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Australian Tax Office does not recognize executors of wills as legal representatives

I am the executor of my husband’s estate, his wife and the only beneficiary. As everything was in joint names, even the house, I did not need a lawyer and I also was not legally required to apply for probate. I was glad, because I know from other widows that this can delay proceedings for many weeks and they sometimes have no income during this time (nobody seems to care). Probate via a lawyer can cost thousands (even for non-complex estates).
Despite the fact, that probate is not a legal requirement, the ATO will not disclose any information to an executor without a letter of Probate or Administration. This seems wrong. Most estates are not complex and do not need Probate. During his life-time my husband and I worked out our tax statements jointly. However, as had retired, my husband was no longer required to submit a tax return (neither was I). We were entitled to some franking credits, but it was easy to just click on the MyGov website to claim them. Lately, the ATO have even sent them automatically. While I believe that I have got all the franking credits (for myself and my husband), the ATO told me, that they would keep any money, if I did not supply a letter of Probate. I find it appalling. It is not the fault of the ATO, but the provisions in the tax law, which do not include the executor of an estate. This should be changed. I will not do anything about it, because I do not believe that the ATO is holding any money for my husband. Not everybody will be so lucky. It would mean that every Australian Taxpayer, who dies, would not to obtain a letter of Probate, whic his quite ludicrous and it would be time-consuming and expensive for all the executors of estates. What is the point in having a will, when it would be just as easy to get a Letter of Administration for intestate people. My advice to executors would be to quickly check on the MyGov website for all the details of the deceased tax affairs. In my case, the ATO stopped access as soon as I sent them a death certificate and will.

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Hi @whbaird, unfortunately it appears that your issue may be a legal one and outside what forum members have the ability to provide advice on.

In relation to Probate and Letters of Administration, they are different beasts and this website provides some information on the difference:

Also, have you received advice that probate is not required. This website provides some information on probate:

https://www.canstar.com.au/life-insurance/what-is-probate/

Income tax may have been done or organised on behalf a spouse, but personal income tax returns are for individuals can’t be done jointly.

It could that the ATO deals with any income, such as franking credits, being assigned to an individuals tax file number even if the shares/investment is held in joint names. As a tax file number isn’t in a joint name, any franking credit would still sit under the tax file number submitted for both joint holders of the shares.

Have you called the ATO and discussed your issue to see if there is any workaround suitable to both parties?

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It is likely you will need to create an ATO account in the name of “The Estate of …” or something similar. This requires the help of a legal Professional in most cases as they know the ropes better than us lay people. I know that after my Aunt died her estate had to pay taxes for her. I believe this was under an ATO account that included Estate of in the name.

There are plenty of free legal advice places that can help guide you.

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Sorry to hear of your loss. It is a very stressful time. I’ve lost several family over recent years. Hopefully you have someone from family you can trust for support.

At first wills can be quite complex.

It may be best to promptly talk to the solicitor who you used to prepare your current wills, who can explain better as they may have wisely prepared a form of will that minimise the pain of sorting all out. They should also indicate if you need to talk to an accountant.

We’ve had to sort out two estates in recent years, one which sounds similar to your situation.
Closing your partners tax file as of the dod is a given. As @grahroll suggests you may need to create a new TFN for the estate of. However our experience in the instance of a single beneficiary who is the partner and joint owner of key assets it was not necessary to do so or to obtain probate, (state of Qld).

As it’s important for you to keep your personal financial circumstances confidential, it’s unlikely sharing more details here is a suitable way forward.

P.S.
As an executor I’ve also previously applied to the ATO for new TFNs for an estate, a tax registered business and GST. They never asked for probate or letters of administration. They were provided with a certified copy of the wills, death certificate and the IDs of the executors to 100 points. These were in place for two tax cycles, as well as used to submit a part year return for the departed up until the dod.
Your circumstances may differ in some other way.

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I do not need any legal information as I only want to raise a general issue, which affects vulnerable widows. I am just objecting to the fact that I would need a letter of Probate for finalising the estate (I have done it all), but the ATO cannot disclose any information on my husband’s tax., because of antiquated tax laws that should be amended. My husband would expect that I can finalise his tax affairs and during his life-time, we tackled any tax returns together. Being the executor of his estate should be enough. If I had known all this beforehand, I could have looked it up on his MyGov website, but it is too late and the ATO have stopped it (I submitted a will and a death certificate).

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You won’t be the first or last to find oneself in a similar situation. The law may not be antiquated or suit what you hoped to do, but there to protect against those who may chose to do the wrong thing. If the shoe was on the other foot, one may be thankful such a process/checks and balances exists.

As indicated above, it may be worth contacting the ATO to see if there is a mutually acceptable pathway to take to achieve resolution. This will not be the first time the ATO has had to deal with similar circumstances and may have precedence it can use.

There are many cases where executors haven’t acted in the interests of the beneficiaries. This includes lawyers and other parties which have used the opportunity for themselves.

An executor is a role, but does not denote one is reasonable or lawful.

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Thanks. I do not think that I will have a problem, because all the franking credits were paid into our joint account and meanwhile all the shares are in my name (for next time). However, I still think that something should be done about the situation, because most taxpayers do not need Probate, but many might have franking credits nowadays.

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Due to Covid we were in lockdown in Victoria and getting to a solicitor would have been difficult as I do not drive. It was easy to finalise the estate online and by mail. However, I am interested that maybe the ID of the executor might be a solution. Nobody has mentioned it. I sent the will and the death certificate by mail to the ATO. My husband no longer had to lodge tax returns anyhow.

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There are no taxes to be paid and the only issue are the franking credits as my husband no longer had to lodge tax returns (retired)

Nor was I suggesting that taxes had to be paid, the issue is that the ATO is no longer dealing with the person and they are now dealing with the Estate of the Person. As @mark_m stated they had to create Estate Accounts with the ATO and this generates new Tax File Numbers as well. Once this is created then the monies due previously to the deceased will now be paid to the Estate. The Estate may have to pay taxes eg Capital Gains Tax is one possibility on the sale of Assets or even possibly transfer of Assets, there may be income generated by his Estate that taxes may need to be paid on. This was the situation for my Aunt’s Estate on the sale of her properties, while she was alive for her last few years she had to pay no taxes.

There is a process in place but it is a more legalistic way of dealing with the situation than when your Husband was alive, they recognise executors as legal representatives but this recognition relates to the Estate of the deceased. If you had been an Enduring Power of Attorney this power to handle the deceased’s affairs ceases the moment they die as they are no longer a legal entity for those purposes, and immediately the Executor is the legally responsible person for the Estate of the deceased. The Estate becomes a legal entity in place of the person who dies. Sometimes the executors must even open an account in the name that reads something like “The Estate of Joe Citizen (Joe Citizen used only as an example)” as payments will only be made to that Estate Account. For the ATO you must either have grant of Probate or Letters of Administration (this can be obtained from a Court before grant of Probate to allow early Estate adminstration in the case of no will). Again I strongly suggest getting some Legal advice, the free services should be able to help.

Also my Condolences for your and your Family’s loss.

Some links that may help you & others understand the legal bits a bit better (where banks have provided info this is only for general info not because a Bank in particular has been used, every Bank would provide similar advice):

https://www.bendigobank.com.au/help/deceased-estates/frequently-asked-questions/what-is-an-estate-of-account/

https://www.anz.com.au/personal/bank-accounts/manage-my-accounts/deceased-estates/faqs/

https://www.legalaid.vic.gov.au/find-legal-answers/wills-and-estates/administration-of-estate

https://www.legalaid.qld.gov.au/Find-legal-information/Personal-rights-and-safety/Taking-care-of-other-peoples-affairs/Wills-and-deceased-estates

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Perhaps the above is the piece that should most be highlighted.

If the financial affairs are simple enough not to need probate and the deceased was doing everything online and you know the relevant access codes then … don’t tell the ATO etc. until after it doesn’t matter anymore.

That probably assumes that you can finalise everything inside a tax year but from the sounds of it that would apply for simple estates.

One thing to be careful of, particularly as we move towards, er, 1984, is that in order to continue to have online access to e.g. ATO and e.g. internet banking then you will also need to continue to have access to e.g. the deceased’s mobile phone.

So the order in which things are unwound needs to be very carefully planned.

I totally get what you are saying regarding the general problem … in such a stressful situation, the last thing you need is jumped up bureaucrats jerking you around, but unfortunately that is very likely to be the situation, at every step … and as @phb says the restrictions are at least well-motivated even if at times they are hamfisted in their implementation.

I don’t know how much your husband embraced technology but you might also want to review Apple's Activation Lock for another kind of potential problem.

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Not an option unless one intends to risk prosecution, particularly if dealing in anyway with property of the departed. The obligations on the executor are very precisely defined by law. As are the financial requirements on the banks, ATO, CentreLink etc.

Many have departments and staff dedicated to assisting with deceased estates. We always found them exceptionally understanding and helpful. They do require certified copies of relevant documents and to verify your ID, in particular of the executor. There are as appropriate discretionary limits for values above which some will insist on a Grant of Probate or LOA in lieu of a certified copy of the will. The greater the value the more likely.

@whbaird has done well to sort most requirements during Covid in Victoria.

In general for the ATO, - I’d start with the link per

Note:
Our personal experience with the ATO, deceased estates, share registries and franking credits has been only positive. The ATO did not request a copy of probate or a letter of administration despite some rather complex tax issues in both recent examples. With exceptions of physically signing witnessed documents 99% can be done without face to face contact.

We have been able to rely on the personal records of the individuals to complete any outstanding tax requirements. IE no need to access the ATO portal. In practice the need to have a TFN for the estate, or registration for GST, EG for a personal business may precede by many months any Grant of Probate or Letters of Administration, given the legal considerations. The legal costs involved are also not trivial as @whbaird pointed out.

We have required probate in one instance. It was specific to one aspect of property of significant value and held in an interstate registry. All other matters in the estate were dealt with as they arose and independent of the grant. It is a state jurisdiction thing, and no doubt also a Commonwealth v State.

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@whbaird sorry to hear of your loss, unfortunately the last thing anyone needs when grieving is to wade through seemingly endless administrivia. Tax law has been an increasing nightmare and it’s apparently near impossible to fix it despite the challenges it represents. I suspect that making changes is like managing a very large house of cards with multiple extensions and powerful tenants but it remains on the radar.

@person let’s not get stuck into the ‘jumped up bureaucrats’ too fast, like Police they only administer the legislation not make it and usually do a near impossible job under onerous conditions of poor training and totally inadequate staffing levels. They are public servants directed by our elected representatives and if the legislation wasn’t so bearish it’d be easier to administer, so if anything it’s the politicians who preside over the situation that should be held to account. Most people only come up against it when there’s some issue so again it stands that the bureaucrats primarily deal with people who are already stressed thus making their job even more difficult. Unfortunately Ministers of all persuasions react badly/end careers when a bureaucrat speaks truth to power so often the communication is all one way and the bureaucrat is in ‘listen mode’. For example it’s unheard of for a bureaucrat to tell a Minister they need more staff, successive governments have non-negotiably reduced the size the public sector since it became trendy to do so in the early 90s despite the reductions commensurately reducing the quality of service to the point where the service offered…isn’t really one at all.

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I just went through all this. Although you can no longer access MyGov there is a very helpful section on the ATO website as to what to do and I called someone at the ATO. There is an online form to apply for access to the rollover tax details that will have all franking credits and interest.this was all sent to me so I could prepare the tax return. No issue. I do agree a good tip would be to print out everything on MyGov before you send death certificate to ATO.

Probate (in Qld anyway) is required by the Share registries Commsec, and Nabtrade to transfer shares into your name and also if there are assets in the bank say of more than $50,000.

In a simple estate, probate is easily done by completing forms provided on the courts website. I did my own. If you have a computer, tablet, mobile phone and access to a printer, a lawyer is not required. You will need the services of a justice of the peace for witnessing documents.

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It pays to contact each registry and also check on line. The requirements can vary depending on various details …

Commsec generally have a $50,000 nominal value and will accept a certified copy of the will, death certificate etc for a lesser value of share holdings.
EG https://www.commsec.com.au/support/frequently-asked-questions/estatemanagement.html

There may also be exceptions, with each registry having some discretion. EG where all transfers are to a sole surviving partner. It pays to ask.

Assume by simple, that definition includes a will that is not likely to be contested or have outstanding claims against it? Assets may be just a property a few shares and a bank account. It is no longer simple if such claims are made before or during the application for probate.

Knowing the recent and sometimes the previous history in business dealings as well as intimate detail may cause pause for thought.

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Yes it was both share registries that required probate. I understood with CommSec as value was over $50,000. NabTrade had way more hoops to jump through even with probate and a simple will with me as sole beneficiary.
The ATO was much easier.
My issues still ongoing are with US banks as my husband was an American citizen. A morass of bureaucracy I have thankfully never encountered here. In Qld the CBA were so incredibly helpful and facilitative.
I have a series of ridiculous snail mail letters from Wells Fargo that would be great for a comedy series because no one would believe it’s true.

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Any time an estate is trans border it becomes challenging very quickly if accounts and assets have not been styled in joint names with rights of survivorship. An American with an Australian partner living in America, who died there, would have similar if not more entertaining experiences dealing with any decease’s assets in our system.

Americans (as I have posted numerous times) are also special in that they are legally obligated to file US taxes forever; Eritrea I believe is the only other country that subjects their nationals to that long reach. The relevant US laws date to the US Civil War and FATCA is recent in this century whereby the US has coerced the world to report US citizens’ income to the IRS - hence the tax residency question any time a new financial account is opened.

They have $USD1.5 trillion is deposits and are the 3rd largest US bank. They got caught up like our banks with fake accounts, money laundering, and so on and paid a $USD3 billion penalty. Rating sites generally give them very ordinary ‘marks’ for customer service, similar to most banks that are expeditiously automating and making everything self service and coercing customers to become their own CSO’s. Sound familiar just to a different scale?

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Thanks everybody. It was all very helpful. I have meanwhile sorted it all out. My husband never went online. I did it for him and therefore I knew all his tax details. All these secrecy provisions seem to be dictated by laws that many ordinary people do not want. My husband was very hard of hearing. While he was alive, I rang the Tax Office for him. He told them that they should discuss things with me, but this also was againt their secrecy provisions. It has all become unnecessarily difficult. The people, who want to do the wrong thing, do it anyhow, but why punish everybody?

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There seems something missing. For example an accountant or representative can be given full access to a persons tax records. The ATO advice is at the following, and the pages it links to.

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It isn’t secrecy provisions, but providing protection against the disclosing of information to a person who legally may not be entitled to such information. If one has a legal instrument (such as a power of attorney), then this provides the necessary power to act on and behalf of another individual.

There are such requirements to protect everyone from unauthorised access to information that others may have. If such protections were not in place, it could be possible that any Jane or John Citizen could request and obtain information about others. This is something none of us would want.

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