Before finalising the estate, take steps necessary to protect yourself from claims and take advantage of protections offered by the law of Western Australia.
Advertise for creditors
It is a requirement of the Trustees Act 1962 (WA) that you advertise for creditors of the estate in the local newspaper and the Western Australian government gazette. The advertisement must be in the form specified by the Act and allow creditors at least one month to come forward. The advantage of doing so is that you are not liable to any person who has not notified you of their claim at the end of the notice period.
Pass the estate accounts
Under the Non-Contentious Probate Rules 1967 (WA) you are required to file the estate’s accounts and plan of distribution at the Supreme Court of Western Australia within 12 months of the date of the grant. The advantage of doing so is that, once passed, you gain the protection offered by section 43(2) of the Administration Act, namely that you are released from further responsibility in relation to the accounts after the expiration of three years.
Challenges to the Will
Certain family members who have been left without adequate provision from an estate may be able to challenge a Will or the laws of intestacy. Generally, any challenge must be made within six months from the date of the grant, although the court has a discretion to extend this deadline. If you are notified of a challenge or suspect a potential dispute it is advisable to delay distributing the assets of the estate – at least before expiration of the six-month period. You should seek legal advice promptly.
Income tax returns
You may need to complete and lodge income tax returns for the deceased up to the date of death and for any financial years prior to death that tax returns are outstanding. If the estate earns, or is likely to earn, income above the tax-free threshold, you should apply for a tax file number for the estate from the Australian Taxation Office and prepare and lodge estate income tax returns for each financial year in which the estate is open. If you finalise the estate without attending to payment of tax, you may be personally liable.
Superannuation and life insurance
As a general rule, if superannuation or life insurance monies are paid into the estate, these funds should not be used to pay the estate’s creditors. You should seek legal advice in these circumstances.