I normally update readers every few years on the latest administration requirements in Australia as I regularly notice a number of cases where Probate or a Reseal was obtained when not required.
Dealing with assets in Australia is complex, there is no set statutory limit for Probate, rather it is up to the company, bank, titles offices or other institutions as to their individual requirements. This is further complicated by the fact that each State has differing requirements for their own respective government institutions…..
The following is a basic synopsis of the requirements. I must stress that these are the normal requirements and are subject to constant change at the whim of the entities involved. Unless specifically stated reference to Probate, refers also to a Reseal of a Foreign Grant.
Generally shares can be dealt with without Probate in Australia when the value of a particular holding is under AU$15,000 (with the exception of Computershare whose limit is AU$25,000).
However, this limit only applies if there is an overseas Grant. Some companies will accept a Transfer Indemnity Bond for the value of the holding plus a loading to the company of 33% in lieu of a Grant up to a maximum AU$100,000. The premium on a Bond is a percentage of the value required and becomes uneconomical compared to Probate when the value of each shareholding exceeds AU$30,000.
ANZ have a Probate limit of AU$80,000 which reduces to AU$50,000 for Intestacies. Westpac have a limit of AU$75,000. CBA & NAB have limit of AU$50,000. The banks can negotiate on this but it depends on the actual bank involved. Some requirements will be different at the same bank in different States. Some banks insist on Probate being obtained in the State in which the account is held and others insist on Probate but are not concerned with where it is obtained in Australia!
Real Property (including Time-Shares)
Most dealings with real property, except where held as joint tenants, require Probate to be obtained in the same State as the property is held. In Queensland it is possible to deal with property with the production of a foreign Exemplification (or even the original Death Certificate and Will, although you will not get the original Will back). Please be careful getting property dealt with in Queensland – you can spend money unnecessarily!!! In New South Wales Time-Share interests can be dealt with without a Reseal, provided the value thereof is not “excessive”.
There are no steadfast rules with any of the Fund Managers in Australia. However, a good guide to use is the same as for shareholdings. For transfers of unlisted units, Stamp duty is still assessable in some States.
Superannuation in Australia is compulsory for most workers, and with these schemes most employees also have a death benefit insurance cover. Superannuation is mostly covered by federal legislation and is intended to provide retirement benefits to the contributor or their dependents in the cases where they die before retiring.
Therefore it is essential to ascertain from the Super Fund who they intend to pay the benefit to. Super Funds will always avoid paying the funds to the estate if they can!! If there are no dependants then an Australian Grant is required. It generally does not matter in which State the Grant is obtained. If paid to the estate there are various taxation complications that arise, including the possible withholding of up to 30% from the payout to non-financial dependents.
Where to obtain a Grant?
Real Property is the only asset that requires Probate to be obtained in the same State as where the property is located. Some banks will insist on the Probate being obtained in the State in which the account is held. When dealing with shares or managed funds a Grant can be obtained in any State, provided a separate declaration is lodged with the company signed by the executor confirming Probate is not being obtained elsewhere. This declaration complies with a section of the Commonwealth Corporations Act, however, interestingly it does not provide any indemnity or protection for the company or institution concerned!
To further confuse this issue, all Australian States have different Probate procedures. Each State has a different fee structure, often scaled to the asset value. Further, some require details of all worldwide assets and liabilities, details of all beneficiary names, addresses and birth dates. These rules are often based upon outdated legislation which has been superseded, but typical of the departments involved, their internal rules have not kept up with the legislative amendments. A good example is the asset detail requirement which was useful when death duty was existent but would be generally irrelevant to the registrars now.
Please also note that assets held in South Australia should always be avoided. That state is very complex and costly to obtain a Grant. If you know of clients with assets there please review them before it is too late.
Unclaimed / lost money
Many people receive offers of assistance to claim funds that have been found and may belong to them. These funds are discovered by certain money finding organisations that scour the Government Gazettes and then hope to hit the big time with fees of up to 25% of the funds claimed. Basically unpaid company dividends (except for bank dividends) are paid over to the State Governments. Company takeovers proceeds, bank deposits and bank dividends are paid to the Federal Government. When paid the amounts are advertised and become public knowledge. If you or a client get a letter like this you can search the governments online facilities (contact me for the websites or Google them). Once found you can lodge the claims directly. If too hard you can go through my office at only 5% with a minimum of $500.00. Do your research first as there may be more $$$ than you think!
Anti-Money Laundering / Counter-Terrorism Legislation
In recent years Australian Governments have implemented complex AML rules which have mostly been adopted by all institutions here. In nearly all dealings with Australian Institutions verification of individuals Identification is required. In general terms this is not too onerous, however many Legal Executives would have come across requests to prove the identity for transferors on Australian shareholdings and to pay a fee for the privilege of being identified! According to the registries this is more about fraud prevention than AML requirements.
It is interesting to note that when lodging a number of share transfers at the one time with the same person being identified then only one fee is payable, however if lodging transfers over consecutive weeks or months for the same person a separate fee is payable each time!!
What should you do when assets are discovered in Australia?
Naturally I suggest you contact me for assistance. However, my first advice is to ensure you have all details of all assets held. Secondly, don’t take it as read that you have to do what the company or issuer has advised you to do. If you think the value of the asset is borderline, make a special request to the company to waive their Probate requirements in that instance. Finally, contact me for assistance!