Probate and Letters of Administration

Estate Administration

Estate administration is the legal process of winding up a deceased person's affairs, paying outstanding liabilities, filing final tax returns, and distributing assets to beneficiaries. We guide executors through High Court filings and probate requirements.

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Executor Personal Liability

Under the Family Protection Act 1955, family members can challenge a Will. If an executor distributes assets within **6 months** of the grant of Probate, they are personally liable.

The 6-Month Hold: To protect themselves from personal financial liability, executors must hold estate funds in a trust account for a minimum of 6 months before final distribution to beneficiaries.

1. Valuing & Freezing Assets

The executor must contact banks, insurance firms, and share registries to value the deceased's assets at the date of death. Accounts are frozen by institutions if they hold more than **$15,000** in a single bank until Probate is granted.

Asset Custody

2. Settling Creditor Liabilities

All outstanding debts (mortgages, credit cards, personal loans, and funeral costs) must be paid out of the estate funds. The executor must advertise for creditors in newspapers to ensure all liabilities are identified.

Debt Settlement

3. Filing IRD Tax Returns

The executor must file a final individual income tax return (IR3) for the deceased up to the date of death. If the estate earns income during the administration period, a separate estate tax return (IR6) must be filed.

Inland Revenue Compliance

Grant of Probate vs. Letters of Administration

Legal Feature	Grant of Probate	Letters of Administration
Statutory Ground	Deceased left a valid Last Will and Testament.	Deceased died intestate (no valid Will left).
Who Applies?	The named Executor(s) specified in the Will.	The closest living relative (next of kin) acts as Administrator.
Asset Distribution Rules	Strictly according to the instructions in the Will.	Strictly according to Section 77 Administration Act 1969.
High Court Registry Fee	Standard filing fee of $200.00.	Standard filing fee of $200.00.
Legal Complexity & Speed	Slightly faster; court accepts the Will's named executors.	Slower; requires clearing off other relatives' rights to apply.

Statutory Priority of Estate Cash Flow Outgoings

Executors must distribute estate funds strictly in order of legal priority. Paying beneficiaries before settling debts or funeral expenses represents a breach of trust:

Priority	Outgoing Category	Legal Description
1st	Funeral & Disposal Expenses	Reasonable burial, cremation, and headstone costs.
2nd	Estate Administration & Legal Fees	Court filing fees, valuation costs, and solicitor expenses.
3rd	Inland Revenue (IRD) Taxes	Deceased's final IR3 tax and estate IR6 tax outgoings.
4th	Secured & Unsecured Creditors	Remaining residue split among named beneficiaries.
5th	Beneficiary Distribution	Expires every 3 to 5 years (requires compulsory court review & re-filing)

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Ensure your executor duties are carried out correctly, assets are liquidated securely, and IRD filings are fully compliant. Request a quote online today.

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Estate Administration Q&A

Assets held in joint names (such as a joint bank account or a home owned as joint tenants) do not require Probate. These assets automatically pass to the surviving co-owner under the principle of survivorship, which is registered simply by presenting the death certificate. Additionally, single bank accounts holding under $15,000 can be released directly to the next of kin at the bank's discretion, without Probate.

Applying to the High Court and receiving the grant of Probate typically takes 4 to 8 weeks. However, the complete estate administration process usually takes 9 to 12 months. This timeline is due to the statutory 6-month challenge window from the date of the Probate grant during which executors should hold assets to avoid personal liability, alongside IRD tax clearance timelines.

If the liabilities exceed the assets, the estate is insolvent. In this scenario, the assets are sold and creditors are paid in order of statutory priority. Crucially, family members and the executors are not personally liable for the deceased's debts, unless they co-signed a loan or acted as a personal guarantor during the deceased's lifetime. The unpaid debt is written off once the estate assets are exhausted.

Generally, lay executors (family members) cannot charge the estate for their time, though they are entitled to recover all out-of-pocket expenses (such as travel, postage, and legal disbursements). However, under the Administration Act 1969, executors can apply to the High Court for an "executor's commission" (up to a maximum of 5% of the estate value) if the administration was exceptionally complex or time-consuming. Professional executors, such as trustee companies or solicitors, charge hourly rates as specified in the Will covenants.

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