Time limit for executor to distribute estate Victoria

Following the death of an individual, their estate (assets, possessions and property) needs to be managed and dealt with.

The executor is the person who may accept the responsibility of managing the estate and carrying out the wishes of the deceased individual.

There may be one or multiple executors, and they may be named in the deceased’s Will or, if there is no Will or no appointment made, then a court-appointed administrator may take on the responsibilities of an executor. Expenses incurred by the executor in the course of administration may be covered and reimbursed by the estate.

Part of the executor’s role include:

• applying for probate
• arranging the funeral
• collecting and valuing the deceased’s assets
• repaying debts, including any tax liability, owed by the deceased

Another key role of the executor is to ensure the estate is distributed in accordance with deceased’s wishes, as stated in their Will. In order to deal with and distribute the estate, the executor must apply for and receive a grant of probate from the Supreme Court.
 

What is the six-month rule for making claims against the estate?

Once probate has been granted, the executor is able to distribute the remainder of the estate (once liabilities and debts have been accounted for) amongst the beneficiaries of the Will.

Claims can also be made against the deceased’s estate. According to section 99 of the Administration and Probate Act 1958 (Vic), any claims against the estate or contests of the Will must be made within the six-month period following the date probate is granted. This is commonly referred to as ‘the six-month rule’.

During this six-month period, the executor may continue to deal with the estate, as per their role. However, it is important to note the potential legal risks they may be exposed to.
 

What risks are associated with early distribution?

Depending on the size and complexity of the estate, the time frame for distribution will vary. It can take around two to three months to gather and prepare the documentation and materials required to apply for probate. The executor may feel pressure to distribute the estate during the six-month period following the grant of probate if beneficiaries of the Will expect payment of their entitlements to be made immediately or quickly.

However, if the estate has been distributed early (i.e. during the six-month period) and a claim against the estate is made and is successful, the executor may be personally liable for any deficit in the estate. The executor may have difficulty getting funds back from beneficiaries once the funds have been distributed.

Due to the operation of the six-month rule, it would be prudent for executors to proceed with caution and not fully distribute estates within six-months from the grant of probate.
 

What should you do if you are named as an executor?

An executor should seek legal advice to help with:

• Understanding their role as the executor
• Performing their duties
• Dealing with any complexities associated with the estate

If you are nominated as the executor of a Will and thinking of accepting the role, to make sure you understand your responsibilities and other potential risks, please contact me at our office on (03) 9480 1155.

Grant Mackenzie

Grant has been a partner at Phillips & Wilkins since 1990 having joined the firm in 1983. He is a member of the Law Institute of Victoria Elder Law Committee. Learn more about Grant's legal experience.

You may be concerned that an Executor of an estate that you are involved in is causing undue delay.  Stephanie Rendell, Associate Solicitor and Head of Wills & Estates at RNG Lawyers, explains how long it takes to act in an estate and what you can do when an Executor is taking too long. 

Beneficiaries and Executors of an estate are often surprised at how long it takes to obtain a Grant of Probate or Administration and then distribute the assets to the ultimate beneficiaries . 

Even in the most straightforward estates, it is not uncommon for it to take a couple of months from the date of death before an Application for a Grant of Probate or Administration can be completed. 

Once an Application is filed, the Grant is generally issued relatively quickly.

In a complicated estate, it is not uncommon for it to take many months to collate all the necessary information required to file the Application for the Grant. 

Once the Grant has been made, Executors are likely to be advised to withhold distribution of the Estate for 6 months. This is because any eligible person wishing to make a claim for Testator's Family Maintenance must do so within 6 months of the date of the Grant of Probate.  After the expiration of 6 months, the right to make such an application ceases unless the Court grants leave. 

An Executor may nonetheless be causing undue delay and there are some estates where the Executor really does take too long.  There are steps that can be taken when an Executor is not performing their role including obtaining a Court Order to have them removed as Executor in the most serious cases. 

It is often the case however that the issue can be resolved by communicating with the Executor (or the lawyers acting on behalf of the estate) to understand and perhaps even resolve the delay.  It might be that the Executor does not have the ability to take on the role and requires some support.  Alternatively, it may be that they are willing to step down from the role of Executor and/or Trustee subject to the terms of the Will (if there is a Will).  

RNG Lawyers has experience in acting for estates and also for beneficiaries that are concerned about the way that estates are being handled. We can advise you in detail about your rights.  We can also take action where necessary on your behalf including Court action to remove Executors in serious cases.

If you would like to speak with the RNG Lawyers Wills & Estates team, please do not hesitate to schedule an appointment 

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