126.96.36.199 Assessing interests in a deceased estate
This topic discusses:
- the provisions for assessing deceased estates
- when a person is able to receive their interest in an estate
- the effect of the interest on the allowable assets limit
- when a remainder interest is an assessable asset, and
- when deprivation provisions apply.
- received, OR
- able to be received.
If a person notifies that they have an interest in a deceased estate a delegate should obtain the following information:
- the extent and nature of the interest, AND
- the expected distribution date.
Act reference: SSAct section 1118(1) In calculating the value of …
As it can take some time to finalise an estate it is generally accepted that a person will be unable to receive their interest in a deceased estate for up to 12 months after the death of the testator. If the estate is finalised earlier than this the interest is assessed from the date it is received or able to be received.
If the estate has NOT been distributed 12 months after the death of the testator, the facts of the case should be considered to determine:
- what is preventing the estate being finalised, AND
- whether the reasons are within the person's control.
If a person has contributed to the delay, the interest is regarded as being available.
Example 1: If the person is NOT the executor AND the executor has discretionary power to distribute the estate, the person has no control over the delay. Accept that the person has NOT contributed to the delay and that the interest is NOT able to be received.
Example 2: If estate debts are yet to be paid accept that the interest is NOT able to be received.
Effect on allowable assets limit
If the expected value of the interest is likely to put a person's total assets ABOVE the allowable assets limit a delegate MUST:
- schedule a review for the date of distribution, AND
- advise the person that they must notify the department within 14 days of distribution.
A review and notification is also required if a person receives:
- income, OR
- an investment from a lump sum distribution.
If a remainder interest is returned to a person, this MAY be an assessable asset. Information on assessing a person's remainder interest is in 188.8.131.52.
Act reference: SSAct section 1118 Certain assets to be disregarded in calculating the value of a person's assets
Policy reference: SS Guide 184.108.40.206 General provisions for exempt assets
Deprivation provisions apply IF the person:
- waives their right to their interest in the deceased estate, OR
- directs the executor of the will to distribute their interest in the deceased estate to a third party, OR
- gives their interest in the deceased estate to a third party after the estate has been finalised.
Policy reference: SS Guide 4.1.5 Deprivation related to deceased estates, superannuation funds & separation