Introduction

When a person dies, an executor (also known as an administrator or legal personal representative) is appointed to administer the deceased estate. This includes responsibility for managing tax affairs.  The deceased estate may include money in bank accounts, real estate, shares and personal possessions as stated in the will. Some types of income that accrues to the estate after the date of death (such as interest, dividends and rent) will also form part of the deceased estate.  Some assets are not included in the deceased estate because the deceased person has made other arrangements to distribute them.

The period of administration begins at the date of death, and ends when the administration of the estate is complete. It usually involves the following steps:

1. Executor appointed by will, or administrator appointed by the court.
2. Probate applied for and granted by the court.
3. Assets vested in executor who administers estate
   1. date of death and trust tax return lodged
   2. initial stage – net income of estate is applied to reduce debts (including tax liabilities)
   3. intermediate stage – part of the net income of estate that is not required to pay debts may be paid to beneficiaries
   4. final stage – debts are paid or provided for in full and net income and assets of the estate are distributed to beneficiaries.

Best Practice

Given the above, 'best practice' would dictate that:

• The client's entity status is set to 'Deceased'

Should the client's category be updated?

Best practice dictates that the client category is used to manage segmentation rather than the client's status.  In the case of a deceased estate, the estate itself is likely to remain as an important recipient of your services (as will the executor), and this should be reflected via the category.

• Ensure other staff are advised and visibility of this circumstance is clear.  The use of client fields in the 'Client Focus Title', and 'Sticky Notes" will greatly assist.

The screen shot below highlights how key client fields should also be incorporated into Search results, again highlighting how important messages/information can be delivered.

• A new 'trust' entity is created - being "The Estate of..." (ie. the client type is set to 'Trust')

This step is important as some assets may not include in the deceased estate because the deceased person may have made other arrangements to distribute them.  For example, superannuation and life insurance payments may or may not form part of the deceased estate (If there are stipulated beneficiaries under the policies, the payments may go directly to the beneficiaries without going through the deceased estate). Also, assets that are jointly owned may or may not form part of the deceased estate depending on whether they are held under joint tenancy or tenancy-in-common.  It is therefore best that assets are transferred when appropriate.

• Separate the client & partner records using the Purge Partner Options (accessed from the Main page under the Key Details menu item).

• Obtain the original or certified copies of the Death Certificate and Will.
• If there is no Will, you may need to obtain a 'Letter of Administration' (granted by the Supreme Court), in lieu of a Will.
• Record the date of death in the sticky note.

Points of Interest

• Data feeds will continue to work if the datafeed is mapped to the correct entity. You will not be able to create a new datafeed if the status of the client is ‘Deceased’ as a datafeed will only match to client data if their status is not ‘Deceased’.
• It is good practice to update the fields; Salutation, Address Title and Marital Status to prevent the name of the deceased from potentially merging in documents.
• Remember to update Trustee/Member/Director details for the deceased’ other related entities.
• If the client (rather than the partner) is the deceased, the following items will disappear once the entity purge is complete and will need to be re-entered manually:
  • Review History
  • FDS/Opt-in Information