I still haven’t received a distribution from a deceased estate that I am entitled to, what can I do?
Pushing an executor to distribute
When a well drafted Will is put into place during a person’s life, that appoints a competent and trustworthy executor, the administration of that person’s estate can be relatively straightforward and quick. However, where this is not the case or external factors complicate the administration, such as a lazy executor, a complex estate or claims against the estate, beneficiaries may have to wait extended periods of time to receive assets, and assets of the estate, such as real estate, may sit stagnant rather than earning an income. If you are one of these beneficiaries, what can you do?
“Executor’s Year”
Before committing to taking action against an executor, it is important to understand what a reasonable amount of time constitutes for the administration of an estate. The “executor’s year” refers to the 12-month period following a person’s death, at the end of which, a grant of probate should have been applied for, and following another 12 months, the estate should have been fully administered. In Western Australia, the rule that the estate should be fully administered within one year is not formalised, however it is widely accepted. If the executor goes beyond this period without having made a distribution, you may consider the following options.
Requesting an interim distribution
If you are relying on the funds from an estate for pressing expenses and cannot afford to wait any longer for a final distribution, you can apply to the executor for an ‘interim distribution’. An interim distribution is given on the basis, that those funds will be deducted from the final amount you are entitled to. The New South Wales Supreme Court in Gonzalez v Claridades considered that where an executor:
- knows there are some distributions which can be made in accordance with the Will;
- knows there is no realistic prospect that the value of the estate will not be significantly diminished before a final distribution is made; and
- is not likely to complete the remaining tasks of administration soon;
an obligation on them may arise to make an interim distribution.
If you request an interim distribution, and your request is unjustly denied by the executor, you can apply to the Supreme Court, requesting they order the executor to grant an interim distribution.
Passing of Accounts
One of the most important duties of an executor is maintaining the financial records of the estate. This includes:
- Appreciation and depreciation of any assets that are making an income (e.g. real estate, shares, etc.);
- Income earned by estate assets (e.g. rent, dividends, interests, etc), and
- Expenses the executor has incurred in their administration of the estate and the maintenance of estate assets.
In circumstances where you as a beneficiary feel that the executor is not acting in your best interests and you have previously attempted to obtain this information from the executor, an application can be made to the Supreme Court for the executor to pass these accounts.
If the Executor fails to produce these accounts, you can apply to the Court to have them removed from their role. They may then be prevented from claiming reimbursement for expenses they have incurred but are unable to provide evidence of.
Removal of an executor by consent
Rather than going through the process of requesting the Supreme Court use their jurisdiction to remove the executor, it may be worth gently approaching the situation and requesting that the executor take it upon themselves to seek assistance or to relinquish their position. The Supreme Court may then appoint another person they see fit to be the administrator of the estate, often a beneficiary or a creditor of the estate.
Forcible removal of an executor
The most efficient way to remove an executor in Western Australia is to apply to the Supreme Court requesting it uses its inherent power over probate matters. For the Supreme Court to exercise this power to revoke the grant of probate and to grant letters of administration to another person, they must be satisfied that it will benefit the due and proper administration of the estate in the interests of the beneficiaries, this includes matters where the executor can be described as ‘abortive’, ‘inefficient’, ‘useless’ or ‘ineffectual’.
Loss of income as a result of negligence by executor
One of the duties of an executor is to ensure that if the estate is not ready to be distributed, that they earn income for the benefit of the beneficiary. For estate funds, this may involve keeping them in an interest-bearing account and for assets, such as real estate, this may involve renting them out. Where the executor fails in fulfilling this duty, especially when there has been a significant delay in the distribution of the estate, beneficiaries may have a cause of action against the executor to recoup the funds that the estate would have otherwise made, had the executor acted properly.
Interest
Pursuant to s143A of the Administration Act if the executor does not distribute the estate within 1 year of receiving the grant of probate or they do not apply for a grant in a timely manner, interest at the rate of 5% applies to the beneficiary’s entitlement. For example, if a beneficiary is entitled to a $250,000 interest in the estate and the executor is 2 years late in their distribution of the estate, the beneficiary is entitled to the $250,000 plus $25,625 interest.
Conclusion
The loss of a loved one is a complex and stressful time that does not need further stress added by an executor who has not upheld their legal obligations to the beneficiaries. If you are a beneficiary who is quickly approaching the end of the “executor’s year” or has already passed it, consider contacting Lynn and Brown Lawyers so that our experienced estates team can assist you in receiving your entitlements.
About the Authors: This article has been co-authored by Sam Richardson and Steven Brown. Sam undertook his studies at Murdoch University fresh out of high school in 2020 at 17 years old, keen to pursue and interesting and challenging career. Since November of 2022, he has been with Lynn and Brown as a clerk but following the conclusion of his studies, he will be staying with our Wills and Estates team as a Law Graduate. Steven is a Perth lawyer and director, and has over 20 years’ experience in legal practice and practices in commercial law, dispute resolution and estate planning.
