So, you have been named as a beneficiary in a loved one’s Will who has recently died, or you are entitled to receive a share of the estate pursuant to the rules of intestacy. What happens now? How long will it take and what are your rights?
If the deceased person owned land in New South Wales (which was not held as joint tenants with another person) or owned assets in their sole name over a certain value, a grant of Probate or Letters of Administration (where there was no Will) will need to be obtained from the Supreme Court of NSW. The application is made by either the Executor(s) named in the Will or the deceased’s closest living relative (e.g. spouse, children). In accordance with the Supreme Court Rules 1970 (NSW), an application for Probate is to be filed within 6 months of the date of death. Otherwise, the reason for the delay needs to be explained to the Court.
The timeframe for applying for a grant of Probate after the filing of the application can be anywhere from two weeks to two months. The time depends on a couple of factors, including the workload of the Court at the relevant time (the timeframes are updated regularly on the Supreme Court of NSW website), whether there is any missing or ambiguous information in the initial application (for which a requisition will be issued to the Executor(s) by the Court) and whether there have been any claims made regarding the validity of the Will (see our publication titled ‘Challenging a Will’ for further information).
Once Probate has been granted by the Supreme Court of NSW, it is the responsibility of the Executor to collect the assets into the estate, pay the liabilities, pay the legacies/distribute the specific gifts, complete the necessary tax returns for the deceased (to date of death) and the estate (from the date of death to shortly prior to the final distribution), and finally to distribute the remaining assets to the residuary beneficiaries named in the Will.
It is unlikely that Executors will make any distributions from an estate prior to the 6 month anniversary of the deceased’s death. If there is a possibility of any claims being made on the estate pursuant to Chapter 3 of the Succession Act 2006 (NSW) (also known as family provision claims), Executors may refrain from making any distributions from the estate prior to the 12 month anniversary of the deceased’s death.
It is generally accepted that cash legacies are to be paid within 12 months of the deceased’s death. If they are not paid within this time, interest may be payable on these amounts, except in circumstances where there has been a claim made as to the validity of the Will or where a family provision claim has been made against the estate or some other circumstance where it was not reasonable to pay the legacies in that timeframe.
Executors will often distribute the residuary estate in stages, which may include transfer of assets directly to the beneficiaries (also known as a transfer ‘in specie’) and multiple cash distributions. The length of time for making distributions varies greatly, is unique in every estate and will largely depend on factors such as the size of the estate, the complexity of the Will, the number and location of the beneficiaries, and the nature of the assets. Timeframes can also be extended if there are questions surrounding the interpretation of the Will or if there are any claims made on the estate. In our experience, even the most simple of estates can take at least 12 months to fully distribute and finalise with the more complex estates taking many years. There may also be tax and stamp duty advantages to delaying the finalisation of the administration of the estate.