Inheritances and family law

Will the Court give me back what I put in?

An inheritance is not a protected asset in family law property settlements. Depending when an inheritance is received, the family law courts exercise wide discretion about how it is treated.

Will an inheritance be included in the property pool?

The treatment of inheritances can result in bitter disputes between parties in family law property settlements. An ex-partner who received an inheritance may believe they should retain all of it whilst the other ex-partner may argue that it should from part of their shared pool of property to increase their overall entitlement.

The family law court’s treatment of an inheritance can be confusing. One inheritance can be excluded entirely from the property pool whilst another can be treated as a separate pool distinct from the other property. Whatever approach the courts choose to adopt, they will not ignore an inheritance.

An inheritance will only be considered where it has already been received or where evidence shows that party is likely to receive an inheritance in the very near future e.g. if a parent has lost the capacity to change their Will. The mere expectation of a future inheritance will not affect the division of assets of the relationship. The family law courts will not be interested in a possible inheritance an ex-partner might one day receive without evidence that the entitlement is more than purely speculative.

What will the family law courts consider?

A key issue in property settlement negotiations is how an inheritance received during a relationship is to be treated.

How an inheritance is dealt with in a property settlement depends on the circumstances of the particular case. Following are some of the factors taken into account in determining whether the inheritance forms part of the asset pool, or is ‘protected’ from distribution in the settlement.

  • the timing of the inheritance i.e. before cohabitation commenced, during the de facto relationship/marriage, or after separation
  • the intentions of the deceased;
  • how the money was used; and
  • the size of the inheritance compared to the value of the property pool.

The family courts will consider what weight, if any, should be given to the inheritance and assess it along with the parties’ other contributions.

If an inheritance is received shortly before or after the commencement of the relationship, it will be considered an initial contribution by that party and it’s value will included within the asset pool. The value of the inheritance as one of the contributions made by that party will be taken into account when determining that party’s entitlements on separation. The magnitude of the impact of the inheritance on adjustments to a party’s entitlements depends on it’s size and the amount of the party’s other contributions to the asset pool.

If an inheritance is received during the relationship, how it is treated depends on how it was applied and the intentions of the deceased. If the inheritance is spent on improving the family home, paying for the day to day expenses of the family and generally used for the benefit of both parties, it is likely to be treated as a financial contribution by the party who received it.

If an inheritance is received after separation, it will generally not be viewed as a contribution to the asset pool and may be ‘protected’ from distribution between the parties.

If the deceased had specific intentions for the inheritance, this may influence how it is treated. For example, if they specified that it was for the benefit of the family as a whole, it is more likely to be treated as part of the asset pool. If, however, the deceased specified that the bequest was to a party for a particular use who then kept the inheritance separate from the asset pool, it is likely to be treated as separate from the asset pool.

If the ex-partner of the beneficiary assisted with caring for the deceased (e.g. if a deceased parent lived with the couple) the inheritance is more likely to be treated as belonging to the family as a whole.

Where a large inheritance is received late in a relationship and the test of the asset pool is small and if a division of the balance of the asset pool would result in an unjust settlement considering the parties’ contributions, the inheritance may be treated as part of the asset pool. That is, if the party who has made the greater contribution is not the one who receives the inheritance, it may be included to give that party a just settlement.

Resolution of a property settlement

It is always preferable if possible for parties to family law property negotiations to settle the matter amicably. This can be achieved through direct negotiations, through lawyers, or by undergoing family dispute resolution. If a dispute cannot be resolved amicably, either party can file an application for property orders in the family law courts. An application must be filed within 12 months of a divorce becoming final or for de facto relationships, within two years of the date of final separation.

Call us for free advice on the status of an inheritance in a family law context.

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What is Probate & how do I apply for it in NSW?

What is a grant of probate?

An estate’s executor/s must collect the deceased’s assets, pay their debts, then distribute the assets to the beneficiaries. A grant of probate is a legal document that authorises an executor/s to follow the provisions of the will in managing a deceased estate.

Once the executor gives the grant of probate to those holding the estate’s assets (including banks or retirement villages holding bonds) or to whom the estate owes a debt they must transfer the assets to the executor (or to beneficiaries named in the will).

The Supreme Court of New South Wales (the Court) determines uncontested applications for grants of probate (known as grants in common form).

The Court can only grant probate if the deceased’s assets are located in New South Wales. If they are in more than one state or country the executor/s may have to apply for a grant in each state or country. However, assets held in other Australian states and in certain countries may only require a reseal of the NSW grant. This article is restricted to grants of probate in NSW

Must I obtain a grant of probate?

Not every deceased estate has to obtain probate. The type, size and value of the assets may be such (e.g. smaller amounts ) that an asset holders may release assets without the need to obtain probate.

Is there a difference between joint tenants and tenants-in-common?

When the deceased’s assets were jointly owned (i.e. where the co-owners [called tenants] did not own distinct shares of the property), the property automatically passes to the remaining joint tenant/s. For example, if all the deceased’s assets were held as a joint tenant with a surviving beneficiary/s probate would not be required.

Probate is required if the deceased owned real estate solely in their name or as a tenant in common (i.e. as a distinct share) with a surviving beneficiary. The certificate of title (or title deed) shows if the ownership of real estate was as joint tenants or tenants in common. New South Wales Land Registry Services (NSWLRS) can provide this information.

What are the asset holder’s requirements to release assets?

Asset holders differ in their requirements for releasing assets. If there is no real estate, the executor (especially if they are the sole beneficiary) should ask the asset holders (e.g. banks, superannuation funds, insurers) if they will transfer the assets without a grant of probate. They may be willing to do so if the executor gives them a certified copy of the death certificate, the will, a declaration signed by the beneficiary/s of their entitlement, and/or an indemnity in case there is subsequently a claim on the estate.

Superannuation is not considered part of the estate. Depending on the terms of the policy, neither are the proceeds of life insurance. However, a trustee may require probate before they will determine who is entitled to superannuation or insurance proceeds.

What is the timeframe for lodging an application?

If an executor files an application for probate after 6 months from the date of death of the deceased, the court requires an explanation for the delay by way of an explanation in the affidavit of executor or an Affidavit of Delay (using UCPR Form 40).

Who can apply?

Executors

The Will-maker (testator) should nominate an executor/s in the will. If an executor is not nominated in the will it is not possible to apply for probate. In that case a beneficiary named in the will can apply for letters of administration with the will annexed.

The testator may nominate an executor as their first choice (the instituted executor/s) and an alternate executor (the substitute executor/s) if the instituted executor predeceases them or is unable or unwilling to act. A substitute executor can only apply for probate if the conditions specified in the will for substituted appointment exist.

If the testator has nominated more than one instituted/substitute executor all of the named executors should apply unless one or more has died (the death certificate must be attached) or have filed a court form indicating that they do not want to apply (renouncing probate). The affidavit in support must explain why other executors are not applying.

If the instituted executor predeceased the testator, the substitute executor refers in the affidavit of executor to the case number of the probate application for the deceased executor or attaches a copy of the death certificate.

If the executor’s name in the will differs from their name in the application for probate this must be explained (e.g. by annexing a copy of their marriage certificate to the affidavit of executor).

If the testator has not specifically named an executor (eg. appointing someone holding an office at the time of their death), the affidavit of executor must include evidence supporting the applicant’s entitlement to apply.

Marriage or divorce after execution of Will

A testator marrying or remarrying after making a will may revoke the will. If the testator married after the will was made, you should seek legal advice as to whether the will has been revoked. A will which says it was made “in contemplation of marriage” would not normally be revoked by a subsequent marriage.

Divorce also normally revokes the former spouse’s entitlement under the will and their rights to be the executor.

Renouncing or resigning as executor

If an executor appointed under a will is unwilling to take on the role they can renounce probate. If there are several instituted executors, the remaining instituted executors can apply. Otherwise, the substitute executor/s may apply if the will says that the substitution is triggered by the instituted executor’s renunciation of probate or their unwillingness to act.

An executor’s renunciation of probate is included in the notice of intention to apply for probate (published on the Online Registry).

Executors cannot renounce probate once a grant has been made. An executor can be removed after a grant has been made only by a Court order revoking the grant of probate.

An executor may delegate their executorial duties only to the NSW Trustee and Guardian or a trustee company.

Where an executor/s is unwilling or unable to apply but is not prepared/is unable to formally renounce probate, a notice must be served on the executor/s requiring them to apply for probate. If they do not comply with the notice:-

  1. the other executor/s may apply without that executor; or
  2. there is no other executor/s, a beneficiary may apply for letters of administration with the will annexed.

If an executor is unable to apply or renounce for medical reasons or is overseas or cannot be located, evidence must be provided with the grant of probate reserving their right to later apply.

The Will

The original Will

The original will (and any codicils) must be filed with the probate application and will be retained by the Court. A will or codicil must be in writing and signed by the testator and two witnesses and be verified that the will is not a carbon or photocopy.

If you cannot find the original will but have found a copy, or if the will is unsigned or has not been properly witnessed, it may still be possible to apply for probate.

Unsigned/undated Will

If the will is undated, you must provide evidence as to when it was executed. If there is another will, this will establish which is the latest will. You should provide an affidavit by an attesting witness or from people with information as to when the will was made or the possible range of dates when it was made.

An affidavit of an attesting witness will be required if there is any doubt as to the proper execution and witnessing of the will. If the will has any hand-written amendments not initialled by the testator and the witnesses, an affidavit of attesting witness as to whether the amendments were made before the will was executed will be required. Affidavit evidence may also be required if it appears that other documents were attached to the will which have subsequently been removed, or if the will has been torn or defaced since it was executed.

Codicils

A codicil is a document that amends a previously executed will. If the testator has made a codicil/s, the application will be for probate of the will and the codicil/s.

Applying for Probate on a copy of a Will

If the original will cannot be found but there is a copy which is believed to be the last will of the deceased then the executor named in the copy may be able to apply for probate on the copy of the will. The actual copy of the will must be filed with the probate application.

Searches must be done to locate the original Will

The affidavit of executor must explain where the copy was found and set out all the searches made for the original will or any later will. These must include:-

  1. searches through the deceased’s personal papers and effects;

If the copy shows that the original will was prepared by a solicitor then enquiries should be made with the firm of solicitors to check that they do not have the original will, and as to their usual practice when wills were prepared for their clients (ie whether they normally held originals in safe custody or gave the client the original).

If the will was last held by a solicitor then an affidavit by the solicitor or someone in that solicitor’s firm should be provided as to the searches they have undertaken for the original will.

If the evidence suggests that the original will was last in the possession of the deceased there is a presumption that the deceased revoked the will by destroying the original. To rebut this presumption, the application must be supported by evidence indicating that the deceased did not intend to revoke the will. This can include:

  1. conversations with the deceased regarding their will, and
  2. evidence of no substantial change of circumstances since the will was made that may have led to an expectation that the deceased may have changed their will.

List those entitled under intestacy

The affidavit of executor must say who would be entitled if there was no will (called “intestacy”).

A limited grant

A grant of probate on a copy of a will is a limited grant. Although the original will is unlikely to be found, the grant is limited until the original will is found and an application for a grant of probate of the original will is made.

Applying for Probate of an informal Will

A will must be signed by the testator and witnessed by two witnesses who both saw the testator sign. Nevertheless the Court may grant probate for a will that does not meet these requirements if it is satisfied that the deceased intended the document to be their will.

Caveats and contested proceedings

A person with an interest in a deceased estate can file a form called a caveat preventing the Court from issuing a grant. There is a filing fee and a caveat remains in force for 6 months. It must be served on known applicants or potential applicants for a grant of probate or administration of the estate.

Reasons for filing a caveat include where:-

  1. someone wants to challenge the validity of an informal will; or
  2. a will that appears to be valid but it is claimed that the will is a forgery; or
  3. there is doubt as to the testator’s testamentary capacity, or
  4. it is claimed that the will was executed under undue pressure; or
  5. there is more than one possible will naming different executors.

An executor who wants to proceed with an application for a grant of probate can apply to the Court for removal of a caveat if they believe that the caveator has no standing or that there is no real dispute as to a will’s validity.

If there is doubt as to a will’s validity, contested proceedings can be commenced for probate to be granted in solemn form. Such proceedings are commenced by statement of claim and determined by a judge.

https://www.supremecourt.justice.nsw.gov.au/Pages/sco2_probate/sco2_filing_instructions/applying_for_probate.aspx
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Challenging a Will in NSW

When can a Will be challenged?

A Will can be challenged by anyone with an interest or relationship with the Will-maker (known as the ‘testator’).

Reasons for challenging a will include:

  • Will not legally binding;
  • belief that a Will has been tampered with;
  • belief of existence of a more recent Will;
  • belief that Will does not make proper provision for claimant;
  • belief that the testator lacked capacity;
  • belief that the testator was tricked or unduly influenced into making the Will.

Undue influence is the use of persuasion, duress, pressure, force, coercion or fraudulent practices to the extent that the free Will of the testator is destroyed.

Preventing Challenges to Wills

If the testator tells loved ones what each is to receive in their Will they know what to expect which helps to prevent challenges.

Courts rarely interfere with the testator’s wishes if the language in a Will is clear and precise. Gifts in a Will being well-defined, expressing clear reasons for giving gifts, and having evidence showing that the Will was not tampered with reduces the chances of a successful challenge.

What is meant by Contesting or Challenging a Will?

A contest to a Will is a formal, legal objection or challenge to the validity of a Will, raised by an interested party, on the basis that:

  • The Will does not accurately reflect the testator’s true intentions; or
  • The will is grossly unfair, excluding the deceased’s dependents or someone who should have been provided for; or
  • the Will is a forgery.

In general, a belief fact that a Will is unfair will not be sufficient grounds to challenge its validity. Contests to Wills may claim that the testator was not acting freely when they made their Will because they:

  • were acting under undue influence; or
  • were the victim of fraud; or
  • lacked the necessary capacity (known as ‘testamentary capacity’); or
  • lacked the mental faculties necessary to write a valid Will.

Is There a Time Limit on Contesting a Will?

If the testator passed away after 1 March 2009, you have 12 months from the date of death to raise a Will dispute claim.

If the testator passed away before 1 March 2009, you had 18 months from the date of death to raise a claim. All is not lost however, as in certain situations you may still be able to make a claim. If you did not know the person had died, or you received threats then the court can set aside the time limit. It’s very important to act quickly, as delay may jeopardise your claim.

If the date of death is uncertain, the court will determine a reasonable date.

When can a Will be Contested?

You cannot challenge a will simply because you do not like its contents, or because you are aggrieved. A legal challenge to a will has to proceed on a ground recognised by law.

A testator’s the right to distribute their estate as they see fit is subject to legislation for the protection of those for whom the deceased had a ‘moral responsibility’ to provide. A Will can be challenged when a loved-one feels that the testator failed to meet this responsibility.

Can I Challenge a Will After Probate Has Been Granted?

While it’s easier to challenge a will before probate is granted, it is possible to raise a challenge after the grant of probate. In this case, you would have to explain to the court why the challenge was not made earlier and satisfy them as to the validity of the grounds for your challenge.

Can I Challenge the Validity of a Will?

Under the Succession Act 2006 (NSW), the two general classes of person have ‘standing’ (the necessary legal entitlement) to challenge a Will are:

  • A Person/s named in the Will (the beneficiary/beneficiaries); and
  • Anyone who would stand to inherit if the Will was invalid. That is, persons who have been ‘disinherited’ or excluded from inheriting.

People entitled to contest a Will because they believe they have not been sufficiently provided for are:

  • Spouses
  • Former Spouses
  • De Facto’ partners – De facto partners are partners who were living with the deceased when they passed away, in a manner similar to that of husband and wife (including same-sex relationships).
  • Children, including adult children, those under 18 and adopted children. Step children may contest the will if they were dependent on the testator.
  • Grandchildren, provided they were at least partially dependent on the deceased;
  • Members of the deceased’s household who were wholly or partly dependent on the deceased. This includes those in ‘close personal relationships’ with the deceased;
  • Parents. If dependant on the deceased, a parent may be able to contest a will.

A claimant on a Will must satisfy the Court that adequate provisions were not made for their maintenance, education or advancement in life.

Can I Challenge Part of a Will?

A Will can be challenged in whole or in part. An entire Will can be challenged, or only the part to which the claimant takes exception.

What Will the Court Look at When a Will is Challenged?

The criteria the Court uses to assess claimants on a Will include:

  • Is the Will ‘grossly unfair’?
  • Should a claimant left out of a Will been provided for?
  • Are the testator’s intentions clear?
  • Did the testator have the mental capacity to understand what he/she was doing?
  • Was a claimant partially or fully dependant on the deceased excluded from a Will?

Will I Have to Go to Court to Contest a Will?

Where possible, Will disputes are resolved through a settlement agreement or mediation. This prevents the matter going to Court which reduces legal costs, brings earlier resolution and preserves family relationships.

Sometimes, however, going to Court cannot be avoided.

How Much Does it Cost to Contest a Will?

The total cost of a contested Will claim depends on how long it takes to resolve a claim: either by negotiation or mediation before or after the dispute reaches Court; or after a long drawn out application to the Supreme Court. Each case is different.

What Will I Get If My Challenge Is Successful?

If you successfully contest the validity of a Will, the court will ‘set aside’ the Will. This has the legal effect of making it as though the will has never existed. None of the provisions will be applied and the estate will be distributed according to the second-to-last will, if one exists. If no other will exists or can be found, the laws of ‘intestate succession’ apply (Intestacy is the state of having died without a will). Those laws mandate how an estate is to be divided. Provision is made for certain relatives and dependants, regardless of the wishes of the deceased.

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Relocation with children after separation

This article addresses the question of when — if ever — it is appropriate to move to a new city, a new state, or even overseas with your children.

For simplicity, in this article it is assumed that the children of a relationship spend time with the father and live with the mother who wishes to move. The same principles apply to all scenarios where two or more people with parental responsibility have a parenting arrangement for one or more children. References to a court in this article include the Federal Circuit Court and the Family Court.

What is relocation?

In Family Law, relocation refers to you moving with the children to another town, state or country.

If moving is going to limit the time the children spend with the father, the court may make Orders stopping you from moving.

The complexities of relocation and travel for children after separation

When you separate, whilst sharing parenting responsibilities, you also need to be able to earn a living and to pursue meaningful opportunities for yourself.

Your opportunities may be limited in your current location, or you may wish to move interstate or to a new city to be closer to support networks or better job options. Whatever your motivation for seeking to relocate, there are factors to consider around the impact that moving can have on your children.

Significant psychological factors to consider about relocation after divorce and separation include the potential for the development of mental health problems and complex developmental issues. After separation it is critical to establish a routine and continued and ongoing support and care from both parents.

Reaching agreement

If you are the children’s primary carer and you are looking to move, the first (and best) thing you should to is talk to the father to try to agree to change the time the children spend with him. While he may be completely opposed to the idea at first, you may find that over time you can reach a compromise. For example, the children could live with him for longer periods during school holidays. He may even be open to moving to where you are looking to relocate.

If you cannot reach agreement the next step should be to seek legal advice and attend family dispute resolution. If you reach agreement here, you should formalise it by making a parenting plan, or by applying to the family court for a consent order.

The court can intervene and make a relocation order

If you are looking to move, and you have made this decision considering what is in the best interests of your children — but the father is still refusing to agree — then the court may intervene.

A relocation order sets out conditions of relocation, including when and where a parent can move and how often the other parent can visit.

Best interests of the child

In relocation matters, the guiding principle is the “best interests of the child”. The relocating parent need not present a compelling case but instead must show how it would be in the best interests of the child along with plans as to how the non-relocating parent might still have a relationship with the child.

The Court will consider the existing relationship of the child with the non-relocating parent. This could include circumstances such as family violence that could make for an unsafe situation for the child and parent.

Views of the child

The views of the child will be considered depending on their age and maturity, but the Court will not necessarily endorse these preferences. 

All options should be explored, including both parents relocating, to maintain a relationship with the child.

Each case is different, and a determination will be based on the specific facts and circumstances of the case. In reaching a decision, the Court must balance the child’s interest with those of both parents in a way that promotes the welfare of the child while recognising the interests of the parents.

A new job in a new town may not be considered a suitable move, especially if it:

  • Causes the children significant upheaval;
  • Contributes to the loss of their support networks; or
  • adversely impacts a child’s relationship with the father.

If you move without a court order or without the father’s consent, the court may require you to return with them until final orders are made. If you break a current court order that you not move, the father can ask the court to order that the children be located and recovered to his care.

Can the children travel overseas?

If you are planning an overseas holiday with the children, you should advise the father of your intention as soon as possible. You should provide details of where you will go, a full itinerary and contact numbers for your accommodation.

How do I apply for a passport for my child?

Applications where both parents give written consent can be lodged at an authorised Australia Post office or an Australian Passport Office.

If the other parent will not give written consent, a written request can be made to the Approved Senior Officer of the Department of Foreign Affairs and Trade to consider issuing the passport due to ‘special circumstances’. For more information about requests to consider ‘special circumstances’ contact the Australian Passport Information Service on 13 12 32 or go to www.passports.gov.au.

If you have tried to speak to the father about moving and they oppose your proposal, we can help you to mediate a decision about relocation and may help you to reach an agreement without having to seek a relocation order through the courts. If you need advice on relocation orders, contact us today.

We can discuss your position in a free consultation; and there is no obligation to proceed with us after this free session.

The Family Court website has information on this topic: http://www.familycourt.gov.au/wps/wcm/connect/fcoaweb/family-law-matters/parenting/relocation-and-travel/

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Granny Flat Agreements

What is a granny flat agreement? A granny flat agreement (also known as a granny flat interest) is an interest in accommodation for life. It is a family arrangement offering an alternative for elderly family members (which for this article we assume are parents) who may otherwise have to move into a nursing home or aged care facility. It allows a parent to move in with a relative (which for this article we assume is their child) in exchange for the transfer of an asset without affecting their Centrelink entitlements. Parents are granted a granny flat interest in their child’s home in exchange for exclusive occupancy. The parent, their partner or a trust or company they control must not own the property in which they have a granny flat interest. Does the agreement relate to an actual granny flat? A granny flat agreement need not relate to a separate dwelling known as a granny flat. It can relate to a room or a separate building on the land but must allow for the parent’s exclusive occupancy of the space. What are the requirements for a granny flat agreement? A granny flat agreement will usually include an exchange of assets (possibly property and/or cash) for the parent’s right to live in their child’s property for life. The agreement creates either a life tenancy (which grants the parent the right to live in the property) or a life interest (which grants a parent a right to use and benefit from the property as they wish) but not legal title to the property. The agreement should set out whether the parent pays rent, outgoings, utilities maintenance and repair costs. The agreement says what will happen if the it ends, which may be due to the parent’s death, or their medical needs meaning they can no longer live at the property, or by agreement. The agreement should deal with how the parent will be compensated for giving up their granny flat interest if it ends by agreement. If the parent leaves the property within 5 years, Centrelink reviews the granny flat interest. If their reason for leaving is:
  • something you could expect when you created the granny flat interest – the gifting rules will apply; or
  • something that was unexpected – the gifting rules may not apply.
Unexpected reasons may include sudden illness, family relationship breakdown, elder abuse or property damage. Centrelink implications Before entering into a granny flat agreement, you should seek financial planning advice to ensure that the arrangement will not affect your parent’s Centrelink entitlements. Centrelink will apply the reasonableness test to determine whether the value of the asset transferred for the interest was more than the it is worth. If they assess that the amount paid was more than the value of the granny flat interest, the parent will be considered to have deprived themselves of an asset, which may affect their Centrelink entitlements. Do I need legal advice before entering into a granny flat agreement? Centrelink does not require a granny flat agreement to be in writing but it is highly recommended. A parent should seek financial and legal advice before entering into a granny flat agreement. A properly documented granny flat agreement will ensure that:
  • the parent has the security of tenure; and
  • all parties agree regarding the interest granted, the particulars of the asset exchanged, the parties obligations during the currency of the agreement, and the parties obligations when the agreement ends.
If you need advice regarding granny flat agreements, contact us today.
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What is a Binding Financial Agreement and is it right for me?

Binding financial (pre-nuptial) agreements can be completed at any stage of a relationship or marriage. Lawyers may not be keen on them due to the risk that the Court may set them aside. This article concludes that for many couples their advantages outweigh their disadvantages. https://www.mondaq.com/australia/divorce/708728/binding-financial-agreements-are-they-worth-the-paper-they-are-written-on

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How soon can an executor sell estate property?

Executors of a will must wait until probate has been obtained before they can sell the former residence of the deceased (or any other estate property). The following article give s good potted summary of an executor’s duties selling real property forming part of the deceased estate.

https://www.realestate.com.au/advice/how-to-sell-a-deceased-estate/#:~:text=Jemmeson%20says%20a%20property%20can,than%20two%20years%20after%20death.

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