The Administration of Estate and Grant of Probate in Cyprus – the procedure and why you should obtain legal advice and assistance
A very delicate matter that needs to be dealt with high proficiency and discretion, is the procedure of handling and distributing the estate of a loved-one that has passed away.
Even the administrative process itself is not that simple and it is vital for anyone that decides to commence such procedure to obtain legal advice and ideally to appoint a lawyer to handle all the legal work.
Commencing the Procedure – Initial Factors
At first instance, the most important factor to be considered is whether somebody has passed away having a valid Will or whether that person has passed away without a Will – intestate. This distinguishes the procedure to be followed, which is either a “Probate Procedure” in case there is a Will or an “Administration of estate” in case there is no Will.
This also determines how the estate of the deceased will be distributed as (a) in case of a Probate Procedure the estate will be distributed according to the wishes of the testator as these are described in his last Will and (b) in case of an Administration the estate will be distributed to the rightful heirs and according to the share they are allowed to receive as such is defined under the Wills and Succession Law Cap 195.
It should be clarified that the above-mentioned Law, Cap 195, is not of relevance only in cases of intestacy, as the Law provides several conditions that need to be met with before any Will can be considered as “legal and valid” and also imposes some forced heirship rules that must be taken in mind when executing the Will.
Filing a Court Application at the Court
In case there is a Will, a person is normally nominated under the Will by the testator to act and to be appointed as the Executor of the estate. The nominated Executor of the estate is the appropriate person to commence the Probate Procedure and has the obligation to fulfil and execute the wishes of the testator. The nominated Executor needs to file a Probate Application at the Court so as a Court Order is issued which legally appoints him as the “Executor”.
In case of intestacy, all rightful and legal heirs must agree and provide their consent for a person to be appointed as the Administrator of the estate of the deceased. This person needs to file an Administration procedure at the Court so as the Court grants him “letters of Administration” via a Court Order and this person to become the Administrator of the estate.
The Inventory of Assets
The Executor and/or the Administrator should conduct all relevant searches and obtain all necessary information to have a full and clear image of all the assets that the deceased had in his name at the time of his death, as once again, it is a requirement under the Law to file an Inventory of Assets at the Court which is accompanied by an Affidavit sworn by the Executor/Administrator that they have revealed and disclosed all the assets of the deceased.
The final Tax Clearance Certificate
The moment a Probate and/or an Administration procedure is filed at the Court, the Executor and/or the Administrator must inform the Inland Revenue Department. The Inland Revenue Department will then open a file and basically will investigate whether the deceased owes any tax or whether the deceased was liable to any tax at all. The first thing that the Inland Revenue Department will query is: was this person tax registered (a tax resident) in Cyprus or was this person tax registered in another country?
If the deceased was tax resident in Cyprus, the Inland Revenue Department will request for Income Tax Declarations to be filed, if these have not been filed by the deceased before the time of his death, for at least 3 to 6 years up until the date of death.
If the deceased was tax resident in another country, the Inland Revenue Department will request a Certificate issued by the Relevant Authority of that country, confirming that this person was a tax resident in that country, for the past 3 to 6 years up until the date of death. This is known as “a certificate of fiscal residence”.
The Inland Revenue Department will then issue a final Tax Clearance for the estate of the deceased and separate tax clearance certificates for each asset that the deceased had in his name at the time of his death.
The Distribution of the Estate and submitting Final Accounts at the Court
Once the above Tax Clearances are issued, the Executor and/or the Administrator can proceed with distributing the estate of the deceased to the beneficiaries of the Will and/or to the rightful heirs of the estate. It is extremely important that before the process of distribution of the estate begins, all debts, expenses and fees of the deceased and of the estate are settled and paid from the estate provided that there are enough funds in the estate to cover such. It is possible that the funds of the estate are not sufficient to cover the said debts and in such case the Executor and/or the Administrator has the right to sell and convert the estate into money or to consider taking any other steps so as to make sure that the debts and other expenses are paid.
Only then, will the Executor and/or the Administrator proceed with distributing the estate and transfer the assets of the deceased to the beneficiaries according to the share they are allowed to receive.
The last part of a Probate and/or of an Administration procedure, is to file Final Accounts at the Court. These Final Accounts will be checked and approved by the Court Registrar and they need to specify in detail all the steps that the Executor and/or the Administrator has taken. It is very important to include in the final accounts duly signed declarations by all the beneficiaries confirming that they have received their share of the estate. The Court Registrar will approve the Final Accounts and finally close the procedure, only if all legal requirements are met with.
Clearly the above procedure is not only complicated but also demands that some very strict legal rules are followed. The procedure needs to be dealt and handled by a professional who not only knows how to apply the law but also liaises with the Inland Revenue Department and the Court Registrar so that the process runs as smoothly and as quickly as possible.
An article written by
Andrea Anthimou, Advocate
of Andreas Demetriades & Co LLC, Advocates & Legal Consultants