LETTERS OF ADMINISTRATION

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Your loved one has just passed, but they did not leave a will outlining who they wish to receive their estate.

Read the below to find out what is required when a person dies without a will.

WHAT IS LETTERS OF ADMINISTRATION?

Letters of Administration is a document that is issued by the Supreme Court of New South Wales that confirms the deceased died intestate, that is, without a will. It authorises the administrator to administer the deceased’s estate in accordance with the rules of intestacy*.

*To find out more about the rules of intestacy head to our information page on intestacy.

WHO CAN APPLY FOR LETTERS OF ADMINISTRATION?

There are only certain people entitled to a grant of Letters of Administration and that is determined by who survived the deceased and their entitlements pursuant to Chapter 4 of the Succession Act 2006 (NSW).

If the deceased died leaving a spouse, then that spouse has the priority to apply for Letters of Administration.

If the deceased died without a spouse, the application may be made by the deceased’s children.

If the deceased died leaving no spouse or children then the application may be made by:

Parents, if no surviving parents;
Siblings, if no surviving siblings;
Grandparents, if no surviving grandparents;
Aunts or uncles, if no surviving aunts or uncles;

WHY DO I NEED LETTERS OF ADMINISTRATION?

A person’s estate cannot be administered without the court providing them with the legal authority to do so. Asset holders will not release or transfer funds without a grant. There are some circumstances where Letters of Administration may not be required, which is explained below, but for the most part where a person died leaving sufficient assets, the administrator must obtain Letters of Administration.

An administrator or any other person cannot sell property or distribute any assets without first obtaining Letters of Administration from the court.

WHEN IS LETTERS OF ADMINISTRATION NOT REQUIRED?

Letters of Administration may not always be required. For example, if the deceased owned all of their assets jointly with another person, then those assets will pass to the “surviving joint tenant” in accordance with the rules of survivorship. That is, the person that outlives the other joint owner will receive the whole of those assets that were otherwise jointly owned.

Superannuation is also not deemed an asset of a person’s estate unless the trustee of the superfund in which they have invested monies directs payment of the deceased’s entitlement to their estate. Claims for super benefits can be made directly to their superfund essentially bypassing their estate.

Another instance where Letters of Administration may not be required is where the deceased may only hold a small sum of money invested with a bank, for example $10,000.00. Each financial institution will have differing thresholds and requirements as to whether a grant is needed in order to release funds, though usually a certified Death Certificate, declaration the deceased died without a will and proof of identification is sufficient enough to release funds.

WHAT IS THE PROCESS FOR OBTAINING LETTERS OF ADMINISTRATION?

Where there is no will, the person applying for Letters of Administration must take extra steps in order to satisfy the requirements of the Court. These include, in order:

Obtaining the deceased person’s Death Certificate;
Making enquiries as to the whereabouts of any will the deceased may have had;
Ascertaining the extent of the estate i.e values of assets and liabilities, as well as advising all relevant authorities as to the deceased person’s death;
Informing those entitled to the deceased’s estate under intestacy that they are beneficiaries and providing a brief outline of what they can expect throughout the Letters of Administration process;
Obtaining consents to administration or serving notices of application on those who have equal standing to apply for Letters of administration (if required);
Notifying the administrator’s intention to apply for Letters of Administration;
Obtaining any necessary certificate evidence such as birth certificates, marriage certificates, divorce papers;
Preparing the administrator’s application for Letters of Administration which includes a Summons, various affidavits in support, Inventory of Property and Letters of Administration document;
Filing the administrator’s application with the Supreme Court of New South Wales;
Responding to any requisitions (questions) the court may raise as the case may be;

Once the court has issued Letters of Administration, the administrator can then proceed to administer the estate, which includes:

Calling in the assets as the case may be including, closing bank accounts, selling shares, real property and motor vehicles and paying liabilities such as mortgages, loans, credit cards, tax liabilities and any outstanding debts;
Corresponding with the beneficiaries to provide them with reasonable updates as to the administration of the estate;
Advertising the administrator’s intention to distribute the estate;
Distributing the estate assets in accordance with the rules of intestacy*.

*To find out more about the rules of intestacy head to our information page on intestacy.

WHAT IS THE COST OF OBTAINING LETTERS OF ADMINISTRATION?

The cost to obtain Letters of Administration will ultimately depends on the value of the estate.

The costs associated solely with the application for Letters of Administration, but not administering the estate, are determined by a scale of fees set by the Legal Profession Uniform Law Application Regulation 2015 as follows:

Disclosed value of assets	Costs payable
Not exceeding $30,000	$560 Plus $13.33 for each $1,000 up to $30,000
Exceeding $30,000 but not exceeding $150,000	$960 Plus $5.90 for each $1,000 in excess of $30,000
Exceeding $150,000 but not exceeding $1,000,000	$1,670 Plus $4.47 for each $1,000 in excess of $150,000
Exceeding $1,000,000 but not exceeding $3,000,000	$5,470 Plus $1.66 for each $1,000 in excess of $1,000,000
Exceeding $3,000,000 but not exceeding $5,000,000	$8,800 Plus $1.10 for each $1,000 in excess of $3,000,000
Exceeding $5,000,000 but not exceeding $10,000,000	$11,000 Plus $0.90 for each $1,000 in excess of $5,000,000
Exceeding $10,000,000	$15,500

There are also filing fees on the application itself set by the Supreme Court of New South Wales, calculated on the gross value of the estate as follows:

less than $100,000	$0.00
$100,000 or more, but less than $250,000	$772.00
$250,000 or more, but less than $500,000	$1,048.00
$500,000 or more, but less than $1,000,000	$1,607.00
$1,000,000 but less than $2,000,000.00	$2,141.00
$2,000,000 or more but less than $5,000,000.00	$3,568.00
$5,000,000 or more	$5,948.00

In addition to the above costs, there may be other associated costs with obtaining a Death Certificate and determining estate assets such as property searches.

WHO PAYS THE COST OF THE LETTERS OF ADMINISTRATION APPLICATION AND ADMINISTERING THE ESTATE?

The cost of the Letters of Administration application and administering the estate is paid out of the deceased’s estate and not out of the administrator or beneficiary’s pocket.

IS THERE A TIMEFRAME FOR WHEN THE ADMINISTRATOR SHOULD OBTAIN LETTERS OF ADMINISTRATION?

Applications for Letters of Administration should be made within 6 months from the date of death. If they are not, then the administrator must file an additional affidavit with their application explaining the reason for their delay.

HOW LONG DOES IT TAKE TO OBTAIN LETTERS OF ADMINISTRATION?

One of the initial steps in obtaining a grant of Letters of Administration is to make various enquiries to confirm the deceased did in fact die without a will. Once those searches have been undertaken then enquiries need to be made as to the extent of the deceased’s assets and the estate as well as advertise the administrator’s intention to apply for Letters of Administration. An administrator cannot apply for Letters of Administration until 14 days after the administrator advertises their intention to apply for Letters of Administration.

Once 14 days has lapsed, the extent of the estate is determined, and the application documents are prepared, the application may then be filed with the court.

The Supreme Court of New South Wales usually takes between 3 and 6 weeks to review the administrator’s application and issue the grant. If the court raises requisitions (request for further documents) then the process will be slightly longer.

IS AN ADMINISTRATOR ENTITLED TO A REWARD FOR ACTING AS AN ADMINISTRATOR OF A DECEASED ESTATE?

An administrator may ask for an amount to be paid to them out of the estate, otherwise known as commission, for their pains and troubles in acting as administrator.

The amount an administrator is entitled to request be paid is based on the extent of the assets and what is required of them to administer the estate. The beneficiaries must either agree on the amount requested or, if agreement cannot be reached, then the administrator must apply to the court for commission.

WHAT OPTIONS ARE THERE IF MORE THAN ONE PERSON WHO HAS EQUAL STANDING TO APPLY FOR LETTERS OF ADMINISTRATION?

In the case where say the only persons entitled to obtain Letters of Administration are the deceased’s children, then they may all make a joint application, or they may nominate one of the children to make the application.

If the application is made by one person, then consent must be obtained by the other persons with the same standing to apply or notice of their application must be provided.

If agreement cannot be reached and there is a stalemate as to who will apply for Letters of Administration, notice may simply be provided on the other entitled person with leave reserve for them to join in at another time.