Probate Granted: The Real Work Begins

The executor opened the envelope and read the first line twice.

Probate had been granted.

After weeks of locating documents, checking names, swearing an affidavit and waiting for the court, the estate finally had formal authority behind it. The family assumed this meant the inheritance could now be transferred.

One beneficiary sent their bank details that afternoon. Another asked when they could collect the deceased’s vehicle. A third wanted the house placed on the market immediately.

The executor had to give an answer nobody wanted to hear:

“Probate is an important milestone, but the estate is not ready to be paid out.”

In New Zealand, probate formally recognises the will and confirms the executor’s authority to administer the estate. It allows the executor to prove that authority to banks, investment providers, insurers and other organisations. It does not automatically collect the assets, settle the debts or remove the risk of estate claims. citeturn202929search0turn202929search2

After probate, the executor moves from proving the right to act into the practical work of gathering, managing and distributing the estate.

## First, Check the Grant Carefully

Before sending probate to anyone, check that the grant is accurate.

Confirm:

– The deceased’s full name is correct
– The correct will and any codicils are covered
– Every executor receiving probate is named
– The date and court details are accurate
– No page appears missing
– The grant matches the estate being administered

Keep the original grant secure. Banks and other organisations may accept certified or electronic copies, but their requirements differ.

Do not send the only original through ordinary mail unless the receiving organisation or court specifically requires it. Record where every certified copy is sent and when it is returned.

The executor should also create a central post-probate file containing:

– The grant
– The will and codicils
– The death certificate
– Asset-holder correspondence
– Valuations
– Creditor records
– Tax documents
– Property records
– Estate account statements
– Beneficiary communications

The volume of paperwork usually increases after probate rather than decreases.

## Notify Every Asset Holder

The executor should now contact each organisation holding property in the deceased’s sole name.

These may include:

– Banks
– Investment providers
– Retirement-savings providers
– Share registries
– Life insurers
– Employers
– Finance companies
– Business partners
– Government agencies
– Overseas institutions

Each organisation may request a different combination of documents, such as:

– A certified copy of probate
– A death certificate
– The executor’s identification
– A deceased-estate claim form
– Tax information
– Bank account verification
– Instructions signed by all proving executors

Do not assume that presenting probate produces an immediate transfer. An institution may need time to verify the documents, calculate a date-of-death balance, close an account or sell an investment.

Keep a contact register showing what was supplied and what remains outstanding.

## Open and Use an Estate Bank Account

Once the required authority is available, an estate bank account can commonly be established for administration funds.

The estate account should become the central place for:

– Closed bank-account balances
– Investment proceeds
– Property-sale proceeds
– Refunds
– Insurance payments
– Rent
– Interest
– Other estate income

Estate expenses should also be paid from this account where practical.

Do not mix estate money with the executor’s personal funds. Mixing funds makes accounting difficult and can create suspicion even when no money is deliberately misused.

If the executor paid legitimate expenses personally before probate, reimbursement should be recorded clearly. Keep the original invoice, proof of personal payment and an explanation of why the expense was incurred.

An executor should never withdraw an informal lump sum for “time and trouble.” Reimbursement of genuine expenses is different from remuneration for acting as executor.

## Gather In the Estate

Collecting the deceased’s assets is sometimes called “gathering in” the estate.

Probate gives the executor authority, but each asset still has to be located, valued and transferred into estate control. The executor effectively holds the estate temporarily while preparing it for lawful distribution. citeturn202929search21turn202929search37

The process may involve:

– Closing sole bank accounts
– Redeeming term deposits
– Selling or transferring investments
– Claiming insurance proceeds
– Recovering unpaid wages
– Collecting refunds
– Recovering loans owed to the deceased
– Transferring vehicle ownership
– Taking control of business interests
– Dealing with intellectual property
– Collecting overseas property

Continue checking mail, bank statements, tax records and email correspondence. Probate may reveal additional information, but it does not guarantee that every asset has already been identified.

A dividend notice or annual fee can reveal an investment nobody knew existed. A regular payment into a bank account may indicate rent, royalties or a private debt owed to the deceased.

Maintain an asset schedule showing:

– Description
– Ownership
– Date-of-death value
– Current value
– Location
– Institution holding it
– Action required
– Date collected or transferred

## Distinguish Estate Assets From Other Property

Not everything connected with the deceased belongs to the estate.

Property may instead be:

– Jointly owned
– Owned by a surviving partner
– Held by a trust
– Owned by a company
– Partnership property
– Leased or financed
– Borrowed from another person
– Held by the deceased for someone else

A surviving partner may also have relationship-property rights that must be considered before the will is implemented. New Zealand law recognises that a deceased person cannot simply give away the surviving partner’s share of relationship property through a will. citeturn202929search23

Do not place an asset into the estate inventory merely because it was found in the deceased’s home or used by them regularly.

Ownership should be confirmed through titles, agreements, receipts, company records and other reliable evidence.

## Deal With Land and Houses

Probate allows the executor to begin the formal process of dealing with land held in the deceased’s sole name.

The property may ultimately be:

– Sold
– Transferred to a beneficiary
– Retained temporarily
– Used to satisfy a particular gift
– Dealt with under a trust created by the will

Before deciding, the executor should review the will and the estate’s financial position.

A sale may be necessary where:

– Debts must be paid
– Several beneficiaries share the residue
– No beneficiary can fund a transfer
– The will directs a sale
– The estate needs cash for tax or claims

The executor should ordinarily obtain reliable information about value and use a defensible sale process.

This may involve:

– Obtaining an appraisal or formal valuation
– Checking the title
– Confirming rates and insurance
– Completing urgent maintenance
– Clearing the home carefully
– Preparing disclosure documents
– Selecting a reasonable method of sale
– Reviewing offers objectively
– Recording the reasons for accepting an offer

The executor is not required to predict the market’s highest possible point. They should not, however, accept an obvious undervalue merely because beneficiaries are impatient.

A sale to the executor, a relative or an associate requires particular caution because of the conflict of interest.

## Continue Protecting Property

Probate does not reduce the executor’s responsibility to preserve estate value.

Continue to:

– Maintain suitable insurance
– Meet vacancy conditions
– Inspect empty property
– Secure valuable belongings
– Arrange necessary repairs
– Maintain rates and essential services
– Protect vehicles and equipment
– Control access to the deceased’s home

Tell insurers that probate has been granted, but do not assume the policy automatically transfers without further paperwork.

If the house remains unoccupied, comply with any inspection, security, water or heating conditions. Keep dated inspection notes and photographs.

The estate may remain responsible for a property for many months while it is prepared, marketed and settled.

## Identify and Verify Debts

Beneficiaries are paid from the net estate, not from the headline value of its assets.

The executor should identify all valid liabilities, including:

– Mortgages
– Credit cards
– Personal loans
– Funeral costs
– Medical or residential-care bills
– Rates
– Utilities
– Tax
– Business debts
– Guarantees
– Property expenses
– Professional administration fees

Do not pay an invoice merely because it is addressed to the deceased.

Ask for supporting evidence where necessary, particularly for:

– Private loans
– Old accounts
– Disputed invoices
– Interest charges
– Guarantees
– Claims made by relatives
– Business liabilities

Similarly, do not reject a valid debt simply because nobody in the family knew about it.

If the estate may not contain enough money to pay every liability, obtain advice before selecting which creditors to pay. The executor must not favour creditors based on personal relationships or pressure.

## Pay Expenses in the Proper Order

The executor must ensure that valid administration expenses and debts are dealt with before distributing the residue.

Necessary estate expenses may include:

– Funeral costs
– Probate expenses
– Insurance
– Property maintenance
– Valuation fees
– Accounting fees
– Legal fees
– Tax
– Asset-sale costs

Specific gifts in a will do not always escape the estate’s liabilities. If there is insufficient cash, assets may need to be sold or gifts may be reduced according to the applicable legal rules.

The executor should not protect a favoured beneficiary’s gift while leaving the estate unable to pay a lawful creditor.

## Complete the Tax Work

Probate does not close the deceased’s tax obligations.

The executor may need to:

– Notify the tax authority of the death
– Establish authority to act
– File returns outstanding at death
– Prepare the deceased’s final return
– Report income received around the date of death
– File estate income tax returns
– Pay tax
– Claim refunds
– Retain records

An estate can earn taxable income from interest, rent, dividends, business activity and other sources during administration. If the estate earns taxable income, an estate or trust income tax return may be required. citeturn202929search4turn202929search11turn202929search27

New Zealand does not impose a general tax simply because a beneficiary receives an inheritance. That does not mean every estate or asset sale is tax-free.

The executor should retain enough money for known and reasonably foreseeable tax before making distributions.

## Deliver Specific Gifts Carefully

A will may leave particular assets or fixed sums to named people.

Examples include:

– A vehicle
– Jewellery
– Shares
– A cash legacy
– A family heirloom
– A particular property
– A right to occupy a home

Before transferring a specific gift, confirm:

– The asset still exists
– It belonged to the deceased
– The beneficiary is correctly identified
– The beneficiary survived any required period
– The gift was not changed by a codicil
– The estate can still meet its liabilities
– No ownership dispute exists
– The item is not needed to satisfy higher-priority obligations

Obtain a signed receipt when delivering valuable physical property.

Do not allow a beneficiary to remove the asset informally and promise to complete the paperwork later.

## Consider Claims Before Distribution

A grant of probate does not prevent someone from challenging the estate.

Possible disputes may involve:

– Inadequate provision for an eligible family member
– A promise to reward services through the estate
– Relationship-property rights
– The validity of the will
– Ownership of particular assets
– Debts allegedly owed by the deceased

A Family Protection Act application is ordinarily subject to a 12-month period running from the grant of administration, although different rules and possible extensions can apply in particular circumstances.

Executors should also understand the separate protection concerning distributions after six months from the grant. That protection depends on matters including whether the executor has been served with a claim or has written notice of an application or intended application.

The six-month point is not an automatic command to distribute everything. It must be considered alongside the wider 12-month claims period, known family circumstances and any warning of a possible dispute.

If a credible claim has been notified, preserve enough of the estate to meet it. Do not pay beneficiaries in the hope that the claimant will give up.

## Can an Interim Distribution Be Made?

An interim distribution is a partial payment before the administration is entirely complete.

It may be reasonable where:

– Most assets have been collected
– The estate is clearly solvent
– Major debts are known
– Tax can be estimated reliably
– No substantial claim is expected
– Enough money can be retained for remaining costs
– The payment follows the will

Suppose the estate holds $900,000 in cash after a property sale. The executor is waiting for a final tax calculation and one professional invoice expected to total far less than the available balance.

Rather than retaining everything, the executor might distribute a conservative portion while keeping a substantial reserve.

An interim payment may be unsafe where:

– A claim has been threatened
– A creditor is disputed
– Tax is uncertain
– A business remains unsold
– The estate may be insolvent
– Beneficiary entitlements are unclear

Tell recipients in writing that the payment is interim and that the final amount may differ.

## Prepare Full Estate Accounts

Every dollar should be traceable.

Estate accounts should show:

– Assets at the date of death
– Amounts collected
– Sale proceeds
– Income earned
– Funeral and administration expenses
– Debts paid
– Tax
– Professional fees
– Executor reimbursements
– Specific gifts
– Interim distributions
– The balance remaining
– Each beneficiary’s entitlement

An estate worth $1 million on paper may produce a much smaller residue after a mortgage, sale costs, tax, maintenance and other liabilities.

Clear accounts help beneficiaries understand the difference.

Do not wait until the final week to reconstruct months of transactions. Update the accounts as money enters or leaves the estate.

## Make the Final Distribution

Final distribution is appropriate when the executor is reasonably satisfied that:

– All material assets have been gathered in
– Property sales have settled
– Valid liabilities have been paid or provided for
– Tax has been addressed
– Specific gifts have been transferred
– Claims have been resolved or properly considered
– Beneficiaries have been identified
– Estate accounts are complete
– No further reserve is reasonably required

Follow the will exactly, subject to any binding agreement, statutory entitlement or court order affecting the estate.

Verify beneficiary bank details carefully. A last-minute email changing payment instructions should be checked through a separate trusted channel.

Keep proof of every transfer and obtain receipts for physical assets.

Probate may feel like the moment an estate is unlocked. In reality, it is the moment the executor receives the key.

What happens next determines whether the estate is protected, debts are paid correctly and beneficiaries receive the inheritance to which they are lawfully entitled.

## Frequently Asked Questions

### 1. Can the executor access bank accounts immediately after probate?

The executor can present probate to the bank and complete its deceased-estate requirements. The bank may still require identification, certified documents and signed instructions before closing accounts or releasing funds.

### 2. Can beneficiaries be paid as soon as probate is granted?

Not automatically. The executor must first collect assets, identify and pay valid liabilities, address tax and consider possible estate claims. Probate provides authority to administer the estate rather than confirmation that it is ready for distribution.

### 3. Can the executor sell the deceased’s house?

Yes, where the will and applicable law authorise the sale and it is appropriate for administration. The executor should confirm the title, obtain reliable value information, manage conflicts and use a defensible sale process.

### 4. What happens to the deceased’s debts after probate?

Valid debts remain payable from estate property. The executor should verify them and pay them before distributing the residue. The executor does not ordinarily inherit the debts personally merely by accepting the role.

### 5. Does the estate need its own bank account?

A separate estate account is generally appropriate for collected funds and administration payments. Estate money should not be mixed with the executor’s personal finances.

### 6. Can the executor make a partial distribution?

An interim distribution may be possible where the estate is solvent and enough property is retained for tax, expenses, debts and possible claims. The executor should calculate the reserve conservatively.

### 7. How long after probate is final distribution made?

There is no universal period. A straightforward estate may progress within several months after probate, while property sales, tax, overseas assets, businesses or legal claims can extend administration beyond a year.

### 8. What must happen before the estate is closed?

The executor should collect or transfer all assets, pay liabilities, complete necessary tax work, deal with claims, prepare estate accounts and distribute the remaining property to the correct beneficiaries. Records should then be retained in case later questions arise.