The process of obtaining a grant of probate can in itself be a very stressful time for executors. However, once the grant is obtained, there is further administration needed to deal with all of the assets in an estate. Even where there is a simple estate with few assets, this may take longer than expected, and beneficiaries would often like to know how quickly funds can be distributed.
Under section 44 Administration of Estates Act 1925, executors are generally given one year to obtain the grant of probate and to distribute the estate. During this time, executors cannot be forced to distribute assets; the time is given to allow them to properly administer the estate, and to avoid liability for the estate and for themselves. There are however a number of issues that may mean that the estate would take longer than a year to distribute.
Tax liability
A grant of probate can only be obtained once inheritance tax is properly dealt with, and as such (and specifically with large or complex estates) this in itself could take up a large portion of the executors’ year, but must be paid within 6 months from the date of death (with some exceptions).
Size and complexity of the estate
Once the grant of probate has been obtained, the executors must then administer the estate and distribute funds. As you can imagine, and depending on the size and complexity of the estate, this time frame could range from a couple of months to a number of years. The executors must settle any debts of the estate, make any inheritance tax, income tax or capital gains tax adjustments, and in some cases sell assets (for example land) in order to then distribute the funds due to the beneficiaries.
Locating missing beneficiaries
In addition to this, there may also be complications in locating beneficiaries of an estate. In this situation, executors must try to find the beneficiaries in order to avoid liability – the executors can be held personally liable for any breach of duty (or “devastavit”) where they have caused a loss to the estate, or failed to pay those that are entitled to the assets of an estate.
To protect against this, specifically in terms of failing to pay those entitled to certain assets, executors can protect themselves by keeping the money aside for a beneficiary that they are not able to locate. The executors would also have other options, such as taking out an indemnity or insurance, or obtaining a Benjamin order from the court to allow them to distribute the assets. Understandably, all of these options may take time to complete, and may add to the time before funds can be distributed.
Unknown beneficiaries
There are also cases where there may be unknown beneficiaries – for example, where someone leaves their estate to “such of my children” rather than to named beneficiaries. As such, there is a statutory time period for executors to protect themselves against any possible claims. As per section 27 Trustee Act 1925, executors must advertise for unknown beneficiaries for two months to avoid any future liability.
Claims under the Inheritance (Provision for Family and Dependents) Act 1975
Furthermore, any claims under the Inheritance (Provision for Family and Dependents) Act 1975 may further delay the distribution of funds. Any claims made under this Act may not be brought more than 6 months after the grant of probate is issued without permission from the Court, and executors, especially those on notice of a claim under this Act, may not distribute the assets within this time. Claimants under the Act may also issue their claim, say at the end of the 6 month period, and would still rightfully have 4 months to serve it. As such, the executors may wait as long as 10 months from the grant of probate to distribute any funds.
Beneficiaries under the age of 18
Finally, many executors may have to consider beneficiaries that are under the age of 18. In these cases, funds cannot be distributed until the child turns 18, in which case it may be years before the funds can be fully distributed.
Although there are many instances in which the executors of an estate will need to delay the distribution of funds, as outlined above, it must be noted that they should not unnecessarily delay any distributions at any point. Interest is generally payable on pecuniary legacies that remain unpaid after one year, and executors should not put themselves in a position where they could face criticism for their actions.
In conclusion, it is clear that although the executors generally have a year to administer an estate, there is not any kind of clear-cut deadline for funds to be distributed. This can range from a few months for a very simple estate, to a number of years where there are unknown or untraceable beneficiaries and/or significant assets to deal with.
