John Mann providing Q & A on 2GB discussing Unfair Wills & Estates - 21 August 2021

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CS – Chris Smith / JM – John Mann – C1,2,3, etc – Callers

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Read the transcript below:

CS       Now one of our listeners has emailed in and says my aunt passed away and she had rented out part of her house for many years. I believe my aunt hasn’t done any tax returns for some years and the tenant is still there and has a lease for another year, what can I do?

JM      Interesting question Chris. First of all the executor is bound by any legal document that the deceased was bound by, so in other words if the tenant has the lease for another 12 months, as long as they do what they’re supposed to do under the lease, there is nothing the executor can do about it, the lease will have to run its term. Now income tax matters are very serious concerns for executors, where there is a liability for income tax that arises before the person died, that is a debt of the estate, and that is something that the executor has to administer as they go along but where income is earned by the estate after the date of death and in this case the rent that’s going to come in since the aunt passed away, is the responsibility of the executor personally to deal with the income tax matters and if those are not dealt with by the executor, the executor then bears personal responsibility for those things, the amount of the tax and the payment of it and any penalties.

CS       Right and the ATO will come towards the executor of the estate for that money?

JM      Sometimes, it’s not always something you can rely on that the ATO will chase up, but if it’s a new tax return since the date of death it is very important that the executor does whatever tax returns are necessary, in other words to satisfy the tax liability because as I say they bear personal responsibility and if later on the tax office found out these things are happening then they have personal serious problems.

CS       Okay and further to that email, I know my aunt had a son who she has not spoken to for many years, he gets nothing under the will, what’s my position if he makes a claim?

JM      If he makes a claim Chris, the executor who comes to defend it the case and it’s their obligation to uphold what the terms of the will say. It’s not to say that necessarily they can’t on proper legal advice settle the claim and generally speaking these cases are settled and settlements are approved by the Court but what the executor must remember, where a person such as this is around and could potentially make a claim, they have a right to do so and they can bring that claim within 12 months of the date of death.

CS       Okay, comprehensive answers to the questions at hand. John enjoy your weekend.

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