left his property in Byron Bay (“Property”) to his de-facto partner, Melissa.
When his time finally came, the Executors were ready to set the wheels in motion. Everything was smooth sailing until they encountered one problem – they could not transfer his Property to Melissa. The cause? The Executors could not locate the certificate of title to the property in the pile of documents left by James with Margot when he was still alive. To make matters worse, Melissa now thinks that the Executors are depriving her of the property and is threatening to bring legal action against them.
When the search yielded no positive results after months of trying, the Executors decided to apply for a replacement certificate of title with the land titles office. Ordinarily this would have been a straightforward process. However as the registered proprietor in the lost certificate of title is the deceased and the beneficiary is pushing to have the Property quickly registered in her name, this meant that the Executors would have to do more work to sort out this issue. After devoting so much time and effort to resolving this issue, the property was eventually transferred to Melissa as a new certificate of title was issued in her own name.
Given the case study above, did James plan well enough to avoid this drama? Was there anything James could have done to prevent the acrimony between the family members?
When you choose someone to act as the Executor of your estate, you are giving them the responsibility of taking charge of your estate because you trust them and you are confident that they will carry out your wishes. While this may be taken as a compliment, most people appointed as Executors are unaware of the demands of the role.
Your Executor will have the responsibility of applying for probate, paying liabilities, distributing assets and closing accounts, all according to your wishes. It is a role not to be taken lightly. It could take up a serious chunk of their time coupled with them having to deal with the emotional aspects surrounding the estate and its administration.
In the absence of any issues surrounding the estate, and even with complete documentation, the task of performing these responsibilities is daunting for an Executor especially for a first timer. It becomes more difficult if they encounter setbacks such as not being able to find the required documents or being given the wrong information and having to reconstruct information from scratch.
To avoid delay and what might become massive inconvenience and expense, it only makes sense to help your Executors by ensuring they have access to everything they need when the time comes.
Here is a list of things you can do for your Executor/s to help them prepare for their role easily:
1. Make sure you have (or know where) your originally executed Last Will & Testament is and that it is up-to-date.
This is the first and most crucial step if you want your Executor to work on your estate. Your Executor can act on behalf of your estate only if they have the originally executed Last Will & Testament. It is therefore important to make sure that it is up-todate, no pages are missing and all pages are signed and witnessed. Your Executor will need this document when they seek probate so make sure they have access to it. For practicality, give your Executor a certified copy of your Last Will & Testament or at least tell them where they can find the document.
2. Prepare an inventory of all your assets and liabilities.
Another document required for probate is an inventory of assets and liabilities of the estate. By preparing the inventory, your Executor will have an easier time in preparing and lodging the application for probate. Assets you may have include bank accounts, properties, shares owned in companies, automobiles while liabilities include mortgage, utilities, mobile phone subscriptions.
When listing down your assets, make sure your assets are properly described. In the case of properties, for example, list down all your properties, indicating the folio identifier, address of property, and whether it is held by you solely or with another person (and name of the other/s, your share in the property and nature of ownership (held as solely, joint tenant or tenants in common). For bank accounts, list down all the bank account numbers and names under which they are held (either by you solely or with another person and their name/s).
Don’t forget to revise the list regularly, whenever you acquire or dispose of a material asset or at least once per year.
3. Prepare a list of contacts of professionals and advisers you come in contact with and introduce your Executor to them.
Much of the time spent by your Executor will be in determining who your contacts are and searching for them. You can help your Executor by introducing them to your contacts or providing them with the names and contact details of your contacts at the very least. Your contacts can help your Executor perform their responsibilities. For example, the solicitor whom you entrusted with the safekeeping of your originally executed Last Will & Testament can give it to your Executor and can possibly assist in applying for probate and administering your estate. Then there’s your accountant, financial planner and life insurance agent.
4. Do you have all your title documents?
If any documents you are required to have are lost or missing it would be better if you arrange for their replacement now rather than requiring your Executor to do so after you’re gone.
This is especially true when it comes to title documents for real estate which are the most important documents your Executor must have. Without those documents they will not be able to transmit the property to the beneficiaries (including, if appropriate, to themselves). Instances when you may not have custody of the physical title documents include where they’re held by your mortgagee (even after the loan has been fully repaid) or simply lost over time and several house moves.
If the property is mortgaged but fully repaid, you must arrange for the formal discharge of the mortgage and obtain the physical copy of the title document which should be issued in your name.
If the physical copy of the certificate of title is lost, prepare and lodge an application for replacement together with supporting documents with the land registry services.
Some Australian states do not issue paper documents of title eg. Queensland. If the property is located in Queensland, make sure you have a printout of the Registration Confirmation Statement of the property which has the name of the registered proprietor from the Queensland Land Titles Office.
Victoria gives the registered proprietor an option to have the certificate of title issued either in paper or electronic form. If the property is located in Victoria and an electronic certificate of title is issued, make sure you have a printout of the electronic certificate of title and contact details of the person or entity who has control of it.
5. List down your online accounts
You may want to provide a list of all online accounts together with the login details (e.g. usernames, passwords, answers to secret questions) to your Executor so that they can close or continue using some online accounts. Online accounts you might have include bank accounts, share registry accounts, utilities accounts, social media accounts, email accounts … virtually anything provided online.
6. Make sure your Executor has access to some cash.
Your estate will incur bills such as medical expenses, funeral expenses and legal fees after you pass away. It is best to make sure your estate contains a cash account and give your Executor access to it so that they can pay these bills and other expenses of the estate.
7. Put the documents in a place where your Executor can find them.
Another time-consuming task undertaken by your Executor is locating your documents. You can save time their time by gathering all your important documents together and store them in a safe place for easy access to your Executor. It is advisable to prepare the following documents:
a) Last Will and Testament which is up to date
b) Codicil (if any)
c) Powers of Attorney, general or enduring
d) Appointment of Enduring Guardian
e) Living Will
f) Birth Certificate
g) Marriage Certificate
h) Citizenship Certificate, if naturalised
i) Certificates of Titles
j) Life insurance policies
k) Share certificates, brokerage statements and other documents of title of your investments
l) Binding death benefit nominations which is up to date
m) List of assets and liabilities
n) List of contacts of professionals and advisers
o) Details of any safe or safe deposit box you use
p) Automobile registrations
q) List of online accounts which need to be operated or closed with details of your user names and passwords
The location of the documents should be secure and if possible protected from fire, storm and flood. Ideally you would scan all the documents and create a parallel electronic safe so that if the physical documents are lost or destroyed your electronic copies will be sufficient for your Executor to administer your estate.
By doing these things, you will make life easier for your Executor in performing their duties. Planning ensures that your estate can be implemented with as little fuss and problem as possible and will avoid unnecessary delays and, importantly, fees, costs and charges.
Townsends Business & Corporate Lawyers provide advice on a wide range of probate matters. If you need professional assistance, we can be reached by phone on (02) 8296 6222 or email at firstname.lastname@example.org.