New Act to simplify probate, administration of estates
Greater efficiency in the administration of estates may be achieved through the Probate and Administration of Estates Act, which will impact many Bahamians and has implications for the offshore financial sector too.
The Act came into effect June 1, creating a single statute that consolidates previous laws on the obtaining of grants for representation and the administration of estates in The Bahamas. Higgs & Johnson partner Dr. Earl Cash told Guardian Business yesterday that the Act is aimed at improving a probate system long identified as wanting.
“We’ve been trying for quite a while to figure out how to speed up the process and to make it more friendly, more manageable, so to speak,” Cash said. “Many of the jurisdictions have a faster process and a less cumbersome one so we were trying to see how we could do that too and take care of a lot of the difficulties we have experienced over the years.”
The relatives of Bahamians who die with ‘small estates’ – those with a total value under $10,000 – could see an immediate benefit from the Act. Changes to the process should make it shorter, and provisions like the removal of stamp duty mean that more of the deceased person’s assets may be transferred to survivors. For such small estates, the probate process often discouraged survivors from even pursing the probate of the estate.
“In many cases the relatives don’t even bother. They say ‘Spend money to get what? It doesn’t make much sense’,” Cash said.
“In any event, that process can be facilitated by virtue of having the process be shorter because the registrar has the discretion to not require the use of process as you would in the probating, and then of course there is no stamp duty on the application – because it’s a small estate and that’s waived.”
Under the Act, an applicant for a grant of representation on a small estate would only need to file a petition and produce evidence of the death of the deceased. The ‘grant of representation’ would make an individual the executor/executrix of an estate where there was a will, or an administrator/administratrix of an estate without a will. The applicant would subsequently be interviewed by the Registrar who would let the him/her know what other documents would be required for the application, and who holds the discretion to reduce the usual requirements.
The Act also removes a vexing conundrum under previous laws. Before, an applicant had to file the value of the personal estate as a part of his application. But Bahamian banking privacy laws often precluded applicants from gaining access to bank account information; banks would not disclose account information until the applicant had the court’s appointment.
Cash said it often led to survivors, with their own ideas about what such balances should be, distrusting the personal representative, who would understandably be off with estimations of bank balances from time to time.
Under the Act, however, the personal representative will have up sis months if the deceased’s estate is in New Providence, nine months if in the Family Islands. The provision will also impact on the estates of foreigners under Bahamian jurisdiction.
The Act also establishes a depository for Wills. For a fee, a Bahamian will be able to place wills with the registrar of the Supreme Court for safe-keeping. While it may provide protection for anyone storing his Will under the bed, Cash cautioned that subsequent Wills may be created by the testator, and the last Will, not the last registered Will, would apply.
The Act also codifies the practice of many local retail banks to pay a small amount of funds to someone who appears to be the manager of and estate once he provides satisfactory evidence. Bank managers can pay up to $2,500 in such cases — an amount which can help with funeral arrangements, for example. Provisions also exist in the Act for employers to pay funds due to a deceased employee to a beneficiary designated in writing under oath by the deceased employee.