The most common form of litigation in relation to deceased estates is when a spouse, child or financial dependent of a deceased person makes a Family Provision Application (FPA), a claim against the estate because the applicant feels they have not been adequately provided for within the will.
Queensland’s Succession Act 1981 sets out the statutory time limits in which an FPA can be made. Specifically, a person must give the Executor notice of an intention to bring a claim against an estate within six months from the date of death, and the FPA must be filed with the court within nine months of the death.
This raises the question of whether an Executor is entitled to immediately distribute the estate to beneficiaries once the nine-month time limit passes and no notice of an intention to bring an FPA has been received in writing. Our expert wills and estates lawyers at Delaney & Delaney can help answer this question.
What happens where no notice of intention to claim is made?
Under section 44 of the Succession Act 1981 (Qld), an Executor will not be personally liable for claims regarding distribution of the estate if:
- The distribution was properly made (i.e. it is correct according to the will);
- The distribution was made no earlier than six months after the deceased’s death, and the executor did not receive notice of an FPA application (or intended application) against the estate; and
- if notice of an application was received, the Executor distributed the estate no earlier than nine months after the deceased’s death (unless the Executor received written notice that the application had commenced in court).
To clarify, an Executor may lawfully distribute the estate any time after the deceased’s death but if they do so before the time limits outlined above, they will not be afforded the Act’s protection from liability.
Applications can be made out-of-time – more than nine months after the date of death – but the onus is on the applicant to establish the reasons for extending the time limit. Before allowing the application to proceed the court will consider whether there is an adequate explanation for the delay, whether the beneficiaries are prejudiced and whether the estate remains intact.
In Re Faulkner [1999] 2 Qd R 49, notice of an intended FPA was given within the six-month time limit but the Executors then distributed the estate immediately after nine months but before the matter had been resolved. McGill SD DCJ found that where notice of a Family Provision Application has been given, “it must be at least fairly arguable that a distribution as soon as the nine month period has expired is not one ‘properly made’, so as to protect an executor from personal liability.” As a result the Executors’ distributions were set aside and property was returned to the estate by order of the court.
This case demonstrates that it’s advisable an Executor not distribute proceeds without giving beneficiaries proper notice of their intention to do so if the Executor has received notice of a party’s intention to claim. This is so even when the applicant has failed to comply strictly with statutory time limits.
An Executor who distributes the estate after notice of a claim (or before the six and nine-month time limits have expired), may have the distribution set aside by the court. The Executor may also be ordered to personally pay any award made in favour of the applicant as well as their court costs. Alternatively, the court may order that the costs of the application be borne by the estate. Distributing an estate prematurely can therefore be a very costly and risky exercise, however these risks can be avoided by obtaining expert legal advice before a proposed distribution is made.
The value of expert advice
This is a complicated area of law and the guidance of legal professionals with long experience in wills and estates is highly advised.
Delaney & Delaney have extensive expertise in advising both executors responding to FPAs as well as applicants wishing to make such an application. We will provide relevant guidance to ensure an Executor lawfully distributes the proceeds of an estate at a minimum risk to the estate and themselves personally of the distribution later being challenged. Contact us today on (07) 3236 2604 if we can assist you.
