Discussing what to do in the event of someone’s death isn’t the brightest topic. But it is an important one. Nitschke Nancarrow’s Kym Nitschke reviews some important details about deceased estates for tax purposes.
An ‘estate’ is made up of the assets, liabilities, income and expenses of an individual upon their passing.
The estate may include items such as:
– Bank accounts
– Real estate
– Personal possessions detailed in the will
– Interest income
– Dividend income
– Rental income
These assets are subject to certain tax requirements. That’s why an estate ‘executor’ or ‘administrator’ is needed. The individual designated as the executor plays an administrative role in managing the estate of the deceased person.
The will may list one or even two people as the executors. If two are appointed, they must work together to manage the estate.
What if no administrator was delegated in the will? In this case, the court will appoint someone to take on the responsibility.
Part of an executor’s responsibility is ensuring that the estate is tax-compliant.
Here’s a general overview of an estate administrator’s duties.
Arranging the Details
One important action as an executor is to locate the will.
Making arrangements for the funeral and applying for probate (the legal process of proving the genuineness of the will) are also important steps.
The administrator is also responsible for securing a death certificate of the deceased.
Informing Important Contacts
This includes notifying the Australian Tax Office and other government bodies.
Managing the Assets
Now we come to the part of actually distributing the assets.
The first thing you need to do is locate and value the assets. Of these, you’ll have to determine which assets need to be transferred and make sure those are taken care of.
You’ll draw from the assets available to settle debts, pay income tax and cover funeral costs.
The ‘beneficiaries’ are the deceased’s surviving family members or acquaintances who are to receive a portion of the assets. Your job as executor is to ensure that all beneficiaries receive what has been stipulated to them. In some cases, this simply means dividing the remaining assets after debts, etc. have been settled.
As mentioned before, you’re also going to need to settle all tax matters connected to the deceased’s assets. Unless you are also listed as a beneficiary in the will, no tax connected with the estate has any implications for your personal finances.
Managing the estate of someone you knew who passed away can be a challenging responsibility. You may be dealing with a personal loss, and in this case, the added weight of sorting out financial matters is probably the last thing you need on your shoulders.
Fortunately, you don’t have to do this alone. The Nitschke Nancarrow financial experts are here and ready to help you navigate the tax system.
Need help in managing a deceased estate for tax purposes? Give us a call on (08) 8379 9950 or send me an email for more information.
– Kym Nitschke
Tags: Adelaide, ATO, Australian Tax Office, beneficiary, deceased estate, estate, executor, South Australia, South Australia Tax Office, taxation, will