A deceased estate is whatever a person owned in their own name when they died. Debts come out of it first. The executor named in the will is the one who deals with it, once the Supreme Court of NSW has granted probate.

When families ask us what a deceased estate is, it is usually within weeks of the funeral, and the conversation turns to the house fast. Some of what they assumed was in the estate won’t be.

Key takeaways

• Anyone who dies owning property leaves an estate. The will decides who receives it; without a valid will, the Succession Act 2006 (NSW) decides.
• A home held as joint tenants goes straight to the surviving owner and never reaches the will.
• Super and life insurance paid to a nominated beneficiary sit outside the estate, although a NSW court can draw them back in as notional estate if a family provision claim is made.
• Debts are paid from the estate first. Family members are not personally liable for them unless they borrowed jointly or signed a guarantee.
• Land is transferred into the executor’s name by transmission application before it can be sold or handed on.

Does every person who dies leave a deceased estate?

Anyone who owned something in their own name leaves one. The will only decides who gets it. Without a valid will, the intestacy rules in the Succession Act 2006 (NSW) decide, and a surviving spouse or de facto partner is first in line under them.

Banks and the land registry will ask who the legal personal representative is. In most estates, the answer is the executor of a will that NSW courts have admitted to probate. Administrators come in when there is no will, or nobody named in it can act, and they get their authority from letters of administration.

What is in an estate, and what passes outside it?

A deceased estate holds whatever was in the deceased’s sole name, plus their share of any property owned as tenants in common. Jointly owned assets and money paid to a nominated beneficiary go elsewhere.

The first document we ask for is the title search. “We owned it together” can mean two different things in NSW, and the title is where we find out which: joint tenants, or tenants in common.

With joint tenants, the surviving owner holds the whole property from the moment of death. They lodge a notice of death with NSW Land Registry Services, and the title is updated without any grant of probate. Whatever the will says about the house makes no difference. A tenant in common’s share goes into the estate.

A will can’t change a joint tenancy. A severance can, by converting it into a tenancy in common, but only while the owner is alive. In NSW, one joint tenant can sever without the other’s consent by registering a transfer. We raise this most with blended families: a parent, a newer partner and a child from an earlier relationship. Left as joint tenants, the parent’s half of the home goes to the partner on death, whatever the will says about the child.

Property outside the estate is not always out of reach. NSW is the only Australian jurisdiction where the Supreme Court can designate assets that passed outside the estate, including a joint tenancy share or a super death benefit, as notional estate. Those assets can then be used to meet a family provision claim by an eligible person who was left out of the will or given too little.

Who is responsible for deceased estate administration?

The executor named in the will, or an administrator the Supreme Court appoints. Banks and NSW Land Registry Services usually want to see a court grant before they release or transfer anything of substance.

An executor of a deceased estate in NSW applies to the Probate Registry of the Supreme Court for a grant of probate. Where there is no will, the same registry deals with applications for letters of administration.

In a deceased estate, NSW rules require a notice of intended application to be published on the NSW Online Registry at least 14 days before the application is filed. The notice gives creditors, and anyone holding a later will, the chance to come forward.

From the moment they take on the role, the executor holds the assets on trust and owes fiduciary duties to every beneficiary. In practice that means a record of every dollar in and out, and the same care for the sibling who returns calls and the one who doesn’t. An executor who doesn’t want the job can renounce it, provided they haven’t already started dealing with the assets.

How is a deceased estate distributed?

Funeral expenses and debts come out first. What remains goes to the beneficiaries named in the will, or to relatives in the order the intestacy rules set.

Debts are paid from the deceased estate before anyone inherits, and they stop there. A family member is personally liable only if they were a joint borrower or a guarantor. Collection letters addressed to grieving relatives are often worded as though the family has inherited the debt.

They haven’t.

Before distributing a deceased estate, NSW executors also need to allow for family provision. An eligible person under Chapter 3 of the Succession Act can ask the Supreme Court for a greater share within 12 months of the date of death, and an executor who distributes early can be left personally exposed if a claim follows. Many executors hold the final distribution until that period has passed.

A beneficiary of a will is entitled to be kept informed and to see the estate accounts. Setting the pace is a different matter. Distribution is the last stage of deceased estate administration, and for most families the one that feels slowest to arrive.

Deceased estate transfer of property NSW: what happens to the house?

The house moves first to the executor or administrator by a transmission application, lodged with NSW Land Registry Services once the grant has issued. From there, the estate either sells it or transfers it to the beneficiaries.

The sale contract names the executor or administrator as vendor. They hold the property on trust for the beneficiaries until settlement, and the proceeds are paid into the estate.

Should the estate sell the house or transfer it first?

In most matters, we recommend the estate sells. Transfer the house to four siblings first, and any one of them can hold out on price or timing. The remedy is then an application to the Supreme Court under section 66G of the Conveyancing Act 1919 (NSW) to appoint a trustee for sale, which costs time and goodwill the family rarely has to spare. A direct transfer suits one situation well: a single beneficiary who is keeping the property.

What if a beneficiary is living in the house?

This is the hardest conversation in an estate, often because the person living there cared for the parent in their final years. The executor of a deceased estate owes duties to every beneficiary, including the ones who don’t live there, so the arrangement can’t run on goodwill alone. Rent or an occupation fee and a move-out date need to be agreed early and in writing. The insurer needs to be told as well.

Why do co-executors usually sell at auction?

Where there are several executors, expect an auction. They have to act together, and a public sale is the simplest way to show the estate received market value. The reserve price is where joint executors most often fall out.

Agents are often happy to list deceased estate property before the grant has issued. We’d hold off. Settlements that drag on for weeks usually trace back to paperwork that should have been finished before the listing, most often a grant still sitting with the registry or a transmission application not yet registered. Deceased estate property also needs to be checked for any caveat or mortgage on title before a contract goes out.

The contents belong to the estate, down to the boxes of papers in the spare room, and the executor is responsible for clearing them. When siblings aren’t speaking, this is the job nobody does.

What does “deceased estate” mean in a property listing?

It tells buyers the owner has died and the executor or administrator is the seller. Nothing more.

The deceased estate meaning in a listing is narrow, and the label gets misused. A house sold to fund a parent’s move into aged care is not a deceased estate sale. The owner is alive, and the sale is theirs, or their attorney’s under an enduring power of attorney, which stops operating on death. The label also has nothing to do with whether anyone died in the house.

When should an executor or beneficiary get legal advice?

Early, before the probate application is filed and before any property is listed. Most of the delays and disputes we see trace back to that first month: a house listed before anyone checked how it was held, or a sibling living in the property with nothing agreed in writing.

If you have been named as executor, or you are a beneficiary who isn’t getting clear answers, our deceased estate lawyers Sydney team can review the will and the title with you and set out what needs to happen, in what order. Book a confidential consultation.