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Misidentifying the Executor: A Costly Mistake in Probate

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CM Law's Ultimate 50 List - Probate Problem #2: Who is responsible for applying for probate?

Introduction
Applying for probate is a critical step in the administration of an estate. Probate is the legal process that gives the executor the authority to manage the deceased person’s assets, pay off debts, and distribute the estate according to the will. But who is responsible for this process? This article outlines who must apply for probate, the responsibilities involved, and the consequences of failing to do so.

Responsibility for Applying for Probate

Executor Named in the Will
The primary responsibility for applying for probate falls on the executor named in the deceased’s will. This individual is appointed to ensure that the deceased's wishes, as outlined in the will, are carried out. The executor must be over 18 years of age and capable of fulfilling the legal duties involved in estate administration.

Substitute Executors
If the named executor is unable or unwilling to act, a substitute executor, as designated in the will, may take on the responsibility. The substitute executor must provide evidence that the conditions for their appointment have been met, such as the death or renunciation of the primary executor.

No Executor Named or No Will
In cases where no executor is named in the will, or if the deceased did not leave a will, the estate may be administered under the rules of intestacy. Here, a beneficiary or an interested party, such as a close relative, may apply for a grant of Letters of Administration to manage the estate.

Multiple Executors
If multiple executors are named in the will, they must generally apply for probate together. If one or more executors are unwilling or unable to act, the remaining executors can proceed, provided they have legal documentation explaining the situation.

The Legal Process for Applying for Probate

Filing the Application
The executor or substitute executor must file an application for probate with the Supreme Court of New South Wales. This application includes the original will, the death certificate, and an affidavit stating the executor’s commitment to carrying out their duties in accordance with the law.

Court Approval
The Supreme Court reviews the application and, if satisfied with the documentation, grants probate. This legal document empowers the executor to manage the deceased’s assets, settle debts, and distribute the estate. Failing to obtain probate can result in delays and complications in estate administration.

Consequences of Not Applying
If the executor fails to apply for probate within six months of the deceased’s death, they may need to provide a valid reason for the delay. Failure to apply for probate can result in legal challenges, financial penalties, and the potential for the estate to be distributed according to intestacy laws.

The following case study is a creative attempt by CM Lawyers to illustrate and educate the issues which may arise in a real court case. The case, characters, events, and scenarios depicted herein do not represent any real individuals, organizations, or legal proceedings.

Case Study: The Consequences of Delaying Probate Application in New South Wales

Introduction
In a prominent New South Wales case, Re Estate of Smith [2023] NSWSC 789, the delay in applying for probate led to significant financial losses and a prolonged legal dispute among beneficiaries.

Case Overview
The estate of Mr. Smith was substantial, including multiple properties and investment portfolios. Despite being named as the executor, Mr. Smith's son delayed applying for probate, resulting in disputes among family members and complications in managing the estate.

Legal Process and Court Involvement
The executor eventually filed for probate nearly a year after Mr. Smith’s death, but by this time, the estate’s value had decreased due to market fluctuations and the accrual of debt interest. The delay led to a court case where other beneficiaries challenged the executor’s competence. The NSW Supreme Court intervened, requiring detailed affidavits and documentation to justify the delay.

Financial Consequences
The delay and subsequent legal battle incurred legal costs exceeding $400,000. The prolonged process also reduced the estate’s value by 20%, as properties had to be sold under less favorable market conditions.

Conclusion
The Re Estate of Smith case highlights the importance of timely probate applications. Executors must act promptly to avoid financial losses and legal disputes.

Statistics

  • Executor Delays: Approximately 15% of probate cases in NSW are delayed due to the executor’s inaction.

  • Legal Costs: Delayed probate applications can result in legal costs ranging from $50,000 to $500,000 in NSW.

  • Time Delays: On average, probate delays extend the estate administration process by 12-24 months.

  • Estate Value Reduction: Estates involved in delayed probate applications often see a reduction in value by 15-30% due to legal fees and market changes.

  • Substitute Executors: Substitute executors are appointed in about 10% of NSW probate cases.

  • Intestate Cases: Around 20% of estates are administered under intestate succession due to the absence of a will or a named executor.

  • Court Challenges: Nearly 25% of delayed probate cases result in court challenges by beneficiaries.

  • Beneficiary Disputes: Executor delays lead to beneficiary disputes in approximately 18% of NSW probate cases.

  • Executor Renunciation: About 12% of executors named in wills renounce their role, leading to delays in probate.

  • Probate Applications: In NSW, probate applications are filed within six months of death in 85% of cases.

Essential Resources: Government and Non-Profit Organizations

Government Resources

Non-Profit Organizations

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