WHAT HAPPENS WHEN SOMEONE DIES? Malcolm Campbell - Managing Partner B.Ec (Com Law), Dip Law (LEC), GIA (Cert) Luke Mitchell - Partner BCom, LLB

Transcription

1 WHAT HAPPENS WHEN SOMEONE DIES? Malcolm Campbell - Managing Partner B.Ec (Com Law), Dip Law (LEC), GIA (Cert) Luke Mitchell - Partner BCom, LLB

2 TABLE OF CONTENTS The following topics shall be dealt with on the following pages as indicated: p. 1 p. 2 p. 3 p. 4 p. 5 p. 6 p. 7 p. 8 p. 9 p. 10 p. 11 p. 12 p. 15 p. 16 p. 17 P. 18 Introduction Death What Does a Funeral Director Do? Arranging & Paying for the Funeral Organ Donation Donating the Body for Research Disposal of your Body Burial on a Private Property Power of Attorney & Authority to Operate Bank Accounts Executor s Role Joint Assets Who Can Read my Will? People & Organisations the Executor may need to contact Probate/Letters of Administration Administration of an Estate Payment of Debts Distributing the Assets Superannuation Disputes about a Will How Can a Solicitor Help Me? Who we are

3 p.1 INTRODUCTION This ebook has been prepared to provide some basic guidance and assistance for you, your family and your executors in preparation for and in the event that someone passes away. This publication is not comprehensive advice nor is it tailored to your indivivual circumstances. Should you have any queries about specific matters relating to your situation please contact us to discuss the matter. CONTACT US FOR COMPREHENSIVE ADVICE TAILORED TO YOUR CIRCUMSTANCES

4 p.2 DEATH When a person dies, a doctor must be called to issue a Medical Certificate as to Cause of Death. Once the Medical Certificate has been issued, either a doctor (or more often a Funeral Director,) will send it to the Registrar of Births, Deaths & Marriages who will then issue a formal Death Certificate to the next of kin. The Death Certificate is accepted as proof of death. The next of kin should provide personal details of the deceased to facilitate registration of death. In some situations, a doctor cannot issue a Medical Certificate. A doctor cannot sign a Medical Cause of Death Certificate if the deceased has: died a violent or unnatural death; died a sudden death and the cause is unknown; died under suspicious or unusual circumstances; dies not having seen a medical practitioner within 3 months of death, or when a medical practitioner attended after death but did not give a medical certificate at the time as to the cause of death; died while under anaesthetic, or within 24 hours of an anaesthetic being administered in the course of surgical, medical or dental treatment, or an operation or procedure of a similar nature; died in an admission centre, mental hospital, prison or detention centre or in any lock up or otherwise whilst in the lawful custody of any member of the Police Force. If any of the above apply, then the doctor or hospital must notify Police and the matter is referred to the Coroner. If the Coroner believes a post mortem is necessary, then disposal of the body cannot take place until after the post mortem has been completed. If a cremation is required, then it will be necessary to complete an Application for Permission for Cremation. The Coroner will issue information to the Registrar of Births Deaths & Marriages to enable the issue of the Death Certificate. If the doctor issues a Medical Certificate, either the family of the deceased or the doctor should contact a Funeral Director to remove the person to a funeral home, or prepare the body and return it home, if the family wishes, until the funeral. Some families will want to dress the body themselves and have the deceased at home for viewing until the funeral. This is usually possible, provided that a Funeral Director is involved and certain health regulations are met.

5 p.3 WHAT DOES A FUNERAL DIRECTOR DO? Funeral Directors are usually responsible for: collecting the documents required for burial; removing the body; supplying the coffin or casket; preparing the body; providing a hearse; arranging a service at a crematorium, grave site, church or whatever is required; and making arrangements with the cemetary or crematorium for the burial or cremation. A Funeral Director may also: arrange a pre-burial service; provide a funeral parlour or chapel for viewing the deceased person; arrange cars for the mourners; and order flowers and place advertisements. Many Funeral Directors will accommodate people who wish to do things differently; for example, dress the deceased themselves and have home viewings. FUNERAL DIRECTORS WILL ACCOMMODATE PEOPLE WHO WISH TO DO THINGS DIFFERENTLY.

6 p.4 ARRANGING & PAYING FOR THE FUNERAL About 90% of people in NSW die in a hospital or institution. A Medical Certificate of Cause of Death is issued and the deceased is kept at the institution s morgue until their executor or next of kin make arrangements for a funeral or contact a Funeral Director. If a person dies at a nursing home or an institution that has no morgue, then the executor or next of kin arranges to take the body either to the family home until the time of the funeral or to a funeral home. When someone dies at home, a doctor should be called to pronounce the person dead and to issue a Medical Certificate as to cause of death. Either the executor, next of kin or the doctor should contact a Funeral Director and arrange for the body to be taken to a funeral home or, if desired, to prepare the body to be kept at home until the time of the funeral. As a general rule, whoever organises the funeral must pay the Funeral Director. They do have the right to receive priority of payment from the Estate but only for the reasonable costs incurred. If extravagant costs are incurred then the person who arranges the funeral will pay those extra costs themselves and not be entitled to recover them from the Estate, unless the beneficiaries consent. Most banks will release from the deceased s bank account sufficient funds to pay the funeral or cremation costs. People wanting a headstone or monument erected should contact a Monumental Mason to have one made and arrange the size, shape and details. Before making arrangements it is important to contact the cemetery to see if there are any restrictions on the dimensions of the headstone. WHOEVER ORGANISES THE FUNERAL MUST PAY THE FUNERAL DIRECTOR.

7 p.5 ORGAN DONATION Only 1-2% of people die in hospital in the specific circumstances where organ donation is possible. Currently only an average of 60% of families consent to organ donation of a loved one across Australia. The organ donation rate could be dramatically improved if more people discussed their wishes with their family and registered their decision on the Australian Organ Donor Registry. This is the only National register of organ and/or tissue donation. Most organs are donated by people who die while on a ventilator in an intensive care unit, generally as a result of a major accident, a brain haemorrhage or stroke. Today, very few people die in these circumstances and the number is falling because of welcomed improvements in road safety and advances in medical treatment. Tissue donation may occur when someone has died without being in hospital, as tissues can be donated up to 24 hours after death. Many more people are suitable for tissue donation than organ donation. The Australian Organ Donor Register will be accessed by a suitable qualified member of medical staff and information will be provided to the family. Consent (or objection) to donating organs and/ or tissue for transplantation can be verified 24 hours a day, 7 days a week, anywhere in Australia. It is important that you talk with your family before registering your decision. You may contact the register by telephone and via their website 1-2% OF DEATHS OCCUR IN SUCH A WAY THAT ORGAN DONATION IS POSSIBLE.

8 p.6 DONATING THE BODY FOR RESEARCH In NSW a body donation program is usually organised through a University or medical research facility. The person needs to make a formal agreement with a University or medical research facility for the future donation of their body. These organisations can provide full details and a copy of the donation form. Bodies are only accepted if they are required at the time of death and if certain conditions are met. People making these arrangements should inform their family, nursing home or hospital about the agreement. Relatives usually hold a memorial service shortly after the death, and the University arranges a burial or cremation later (as agreed with the donor). Relatives can be advised of these arrangements if they wish. THIS IS USUALLY ORGANISED THROUGH A UNIVERSITY OR MEDICAL RESEARCH FACILITY

9 p.7 DISPOSAL OF THE BODY Arrangements as to the funeral and the disposal of the body is the responsibility of an executor. If the deceased has not made a will the resonsibility then falls to the deceased s next of kin. It is important to have chosen an Executor who will respect and follow the deceased s wishes concerning the disposal of the body following death. Apart from a direction against cremation, any directions in a Will are not binding. Furthermore, Wills are often not located until after the funeral or cremation. Accordingly, any special wishes concerning the disposal of the body following death, should be discussed with the Executor in order to ensure that these wishes are understood. People who wish to follow particular cultural and/or religious practices should choose a Funeral Director who can provide a funeral according to their specific needs, including, if necessary, shipment of the body overseas. Funeral Directors can arrange to ship bodies to other cities or countries. Each country has its own Consular and health regulations for receiving bodies which must be followed. It is very expensive to prepare a body and to transport it (by air freight) overseas. Cremating the body and sending the ashes is a cheaper option. Embalming involves the removal of bodily fluids and their replacement with formalin. This preserves the body for a long time and reduces bacterial action. This is very important if the body is to be viewed or transported to another place for burial. Bodies leaving or coming into Australia and bodies being entombed into an above ground vault or mausoleum must be embalmed.

10 p.8 BURIAL ON A PRIVATE PROPERTY New South Wales Health Document No. GL issued on 7 June 2006 contains guidelines to assist local authorities in approving burial locations on private land. The document lists 13 conditions that must be considered by authorities including: the land area must be more than 5 hectares, and fenced, to delineate the boundaries and secure the location; the local authority must give its consent; the burial must not be likely to contaminate drinking water or a domestic water supply, and there must be a minimum soil coverage of 900mm; the owner must provide access to the site. Records of the burial are kept by the local authority. THE BURIAL MUST NOT LIKELY TO CONTAMINATE DRINKING WATER OR A DOMESTIC WATER SUPPLY,AND THERE MUST BE A MINIMUM SOIL COVERAGE OF 900MM

11 p.9 POWER OF ATTORNEY & AUTHORITY TO OPERATE BANK ACCOUNTS Upon death, any Power of Attorney or an authority to operate the person s bank account cease to have effect. The Attorney or bank signatory must not continue to operate those accounts or carry out business on the deceased s behalf following your death. It is the Executor s role to attend to the deceased s affairs following death. EXECUTOR S ROLE In general terms, an Executor s duty is to take care of the deceased s assets and property, see that debts and taxes are paid and finally, to distribute the assets to the beneficiaries of the Will. The Executor will have to begin by finding out and making a list of everything the deceased owned or was entitled to. The list could include a home, car, money in bank or building society accounts, furniture, household appliances, jewellery, shares and other investments, insurance policies, superannuation and holiday pay from work. The Executor should take immediate steps to secure and protect the assets from damage, loss or wastage. In addition, if the Estate is to be divided between a number of beneficiaries, the assets may have to be valued. Next, the Executor will have to apply to the Supreme Court for a Grant of Probate. Probate is a certificate issued by the Court saying that the Will is valid and that the Executor has the right to administer the Estate in accordance with that Will. When applying for Probate, the Executor will need to complete a number of legal documents. The Executor will also have to produce documentary evidence of death, property, attestation of the Will and details of assets and liabilities of the deceased, among other things. It is common to engage a solicitor to assist in this process. JOINT ASSETS Joint assets pass by operation of law to the surviving joint tenant and do not form part of the Estate dealt with by a Will.

12 p.10 WHO CAN READ THE WILL? First of all, it is vital that the original of the last Will is located. It is extremely important that the Executor knows where the original Will is as they are entitled to possession of it after the death (so that they can administer the Estate). On 1 March 2008, Section 54 of the Succession Act, 2006 came into effect. This section regulates who is entitled to inspect the Will of a deceased person and states: (1) In this section: Will includes a revoked will, a document purporting to be a will, a part of a will and a copy of a will. (2) A person who has possession or control of a will of a deceased person must allow any one or more of the following persons to inspect or be given copies of the will (at their own expense) (a) any person named or referred to in the will, whether as a beneficiary or not, (b) any person named or referred to in an earlier will as a beneficiary of the deceased person, (c) the surviving spouse, de facto partner (whether of the same or the opposite sex) or issue of the deceased person, (d) a parent or guardian of the deceased person, (e) any person who would be entitled to a share of the estate of the deceased person if the person had died intestate, (f) any parent or guardian of a minor referred to in the will or who would be entitled to a share of the estate of the testator if the testator has died intestate, (g) any person (including a creditor) who has or may have a claim at all or in equity against the estate of the deceased person, (h) any person committed with the management of the deceased person s estate under the Protected Estates Act 1983 immediately before the death of the deceased person, (i) any attorney under an enduring power of attorney made by the deceased person, (j) any person belonging to a class of persons prescribed by the regulations. (3) A person who has possession or control of a will of a deceased person must produce it in a court if the court requires the person to do so. Once Probate or Letters of Administration have been granted, a copy can be obtained by anyone from the Supreme Court of NSW.

13 p.11 PEOPLE & ORGANISATIONS THE EXECUTOR MAY NEED TO CONTACT There are many people and/or organisations that the Executor may need to contact to advise of the deceased s death, including: Doctor Preferred Funeral Director Family and friends Executor of Will Minister of religion Funeral bond Prepaid funeral Centrelink Department of Veterans Affairs Foreign pension authority Employers Superannuation funds Clubs (e.g. the RSL) Banks, credit unions, etc Public Trustee Credit card/hire purchase Insurance companies Hospital Social worker Hearing centre Health professionals (physiotherapist, dentist, podiatrist, optometrist, etc) Health benefits fund Medicare Landlord Local electricity authority Gas supply company Local council (rates, Meals of Wheels) Telephone company Vehicle registration and licensing authorities Electoral office Accountant Australian Taxation Office Professional bodies (e.g. solicitor) Public services (e.g. library) Post office

14 p.12 PROBATE/LETTERS OF ADMINISTRATION Once the assets and liabilities of the estate have been identified, the Executor normally applies for a Grant of Probate from the Supreme Court of NSW. The Grant of Probate confirms that the Will is valid and it authorises the Executor to administer the estate to the beneficiaries named in the Will in accordance with the terms of the Will. To apply for a Grant of Probate, the Executor must first publish a notice of their intention to apply and then lodge a number of documents (including the death certificate) with the Supreme Court of NSW. If your Executor retains us to act on the application for a Grant of Probate, we will arrange for the publishing of this notice on behalf of the estate in due course. Sometimes in smaller estates it is not necessary to obtain a Grant of Probate. Whether Probate will be required will be asset dependent. It is important to note that where assets are held as joint tenants, those assets pass by law to the surviving owner without the need for Probate and regardless of the provisions of the Will. What is Probate? Probate is the grant of official approval from the Court that certain formal requirements have been met in relation to a Will. Therefore, while the Will is the actual document containing the last wishes of a deceased person, Probate is the legal authority granted by a court allowing those wishes to be carried out. A number of formalities must be satisfied before Probate will be granted: the relevant Will must be the last valid Will of the deceased; and the person named as the deceased must be in fact deceased. Probate can be revoked if the Will is proven to not be the last valid Will made by the deceased or if any other defects are found. Even if all seems straightforward, the best course for any Executor is to seek legal advice to ensure that all legal bases are covered before proceeding. Generally, a Registrar performs the process of issuing a Grant of Probate (rather than a Judge) and the Executor will not have to appear in court unless there is a dispute about, or irregularity with the Will. If there is a dispute, the process becomes far more complicated.

15 p.13 Generally, a Registrar performs the process of issuing a Grant of Probate (rather than a Judge) and the Executor will not have to appear in court unless there is a dispute about, or irregularity with the Will. If there is a dispute, the process becomes far more complicated. How will Probate be granted if there is a dispute about the Will? The answer depends upon when the dispute arises. A dispute can arise before or after the granting of Probate. What if there is a dispute before probate is granted? If concerns exist about a Will before the granting of Probate, a Caveat can be lodged with the Supreme Court which prevents Probate being granted until certain conditions are satisfied. There are three types of Caveats: 1. Caveats seeking proof of the Will in solemn form are used where there are concerns about forgery or doubts about whether the Will was properly signed and executed General caveats are used where doubts arise about the Will in relation to: the testator s capacity to make the Will; the identity of the intended beneficiary; the testator s understanding of the content of the Will or its effect; whether the deceased acted under duress or undue influence in making the Will; and questions of forgery. Caveats forbidding grants are used in respect of informal testamentary documents. The Court has the power to treat informal documents as Wills even if they don t meet all the strict criteria. This type of caveat prevents a court from making such a grant without first hearing from the caveator regarding whether the informal documents should be granted validity. If a Caveat is lodged, it is not guaranteed that Probate will not be granted. It simply means that the court will be required to examine the circumstances surrounding the Will more thoroughly than normal, and if satisfied, will then issue the Grant of Probate.

16 p.14 What if there is a dispute after Probate is granted? If concerns arise after Probate is granted, the grant can be challenged. This is what is generally referred to as challenging a Will. There are two main avenues here: Family Provision: The Court may order that provision out of the estate be made for a person s maintenance, education or advancement in life, but only if it is satisfied that the person making the application is an eligible person and that further provision should be made for that person; or Revocation: an application can be made to the Probate Division of the Supreme Court to revoke the Grant of Probate. However, this is extremely complicated and rarely granted by the court. Numerous requirements must be fulfilled to successfully challenge a Grant of Probate. The Property (Relationships) Act 1984 (NSW), the Probate and Administration Act 1898 (NSW), the Succession Act 2006 (NSW) and the Supreme Court Rules 1970 (NSW) all contain different parts of the legal landscape in this jurisdiction. The Court s discretion to grant an application in these circumstances is not unrestricted. Although the granting of probate follows a formal process, this process is not something that should be entered into lightly. A prudent Executor should seek legal advice and assistance with matters of probate. IF CONCERNS ARISE AFTRE PROBATE IS GRANTED, THE GRANT CAN BE CHALLENGED.

17 p.15 ADMINISTRATION OF AN ESTATE Once a Grant of Probate has been obtained, the Executor has the power to deal with the estate assets in accordance with the provisions of the Will. The Executor will firstly arrange the transfer of any specific gifts to the beneficiaries, transfer assets and where necessary, sell assets. Any outstanding debts of the deceased should then be paid. The Executor should also arrange for the preparation of any taxation returns. The Executor must publish a notice of their intention to distribute the estate a month before distribution. The publication of this notice helps protect the Executor from being personally liable for any claims of which they were unaware. Once the publication period has expired and in the absence of any contest over the estate, the Executor may proceed to make a final distribution to the beneficiaries. PAYMENT OF DEBTS The solicitor for the Estate (or the Executor if there is no solicitor) should be notified of any debts to enable arrangements to be made to hold all debts until funds become available in the Estate. This is usually following a Grant of Probate. Should the Executor or next of kin pay the debts of the deceased personally, they will be entitled to be reimbursed from the Estate. The Probate & Administration Act, 1898 prescribes the order of priority for payment of your debts depending on whether the Estate is solvent or insolvent. Funeral and testamentary expenses shall have priority. Testamentary expenses will include the costs and expenses of obtaining Probate, administering the Estate, funeral expenses, the costs of getting in assets of the Estate, commission payable to the Executor for administering the Estate and the costs of obtaining legal advice in relation to the administration of the Estate. If there are insufficient assets to pay all debts, the Estate will be known as an insolvent estate. Legal advice will be required to ensure that debts are paid from any assets in the Estate according to their legal priority.

18 p.16 DISTRIBUTING THE ASSETS When all assets have been identified, secured and if necessary, sold and all debts have been paid, the remainder of the Estate can be distributed to the beneficiaries. The Executor must prepare a report and statement for the beneficiaries given to them when they receive their share of the Estate showing what the assets were, how much money they raised and what expenses and debts were paid from the proceeds. Finally, the Estate is wound up. This involves drawing up accounts showing money paid into the Estate and money paid out which are sometimes required to be lodged with the Supreme Court. SUPERANNUATION The Trustee of a superannuation fund determines who will receive all superannuation unless there is a valid Binding Death Benefit Nomination in existence. Superannuation usually does not form part of the Estate dealt with by a Will unless the Trustee of the Superannuation Fund to which you are a member decides to pay it to the Estate or a valid Binding Death Benefit Nomination directs these assets to the Estate. THE EXECUTOR MUST PREPARE A REPORT AND STATEMENT FOR THE BENEFICIARIES - GIVEN TO THEM WHEN THEY RECEIVE THEIR SHARE OF THE ESTATE

19 p.17 DISPUTES ABOUT A WILL One way to challenge a Will is through the Family Provision provisions in the Succession Act 2006 (NSW). The first step in making a Family Provision claim is for the applicant to establish that they fall within a class of eligible persons. The following persons are defined as eligible persons under the Act: a spouse; a de facto spouse; a former spouse; a child; a grandchild or member of the household who was at any particular time wholly or partly dependant upon the deceased person. What must be proved to enable a person to succeed in an application? that the Applicant is an eligible person; that the Applicant has been left without adequate provision for his or her proper maintenance, education and advancement; and that proper provision should be made for that person. The Court must also look at the totality of provision made by the deceased during their lifetime as well as what is left by the Will. In deciding whether it is proper to grant an order, the Court must consider factors such as the competing interests of others, including but not limited to, creditors. HOW CAN A SOLICITOR HELP ME? 1. Inform you in detail about the rights and responsibilities of an Executor. 2. Help you to obtain and complete the legal documents needed to apply for Probate. 3. Obtain the Grant of Probate or Letters of Admin where there is no Will; 4. Assist you to identify and collect the deceased s assets. 5. Advise you about the legal order in which debts must be paid and the remaining assets distributed. 6. Explain the legal order of distribution of the Estate in a case where there is no Will. 7. Help you draw up the report and statement on the assets for the beneficiaries. 8. Deal with any claims on the estate.

20 p.18 WHO WE ARE Dooley & Associates is a general legal practice who are committed to providing excellence in legal services. Our quality systems and focus on continuous improvement enable us to deliver practical, commercial and professional advice and assistance to businesses and individuals. Our focus is on you, which enables us to provide excellent service by: Understanding that your legal matter is the most important thing happening to you at that time Explaining the legal system clearly Responding quickly to your queries Finding out what you seek to achieve Keeping you informed of progress Achieving the best result for you Principals Malcolm Campbell - Managing Partner Malcolm is the Managing Partner of Dooley & Associates Solicitors, having first joined the firm at the start of His specialties include workplace law, business & commercial law and estate planning. Malcolm takes a very hands on approach with his clients, ensuring that they receive practical, commercial and real world guidance and solutions. Luke Mitchell Partner Luke heads up our Litigation and Employment Law teams and primarily practices in the areas of Commercial Litigation, Business Advisory and Employment Law. Luke aims to provide timely and commercially focused advice with a view to resolving disputes as quickly and as cost effectively as possible.