Deceased Estates Checklist

1. Look after yourself

This is the most important thing.

If you are feeling overwhelmed, don’t hesitate to talk with your friends or family, or phone a confidential counseling service:

• Lifeline Australia on 13 11 14 (24 hours)
• Beyond Blue on 1300 224 636 (24 hours)
• Mens Line Australia on 1300 789 978 (24 hours)
• Grief line on 1300 845 745 (midday to 3.00am)
• Thirrili – support for Aboriginal and Torres Strait Islander people and communities – on 1800 805 801 (24 hours).

2. Pause tax correspondence

We understand that tax is not your priority right now.

Contact the ATO to let them know the person has died, and they will stop sending tax correspondence to the deceased person or otherwise trying to contact them.

Usually the person who phones the ATO is the executor or next of kin, but other people can also notify the ATO.

The customer service representative of the ATO can talk you through the next steps.

3. Determine who will manage the deceased’s financial affairs

When you are ready to deal with the deceased’s financial affairs, the first step is to work out who will manage this.

If there is a will and it names an executor, this person (or people – there may be more than one) generally manages the deceased’s financial affairs.

If there is no executor, the next of kin may take responsibility for managing the deceased’s financial affairs.

Completing the administration of a deceased estate typically takes 6 to 12 months, but can take longer.

It’s important that you finalise any tax obligations before distributing the assets of the estate.

4. Get help if you need it

If you need help with the deceased’s tax affairs, you can:

• contact a registered tax agent for advice
• Contact the ATO – who can guide you through the steps and explain what you can do.

The ATO can only help with deceased estate matters that involve tax and super.

The deceased person’s former tax agent or financial adviser may be able to help with information and advice about the deceased’s financial affairs prior to their death.

Services Australia External Link has information about registering the death and obtaining a death certificate.

The websites of the supreme courts and public trustee in each state and territory have information about managing a deceased estate.

You should seek professional advice if you need help with:

• contesting a will
• general administration of a deceased estate
• applying for a grant of probate or letters of administration
• what to do when a person dies intestate (without a will).

5. Decide if you need a grant of probate or letters of administration

You will need one of these court-issued documents to be considered the authorised legal personal representative (LPR) by the ATO. The LPR has:

• full authority to manage the deceased’s tax affairs
• unrestricted access to ATO-held information and assets of the estate.

If you are managing a small estate you may not need to apply for a grant of probate or letters of administration. However, some people or organisations who hold assets of the estate may require one of these documents before releasing these assets.

You may also need one of these documents to manage other aspects of the deceased estate. This depends on the law in your state or territory.

6. Notify the ATO that you are managing the estate

You can tell the ATO you will manage the deceased estate’s tax affairs by submitting an official notification of death. They will add your name to the estate’s records.

• If you are the deceased person’s LPR, with grant of probate or letters of administration, you will have full authority to manage the deceased’s tax affairs.
• If you are not the LPR, we can still help you. However, there are legal restrictions on the information and funds we can release to you.

7. Manage any business tax obligations

If the deceased person’s tax affairs included carrying on a business, you may need to seek further advice from a legal practitioner or registered tax agent.

Contact us here at Roy A McDonald accountants and we will be able to help with this.

If the deceased person was a sole trader or a partner in a partnership, you may need to lodge a final business activity statement (BAS) for the last tax period. This is usually the quarter in which the person died, and ends the day before their death.

You may also need to lodge any outstanding BASs and pay any tax.

If the deceased person was a partner in a partnership, on their death the partnership may dissolve, depending on the terms of the partnership agreement.

Goods and services tax (GST) and capital gains tax (CGT) may apply to the sale of assets that were used in the business.

8. Lodge a final tax return for the deceased person

Check if you need to lodge a final tax return for the deceased person. This is called a ‘date of death’ tax return.

The final tax return covers the income year in which the person died, up to the date of death.

You may also need to lodge any outstanding prior year tax returns.

To help complete these returns you may need to obtain the deceased person’s tax information from the ATO.

9. Lodge tax returns for the deceased estate

When someone dies, their assets are held in trust by their estate until the assets can be distributed to the beneficiaries. The deceased estate is a separate entity to the deceased individual.

The estate may receive income from these assets. For example, the estate may receive rental income from a property, or dividends from shares.

In this case you may need to lodge trust tax returns for the estate, and pay any tax from the estate.

You do this for the remainder of the income year in which the person died, and then for each year until the estate is finalised.

10. Finalise tax affairs

Check that all tax obligations are provided for before making a final distribution of the deceased’s property.

The LPR is liable to pay any outstanding tax-related liabilities of a deceased person, up to the value of the deceased estate’s assets. The LPR may have to meet those liabilities personally if they distribute the estate’s assets with notice of a claim by the ATO.

Source: https://www.ato.gov.au/Individuals/Deceased-estates/Checklist–what-to-do-when-someone-dies/