How to Distribute a Deceased Estate in Australia

Have a question about this? Ask the Guide → the chat widget at the bottom-right of this page can answer it. Reading time: 8 minutes | The Executor’s Guide — Plain English. Step by step. Written for the person who just found out.

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Distribution is the final stage of estate administration — but it is also the stage where executors most commonly make mistakes that create personal liability. This guide covers the rules for distributing an estate correctly, the order you must follow, and what you need before you can legally distribute.

What Must Happen Before You Distribute

You cannot distribute the estate until all of the following are complete:

• Grant of Probate (or Letters of Administration) has been obtained
• All assets have been collected into the estate account
• All debts have been identified and paid in full
• All tax returns have been lodged (date-of-death return and any trust tax returns)
• ATO clearance certificate has been received
• The statutory period for creditor claims has passed (varies by state — generally 6 months from grant of probate)
• No family provision claims are pending or threatened

Distributing before any of these conditions are met creates personal liability for the executor. If creditors cannot be paid after premature distribution because beneficiaries have spent the money, the executor may be personally required to make good the shortfall.

The Order of Distribution

Debts and expenses are always paid before beneficiaries receive anything. The legally required payment order is:

• 1. Funeral and testamentary expenses — funeral costs, probate fees, executor’s reasonable out-of-pocket expenses, solicitor fees for estate administration
• 2. Secured debts — mortgage (if property is being sold), hire purchase over specific assets
• 3. Unsecured debts — credit cards, personal loans, ATO debt, Centrelink overpayments, utility arrears, any other creditor
• 4. Specific gifts — named assets left to named people in the will (a specific ring to a specific person; a car to a specific child)
• 5. Residue — everything remaining, distributed to residuary beneficiaries according to their specified shares

Specific Gifts

A specific gift is a named asset left to a named person — “my 1967 Holden to my son James” or “my engagement ring to my daughter Sarah.” Specific gifts are distributed exactly as directed. If the specific asset no longer exists or was sold during administration, the gift generally fails (the beneficiary receives nothing in its place) unless the will provides otherwise.

If debts cannot be paid from the residue alone, specific gifts may need to be used to meet those debts — a process called “abatement.” Seek legal advice if this situation arises.

Residuary Gifts

The residue is everything left after all expenses, debts, and specific gifts are satisfied. The will specifies how the residue is divided — “equally between my three children” or “75% to my spouse and 25% to charity X.”

If a residuary beneficiary predeceased the will-maker and the will does not specify what happens in that event, their share typically lapses back into the residue and is divided among remaining residuary beneficiaries — unless they left children, in which case some states allow those children to take the deceased beneficiary’s share (check your state’s legislation or seek advice).

How to Actually Transfer Assets

Cash distributions: Transfer directly from the estate bank account to each beneficiary’s nominated account. Keep records of every transfer with date, amount, and purpose.

Real property (houses, land): Property cannot simply be handed over — ownership must be formally transferred via the state’s land titles registry using a Transfer of Land (or equivalent) document executed by the executor and lodged with the registry. Most executors engage a solicitor or conveyancer for this step. Stamp duty may apply in some states on certain transfers.

Shares and investments: Each share registry or fund manager has its own transfer process. Using the Grant of Probate and a Transmission Application, shares are transferred into the beneficiary’s own name (or sold and proceeds transferred as cash).

Vehicles: Transfer of registration in each state requires the executor to sign a vehicle transfer form and the beneficiary to register the transfer at the relevant transport authority.

Personal effects: Personal property (furniture, jewellery, collectibles) is transferred by physical delivery with a signed receipt. Keep written records of what was delivered to whom.

Getting Receipts

Obtain a signed receipt from every beneficiary confirming they have received their full entitlement under the estate. This receipt should state: the beneficiary’s name; what they received (specific description); that they confirm this represents their full entitlement; and their signature and date.

Without signed receipts, a beneficiary can later claim they did not receive their entitlement — even years later. Do not skip this step.

The Final Estate Account

Before or alongside distribution, prepare and provide to all residuary beneficiaries a final estate account showing: all assets collected and their values; all income received during administration; all expenses and debts paid; all distributions made; and the final balance confirming the estate is fully administered.

Beneficiaries are entitled to request this account and to inspect the supporting records. Keep copies of everything for at least six years from the date of final distribution.

Closing the Estate

Once all distributions are made and receipts collected: close the estate bank account; file all estate records; confirm with the ATO that all obligations are discharged. The administration is complete. Your role as executor is finished.

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The Executor’s Guide provides general information about estate administration in Australia. It is not legal advice. Distribution is the stage where executor liability is highest — if you have any uncertainty about the correct approach, seek legal advice before distributing.

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Related guides

• What to Do When Someone Dies in Australia
• What Is an Executor?
• Executor Duties in Australia: The Complete Legal Guide
• Do I Need Probate? A Plain-English Guide