Need probate but can’t wait for a full grant? You may need a limited grant of representation.

Has your family member passed away unexpectedly, within days before they were supposed to settle a sale of their real estate or sign off on an already negotiated contract?

Is the purchaser threatening to charge penalty interest, or even terminate the contract, if you can’t settle on the agreed date?

Are you in a position where you need someone authorised to act on behalf of the estate, but cannot afford to wait the usual time the court requires to grant ‘probate’ of the deceased’s Last Will and Testament (Will) or ‘letters of administration upon intestacy’ (LOA)?

You may need to apply for a limited grant of representation (‘Limited Grant’)

First off, what is ‘probate’? What is LOA on Intestacy? Why are any of these necessary?

Probate is the process by which the executor applies to prove that the deceased’s Will is valid, with the aim of getting the court to authorise them to deal with the deceased’s assets so that they can finalise the estate of the deceased (estate). The executor is the person that the deceased chooses and appoints (in their will) to do all the ‘heavy lifting’ in finalising their affairs.

LOA is a bit different to probate. It applies if the deceased passes away without having executed a valid Will. The property of the deceased is distributed according to the laws of intestacy.  The steps required by an administrator (for our purpose, virtually the same as an executor) to obtain LOA are near identical to those required for a grant of probate. These usual steps include:

1. The executor/administrator applies to the court for probate on the Will/ LOA, by:-

   1. First, publishing an advertisement on the court’s website (Advert) –putting the public on notice that they intend to apply for probate on the Will/ LOA - after 15 days from publication; and

   2. Secondly, 15 days after the Advert is filed with the court, the following must be filed:-

      1. an affidavit;

      2. a statement of all of the property that the deceased held in their name and any debts that they owed, at the time of death (called an Inventory);

      3. a copy of the deceased’s death certificate issued by the Department of Births Deaths and Marriages (BDM); and

      4. the original Will (for probate only).

2. If the court is satisfied with the application, they will grant probate on the Will or LOA.

3. From there on the executor/administrator will be fully authorised to administer, and then finalise, the deceased’s estate, by ‘calling in’ all of the deceased’s assets, paying out any debts and then finally dividing the assets between beneficiaries (as provided for in the will or by the laws of intestacy).

   
   

So what is a limited grant of administration? When will I need it instead of ‘probate’?

Both probate and LOA on Intestacy are considered ‘full grants’ of representation, granting the executor/administrator total authority to finalise the deceased’s estate from start to finish, to the limits prescribed under state and federal laws and in accordance with the will (if there is one).

On the other hand, a Limited Grant—as the name suggests—only provides an administrator with a limited authority to deal with the deceased’s estate, for a specific purpose as ordered by the court. After achieving this purpose, the Limited Grant’s authority expires, and the administrator will then need to obtain a full grant of probate/LOA to press on to finalise the estate.

Limited Grants are issued for all manner of purpose, from enabling an administrator to represent a deceased estate in a law suit, to authorising another party to assume the duties of an executor who has gone MIA--and beyond.  For our purposes, we will be discussing a popular Limited Grant called ‘Letters of Administration Ad Colligendum Bona (‘ACB Grant’), which basically translates to a grant “-to collect the goods”.

What are the key features of an ACB Grant?

A person will typically apply for an ACB Grant if they need legal authority to deal with an asset of the deceased which is at risk of seriously depreciating in value if the court does not urgently authorise the person to sell, transfer or otherwise put arrangements in place on behalf of the estate, so as to preserve the asset’s value.

Most commonly, we represent parties that require an ACB Grant in order to finalise an imminent settlement for the deceased’s real estate, where the deceased had signed a contract during their lifetime, but then unexpectedly passed away before settlement, leaving no one authorised to act on behalf of their estate for settlement. In another, we acted where the owners of a pet store had advised family members (on Friday) that they had agreed to sign a contract to sell their pet store but both died the next day. In the meantime, there was no one to care for the animals or to urgently execute and complete the contract.

The key benefit of receiving an ACB Grant for a deceased estate is the court’s short turnaround for these applications.

While an executor has to wait at least 15 days before the court will issue a full grant of probate, they will waive the 15-day Advert requirement for an ACB Grant and usually issue the ACB Grant within the space of 3 days –or less—from the date of filing the application.

Further, an ACB Grant applicant won’t need to submit all of the supporting material the court requires before they will issue a full grant of probate/LOA, such as:

1. copy of registered death certificate from the BDM;

2. original Will; and

3. accurate Inventory.

An ACB Grant is basically a ‘stop-gap’ grant of representation, in which the court waives a lot of the formal requirements necessary to obtain a ‘full grant’, after assessing the urgency of the application, and the likelihood that the beneficiaries would be deprived of part or all of their inheritance, if they did not issue the ACB Grant.

However, the court takes these formal requirements very seriously and will not waive them on a whim.  As a result, they will only issue ACB Grants in very urgent circumstances, where there is a serious risk that the relevant asset will depreciate in value without the ACB Grant, and will always require the applicant to obtain a full grant after the ACB Grant serves its purpose, before the estate can be finalised.

Case study

Below is a case study of a matter where a lawyer of our office successfully obtained an ACB Grant on behalf of an administrator, keeping a real estate property settlement on foot and saving the family thousands of dollars in potential damages and interest charges in the process.

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In June 2022, Samuel—as enduring attorney for his father Arthur -- signed a real estate sale contract, selling Arthur’s property ‘Greenacre’, with a 6-month settlement to take place in early January 2023. At the same time he sold Greenacre, Arthur signed a contract to purchase the property ‘Brownacre’.

The Greenacre purchaser had also sold her property --‘Redacre’--with a settlement period of 6 months. Likewise, the Brownacre vendor had also purchased the property ‘Blueacre’, for the same settlement period. For convenience, the parties all agreed to a ‘4-way linked settlement’, for all transactions to settle on the same date.

By December 2022, Samuel had signed all required authorities, tax and duty declarations on behalf of Arthur, and looked ready for settlement.

Tragically, Arthur passed away on 11 January 2023. As a result, all of the documents that Samuel signed as Arthur’s attorney for settlement were rendered void and unenforceable. Without any court-appointed executor, no person was legally capable of authorising a settlement on behalf of Arthur’s estate. The “domino” effect was going to be horrendous.

After hearing of Arthur’s passing, the other parties to the linked settlement notified Samuel that they intended to recover damages and interest from Samuel for any loss suffered as a result of a delayed settlement. The alleged losses included default interest, arrears and recovery proceedings from a 3rd party mortgagee, removalists and alternative accommodation costs from a party who was moving from interstate and even losses from missed opportunities to sell a property to a different purchaser after terminating the contract.

These damages would dramatically reduce the value of the estate assets, if settlement did not take place on time.  

Samuel then reached out to a lawyer employed at our office for assistance, who then immediately identified the need for an ACB Grant. Overcoming serious time constraints, and the court’s reduced capacity over the Christmas closure, our lawyer urgently prepared and filed an application allowing enough time for the court to review, then approve, the ACB Grant application before settlement.

On 13 January 2023, the court issued the ACB Grant, Samuel signed a new conveyancer authorisation form on behalf of Arthur’s estate, and arranged the transfer of Greenacre to his  name as limited administrator. The next day, the 4-way settlement took place as scheduled, saving Arthur’s estate many thousands of dollars in the process.

Our lawyers have considerable experience in obtaining various kinds of Limited Grants, and are available to prepare and submit all documents required for an application. This can be done on an urgent basis with very limited notice.

If you believe you may require an ACB Grant, or other Limited Grant, contact our office as soon as possible for a free 30 minute consultation on (03) 9450 9400 to discuss your circumstances, or alternatively via email to info@andcro.com.au.

If you are enquiring after business hours attention, please include the words ‘URGENT: LIMITED GRANT’ in the email subject line to ensure our lawyers know to reach out to you as soon as possible.