One of the first tasks in administering a deceased estate is working out what the estate actually consists of. It is a more precise question than it sounds. The estate is not everything the deceased used, controlled or benefited from during life; it is the property that passes under the will (or, on intestacy, under Part IA of the Administration and Probate Act 1958 (Vic)) and that the personal representative is entitled and obliged to administer.
Getting the boundary wrong has practical consequences. An executor who treats a non-estate asset as estate property may distribute money that never belonged to the estate; an executor who overlooks a genuine estate asset may leave the administration incomplete. This guide works through the categories that most often cause difficulty in Victoria. It is general information only — the answer in any given estate turns on the title, the governing documents and the terms of each account, policy or contract.
Assets owned solely by the deceased
The clearest category is property the deceased owned alone: a house or land registered in their sole name, bank and term deposit accounts in their name only, directly held shares and managed investments, motor vehicles, and personal effects and chattels. These are ordinarily estate assets, and they pass under the will or the intestacy rules.
Sole ownership is a question of title and beneficial entitlement, not of who used the asset. A car the deceased drove but which is registered to someone else is not, without more, an estate asset; money in an account in the deceased’s name that they held for someone else may raise a question about who is beneficially entitled to it.
Joint tenancy compared with tenancy in common
Where two or more people own property together, how they hold it matters more than the fact that they share it.
- Joint tenants. On the death of one joint tenant, the interest of the surviving joint tenant or tenants is affected by the right of survivorship. The deceased person’s interest does not pass under their will, and it is generally not available for distribution as an estate asset. A will cannot override survivorship in relation to a subsisting joint tenancy.
- Tenants in common. Each owner holds a distinct share (equal or unequal). The deceased’s share does not pass to the other owner or owners automatically; it ordinarily forms part of the estate and passes under the will or the intestacy rules.
Because the two look identical from the front door, the manner of holding should always be confirmed by a title search rather than assumed, and a joint tenancy can in some circumstances have been severed before death. Where the property is the deceased’s home and other people live in it, the practical position also needs to be considered separately from the strict legal one.
Joint bank accounts
Joint accounts are a frequent source of dispute, and it is a mistake to assume a single outcome. Whether the balance of a joint account belongs to the surviving account holder, or forms part of the estate, depends on matters such as the terms on which the account was opened and operated with the bank, who contributed the funds, and whether the arrangement was intended as a genuine joint entitlement or as a convenience so that another person could help the deceased manage their money.
A bank will apply its own account terms when deciding whether to release funds to a survivor on production of a death certificate. That is not a determination of beneficial ownership, and it does not prevent a later dispute about entitlement. Where the contributions were uneven, or the account was added to late in life, advice should be taken before the money is treated as anyone’s property.
Superannuation death benefits
Superannuation is not automatically an estate asset. A death benefit is dealt with in the first instance under the fund’s trust deed and governing rules, and usually involves a trustee decision about who is to be paid, having regard to any nomination the member made and the categories of person the fund may pay. Depending on those rules and that decision, the benefit may be paid directly to a dependant and never enter the estate, or it may be paid to the legal personal representative — in which case it is administered with the estate and passes under the will or the intestacy rules.
Practical consequences follow. A trustee may or may not require a grant before paying a benefit; a fund will usually need to be contacted separately from the banks; and the tax treatment of a death benefit can differ according to who receives it. Executors should make their own enquiries of each fund rather than assume the position, and take advice where the benefit is significant or the family position is contested.
Life insurance
Life insurance also resists a single answer. Who receives the proceeds depends on who owned the policy, whether the policy or the fund holding it permits a nomination and whether a valid nomination was made, and the terms of the policy itself. Cover held inside a superannuation fund is generally dealt with as part of the death benefit, under the deed and trustee rules described above. A policy owned personally by the deceased, with no effective nomination, may produce proceeds payable to the estate. A policy owned by someone else on the deceased’s life may pay that other person directly.
Trust assets compared with the deceased’s rights concerning a trust
Assets held on the terms of a discretionary or family trust are held by the trustee, not by the deceased personally — and so they do not simply fall into the estate. That is not the end of the analysis. The deceased may have held rights or positions that do need to be addressed, for example: a loan account owed by the trust to the deceased; units in a unit trust; an entitlement to a distribution already made but unpaid; the office of trustee or a directorship of a corporate trustee; or a power of appointment or control conferred by the deed. Some of those can be dealt with by the will; others are governed by the deed alone. Each requires the trust deed and any variations to be read.
Company assets compared with the deceased’s shares
A company is a separate legal person. Property owned by a company — premises, plant, stock, bank accounts — is the company’s, and it does not form part of the estate of a shareholder or director. What ordinarily does form part of the estate is the interest the deceased personally held: shares, loans owed to them by the company, and any accrued entitlements. Dealing with shares commonly requires a grant, and the company’s constitution or any shareholders’ agreement may impose transfer restrictions, pre-emptive rights or buy-out mechanisms that constrain what the personal representative can do.
Partnership and business interests
Where the deceased carried on business in partnership, or as a sole trader, the estate position depends on how the business was structured and documented. A partnership agreement may provide for what happens on the death of a partner, including dissolution, continuation by the surviving partners, and the valuation and payment out of the deceased’s interest. A sole trader’s business assets and goodwill are generally estate assets, but the value may depend on how quickly the business can be preserved or sold. Employees, leases, licences and ongoing contracts all require early attention.
Contractual rights, intellectual property, royalties and digital assets
Less tangible property is easily missed. Depending on ownership and terms, an estate may include debts owed to the deceased, refunds and rebates, unclaimed money, shares of accrued income, copyright and other intellectual property, royalty or licensing streams, and the benefit of contracts that are capable of passing on death.
Digital accounts need care. Domain names, online business accounts, cryptocurrency, photo and media libraries, loyalty programs and subscription accounts vary enormously: some represent genuine property, some are merely a personal licence that ends on death, and many are governed by provider terms that dictate what a personal representative can access. The practical steps are to identify the accounts early, secure access credentials lawfully, avoid logging in as the deceased where the terms prohibit it, and ask each provider what its deceased-account process requires.
Liabilities, mortgages and tax are part of the picture
An estate is not only its assets. The personal representative must identify the deceased’s debts and other liabilities — mortgages and secured loans, credit and utility accounts, guarantees, tax liabilities and any judgment debts — and pay properly payable debts and expenses in the order the law requires before distributing. A mortgage over an estate property does not disappear on death; how it is borne as between beneficiaries can depend on the will and the general law.
Tax deserves separate attention. A final personal return to the date of death is usually required, and where the estate continues to derive income during administration, estate returns may be required too. Capital gains tax questions can arise when assets are transferred or sold. Where the estate may be insolvent, advice should be obtained before any creditor is paid.
When an asset holder may require a grant
Whether a grant of representation is required is decided asset by asset. Real estate in the deceased’s sole name, directly held shares and larger institutional balances commonly attract a requirement. Requirements and any thresholds differ between banks, registries, funds and other asset holders and should be checked directly with each of them; one asset alone can make an application necessary even where the rest of the estate could have been released informally. The Supreme Court of Victoria publishes guidance on determining whether a grant is required, and our guide to what probate is and when it is required in Victoria sets out the framework. Where there is no will, or no executor able and willing to act, see letters of administration in Victoria.
A comparison at a glance
The table below is a general orientation only. It does not determine ownership, and it is not a substitute for examining the title, the governing documents, any nomination and the terms applying to each account, policy or contract.
| Asset or holding | Usually part of the estate? | Grant commonly required? |
|---|---|---|
| Real estate in the deceased's sole name | Usually yes | Commonly required |
| Real estate held as joint tenants | Usually no — the surviving joint tenant's interest is affected by survivorship | Usually not, for the survivorship step |
| Real estate held as tenants in common | The deceased's share is usually an estate asset | Commonly required |
| Bank account in the deceased's sole name | Usually yes | Depends on the bank's own requirements |
| Joint bank account | Depends on the beneficial ownership and the account terms | Depends on the bank's own requirements |
| Shares held directly in the deceased's name | Usually yes | Commonly required by the registry |
| Superannuation death benefit | Not automatically — depends on the trust deed, any nomination and the trustee's decision | Sometimes, particularly where the benefit is paid to the estate |
| Life insurance | Depends on who owns the policy, any nomination and the policy terms | Depends on the insurer's requirements |
| Assets held by a family trust | Usually no — the trustee holds them; the deceased's rights or powers need separate analysis | Depends on the trust deed and the parties involved |
| Assets owned by a company | No — but shares the deceased owned in the company usually are estate assets | Commonly required to deal with the shares |
| Partnership or business interest | Depends on the partnership or shareholders' agreement and how the interest was held | Often required, depending on the counterparty |
| Digital accounts, intellectual property and royalties | Depends on ownership and the platform, licence or contract terms | Depends on the provider or counterparty |
Three qualifications are worth repeating. First, “usually” and “commonly” are doing real work in the headings: each line has exceptions. Second, whether an asset is an estate asset and whether a grant is required are separate questions, and the answer to one does not settle the other. Third, superannuation, insurance, joint accounts, trusts and business interests are all governed by documents that must actually be read before a conclusion is reached.
A practical approach for executors
In practice, the most reliable method is documentary rather than anecdotal: obtain a title search for each property, request date-of-death balances and account terms in writing, collect superannuation and insurance statements and any nomination, obtain trust deeds, company constitutions and partnership or shareholders’ agreements, and build a single inventory that records for each item how it was held and what the asset holder requires. Our Executor Checklist for Victoria sets those steps out stage by stage, and executor duties and personal liability in Victoria explains the standard the personal representative is held to.
Holt & Macdonald advises executors, administrators and beneficiaries on Victorian deceased estates from our Ringwood office. To discuss a particular estate, see our Probate & Deceased Estates page, call (03) 9871 9300 or email holtmac@holtmac.com.au.
