Small estates

In order to prevent the dilution of assets in a small estate via probate-related fees, legislation has been Introduced to streamline probate In such cases, ensuring that the bulk of the estate goes to the beneficiaries.

Legislation

Many people die leaving only small estates (as that expression is defined in s 71 A&P Act) and in such cases the A&P Act makes special provisions for the procedures mentioned above to be simplified. These provisions apply both to testate and intestate estates (s 71 A&P Act).

A special section of the Probate Office deals with small estates as defined by the A&P Act. SeeProbate”, for address and contact details.

What is a small estate?

A small estate is one in which the gross value (i.e. before any debts are deducted) of solely owned assets does not exceed $100,000 (plus an indexation factor set out in section 71(1B) of the A&P Act; since 1 July 2015, the indexation rate has been reviewed on 1 July each year; see s 71(1A) A&P Act)) where the beneficiaries are the husband or wife or children or the widowed mother of the deceased; or in which the gross value of solely owned assets does not exceed $100,000 and the beneficiaries are other than the surviving spouse, children or widowed mother of the deceased (s 71 A&P Act).

Apart from the solely owned assets described above, the deceased may have had unlimited jointly owned assets (e.g. a house or bank account), and the estate will still fall into the category of a small estate.

Where the executor or administrator of a small estate lives in the Melbourne metropolitan area, the staff of the Small Estates Office will arrange for a grant of representation.

Where the executor or administrator lives more than 32 km from the Melbourne GPO, the clerk of the nearest Magistrates’ Court will prepare the necessary documents. There is a fee of $461 to file an application through the Small Estates Office with the assistance of a small estates officer.

Wages, money, or assets of or due to the deceased may be paid directly to the deceased’s executors, immediate family, or person entitled to the estate without probate, provided that the amount due to the deceased does not exceed $25,000 as indexed each 1 July under section 31B of the A&P Act (see s 31A–31D A&P Act).

Example

The husband or wife dies and the sole beneficiary is the surviving spouse.

The assets are a jointly owned matrimonial house valued at $250,000, a joint bank account with a credit balance of $8,000 and a bank account in the deceased’s name only with a credit balance of $40,000.

A grant of probate will only be required to release the solely owned funds (i.e. the $40,000 bank account in the deceased spouse’s sole name).

The Small Estates Branch will hand the grant of probate to the executor, who will then have to complete the administration of the estate by themself.

Cost

A small general service fee is charged, and the usual filing fees on application must be paid. (For more information on the Small Estates Office, seeSmall estates and the Probate Office” in How legal aid can help.)