Administering a deceased estate in Western Australia involves specific procedures and timeframes. Below is a guide tailored to WA’s legal requirements and resources.
Managing a Deceased Estate in Western Australia: Key Steps and Considerations
Dealing with the loss of a loved one is challenging, and managing their financial affairs can be complex. This guide outlines the essential steps to take when administering a deceased estate in Western Australia, including legal requirements, tax obligations, and essential timeframes.
- Look after yourself
Losing someone close is emotionally taxing. If you’re feeling overwhelmed, reach out for support. You can talk to family, friends, or contact confidential counselling services:
- Lifeline Australia: 13 11 14 (24 hours)
- Beyond Blue: 1300 224 636 (24 hours)
- MensLine Australia: 1300 789 978 (24 hours)
- Griefline: 1300 845 745 (8 am to 8 pm AEST)
- Thirrili (support for Aboriginal and Torres Strait Islander people): 1800 805 801 (24 hours)
Don’t let taxation and administration overwhelm you. The tax management of a deceased estate, and the time frames attached to the tax management, is (relatively) more relaxed than other situations.
Initially, the funeral home will help you arrange for the death certificate and register the death.
2. Notify Relevant Authorities
Australian Taxation Office (ATO)
Inform the ATO of the death to cease correspondence addressed to the deceased. Typically, the executor or next of kin makes this notification, but others can do so as well. An ATO representative can guide you through subsequent steps.
Department of Transport (DoT)
In Western Australia, it’s essential to address the deceased’s driver’s licence and vehicle registrations. The DoT provides guidance on handling licences, vehicles, and vessels of the deceased.
Australian Securities and Investments Commission (ASIC)
If the deceased was a company director or shareholder, the executor must notify ASIC of the date of death. This is typically done by the registered ASIC agent, (who usually is your Perth tax accountant), through lodging an ASIC Form 484.
Services Australia
If the deceased received benefits from Services Australia, the benefits paid will likely stop or be adjusted for the remaining spouse. So, notifying Services Australia early on ensures overpayments do not occur. The same applies to the Department of Veteran Affairs if relevant.
RevenueWA
If the deceased was a nominated person with RevenueWA for lodging payroll tax returns, notifying RevenueWA of the deceased is important.
If you are dealing with a deceased estate with offshore assets you might have to notify authorities in those countries overseas.
3. Know your dates
Being aware of specific timeframes is crucial:
- Executor’s Year (12 months): Executors have 12 months from death to administer the estate before beneficiaries can demand distribution.
- Family Provision Claims (6 months): Eligible persons can contest the will within six months of the grant of probate or letters of administration. It’s advisable to wait this period.
4. Identify the Estate Administrator
Determine who will manage the deceased’s financial affairs:
- With a Will: The named executor(s) will oversee the estate.
- Without a Will: The next of kin or another suitable person may apply to the Supreme Court of Western Australia to be appointed as the administrator.
Administration typically takes 6 to 12 months but can extend longer in complex situations.
Ensure all tax obligations are settled before distributing the estate’s assets.
5. Seek Professional Assistance
Administering a deceased estate can be intricate. Consider the following resources:
- Public Trustee: Offers professional estate administration services. They can act as executor or administrator, especially when no suitable person is available.
- Legal Aid WA: Provides information on wills and estates, helping you understand the process and your responsibilities.
- Registered Tax Agents: Can offer guidance on tax-related matters and give guidance into the possible death tax liabilities with superannuation fund payments to the deceased.
- Lawyers: Can help you navigate probate.
If the deceased beneficiaries created a testamentary trust in their will, you will need to review the deed and then, if possible, apply to the Australian Tax Office for a tax file number.
6. Apply for Grant of Probate or Letters of Administration
To be recognised as the estate’s legal personal representative (LPR), you may need to obtain:
- Grant of Probate: If there’s a valid will.
- Letters of Administration: If there’s no will or no appointed executor.
In Western Australia, applications can be made no sooner than 14 days after the person’s death. Once lodged, if the application is in order, the Supreme Court usually takes about 4 to 8 weeks to issue the grant.
It is essential that the estate plan has mechanisms to ensure control passes before probate is planned for time-critical events, like that of a business operator. This is where a specialist firm like Westcourt can help.
7. Notify the ATO of Your Role
Inform the ATO that you’re managing the deceased estate’s tax affairs by submitting an official death notification. As the authorised LPR, you’ll have full authority over the deceased’s tax matters.
8. Address Business Obligations
If the deceased operated a business:
- Engage with the staff: Find out who the successor was in the business to understand the ongoing obligations.
- Accounting: The Perth Business Accountant, like Westcourt, is normally the most trusted and closest person to the business operations outside the owner. So, engaging with the business accountant early will reduce your workload later.
- Final Business Activity Statement (BAS): Lodge the final BAS for the last tax period.
- GST and Capital Gains Tax (CGT): These may apply to selling business assets.
Consult legal or tax professionals for detailed guidance.
If the deceased owned a company, you should investigate options to either close the Australian company or pass it onto estate beneficiaries.
9. Lodge the Final Tax Return
Submit a ‘date of death’ tax return, covering the income year up to the date of death. Also, address any outstanding tax returns from previous years. The ATO can assist in retrieving the deceased’s tax records if needed.
Loding a final tax return will also require cancelling tax registrations such as the Australian Business Number, GST, Fringe Benefits Tax, Single Touch Payroll, and others, where relevant.
10. Manage Ongoing Estate Tax Returns
The estate may generate income (e.g., rental income, dividends). In such cases:
- Trust Tax Returns: These may be required annually until the estate is finalised.
- Tax Payments: These must be made from the estate’s assets before distribution.
11. Finalize the Estate
Ensure that all obligations, including debts and taxes, are settled before distributing assets. The LPR is responsible for any outstanding liabilities up to the estate’s value. Distributing assets prematurely can lead to personal liability for the LPR.
Finalising a deceased estate often requires informing the relevant parties, closing accounts, and distributing the assets. The court is not formally notified that the estate has been wound up and completed; it is just completed.
At Westcourt we understand the difficulty of managing a deceased estate, and we have seen first-hand how a properly structured estate plan can help and support a family during a difficult time. Regardless of where you are in your journey-Westcourt can help manage the burden of dealing with a deceased estate. Why not call us today?
