When someone has passed away, it can be several months before the assets are distributed to the beneficiaries. The process of administering an estate is often longer than the beneficiaries may realise. For this reason, when we are notifying beneficiaries of their entitlements under a Will, we advise that they do not spend their inheritance monies as it could be some time before the funds and/or property are actually received.
The time it takes to administer an estate, is dependant on many variables, including:
- Whether a Grant of Probate is required;
- The number of asset holders and/or creditors; and
- The overall complexity of the estate.
If a Grant of Probate is required, then the executors or their legal representation, are required to ascertain the accurate values of the estate assets and liabilities in order to complete the necessary Court documents. Therefore, the first step is to contact each individual asset holder, (e.g., Banking institutions, Superannuation Funds etc) and obtain this information. It can take a number of weeks to receive this information from the asset holders.
The above process cannot occur until a Death Certificate has been issued. This can take a few weeks to be received by the executor, after a person has died.
Once the Application has been prepared, it cannot be lodged until the intention to obtain a Grant of Probate has been advertised on the Supreme Court website, for 14 clear days.
After the Application has been filed, the Court may take a further 2-3 weeks to process the Probate Application.
Once the Court have granted Probate, the “Administration Phase” commences. There are a number of factors that can affect the time it takes to administer the estate, including but not limited to:
- If there is real estate that needs to be sold;
- If there are shares to be sold (the market playing a large role in how quickly this can occur);
- How many matters the banks or other asset holders have to process;
- Whether there is a death benefit payable from a Superannuation Fund;
- Personal and/or estate tax returns may need to be completed, which have to be done at the end of the financial year; or
- There may be other unknown assets or liabilities that emerge during this stage.
The executor of the estate can complete interim distributions of funds, depending on the size of the estate and then a final distribution once all assets are finalised.
Finally, the most important point when considering how long it will take for beneficiaries to receive their benefit from a Will, is the 6-month claim period.
Under the Administration and Probate Act there is a period of 6 months from the date of the Grant of Probate (or Letters of Administration) in which claims can be made on an Estate.
We counsel our clients to wait this 6-month period before completing distributions to beneficiaries. If the executors decide that there is minimal risk of claims, then they can instruct us to proceed at their own risk.
Overall, the process of administering an Estate is often longer than beneficiaries may realise. It may take months before an Estate can be fully administered and can take even longer for more complex estates.