Asset and estate distribution can sometimes take months – if not years. The process can be complicated, lengthy and frustrating for many families (or loved ones of the deceased), especially if they’re a beneficiary of the deceased estate. If an executor is deemed ‘incompetent’, this can also extend the interim period between the Will-maker dying, and their estate being administered.
In this case, a beneficiary can consider requesting an interim distribution from the estate, which means they’ll receive part of the estate earlier than other beneficiaries (unless they, too, apply for interim distribution).
How long should it take for an estate to be wrapped up?
Generally, executors are responsible for wrapping up a deceased estate within a year. This year is formally known as ‘the executor’s year’, and is a way of encouraging executors to get their job done so as to not leave beneficiaries waiting for their inheritance. A quick game’s a good game, right?
However, delays can occur for a range of reasons, including if the Will is being questioned or contested. When a delay occurs, the executor has to complete a range of tasks, some of which might include:
- Locating and gathering all of the deceased person’s assets
- Listing and discharging the estate’s liabilities (including taxes, bills, and other payments)
- Keeping accounts and records of all dealings within the estate
- Defending the estate from litigations
- Tracking down all beneficiaries and planning to distribute (and actually distributing) the estate accordingly
How does a beneficiary request interim disbursement from an estate?
The beneficiary (or multiple beneficiaries) can request that the executor distributes some of the deceased’s assets at an earlier date than planned. Usually only a small amount of the estate will be distributed early, so the beneficiary generally won’t receive their entire entitlement until the rest of the estate is distributed.
It’s also worth noting that the executor will only make interim distributions when there’s no chance of there being a shortfall in funds for the rest of the estate administration (ie. They need to know, without a doubt, that there’s enough money for all beneficiaries to receive their entitled share, and that there’s enough money to pay off any of the deceased’s liabilities).
Who is entitled to an interim disbursement?
Anyone who stands to inherit from the estate, really. But typically an interim disbursement would only occur if the beneficiary requires urgent financial assistance (for example, to pay their rent, purchase a house, buy food, or pay their bills). It will likely also be necessary to make an interim distribution if the beneficiary was financially-dependent on the deceased (ie. A child of the deceased or their spouse).
I’ve heard that, as a beneficiary who is dependent on the deceased, I’m entitled to some of my share of the estate within 30 days. Is this true?
Yes, it is. According to the Wills Act (2000), an executor may be required to make maintenance distributions to the dependents of the deceased within 30 days. The amount distributed is taken directly from the estate, from the beneficiary’s share of the estate.
Are there any risks associated with interim distributions of an estate?
Yep, and it’s important for the executor to understand these risks – because they’ll be the one to blame if things go wrong or if they distribute assets incorrectly. If property or money, for example, is given to a beneficiary and that beneficiary wasn’t entitled to those assets (or received more than they were entitled), the executor will be personally liable for that error.
So, if you’re an executor of an estate, it’s worth considering if it might be worth waiting to distribute assets so as to protect yourself from making rash decisions and consequential mistakes. And, if you choose to distribute some assets in the interim, it’s certainly worth formally communicating this to other beneficiaries and asking them to provide written consent stating that they’re okay with some assets being distributed to other beneficiaries earlier than planned.
While an interim distribution of an estate sounds nerve wracking and risky, you can rest assured that – unless an estate is complex – an interim distribution isn’t typically required, as the estate is often divided relatively efficiently. Everyone wants their inheritance, after all, so if everything goes according to plan, you’ll likely receive the deceased’s bequests in no time.
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Disclaimer: The content of this blog is intended to provide a general guide to the subject matter. This blog should not be relied upon as legal, financial, accounting or tax advice.