V. Distribution of estate to the relevant parties
Before distribution of the estate can be made, the executor/administrator needs to arrange payment or make provisions for the payment of the deceased's debts, funeral and other expenses in relation to the estate.
Debts can be incurred both before and after the death of the deceased. For example, the deceased might have used his/her credit card to purchase goods and died before the balance becomes due. An example of a debt incurred after death is the management fee of a property that is owned by the deceased. All debts have to be ascertained and paid, or provisions for payment must be made, before the estate is distributed to the beneficiaries.
Before the abolition of estate duty, if the net value of the estate was over $7,500,000, estate duty was payable. The estate will also need to provide for Salaries Tax, Profits Tax and Property Tax due by the deceased up to the date of his/her death.
Other expenses to be paid out of the estate, apart from funeral expenses, include: the expenses incurred for obtaining legal advice, the costs and expenses incurred in the application for a Grant of Representation, and the Court fee.
- If the creditors fail to get back the money from the executor/administrator/beneficiary after the death of a person (i.e. the debtor), how can the creditors protect themselves and chase for repayment?
- The allocation of estate has been clearly set out in a Will. Can this prevent all the disputes which may come out during the distribution process?
- If the deceased made no Will, how can the relevant estate be distributed?