Finalisation & Distribution of Estate to Beneficiaries

34.1.1 Time Limit for Executor to Distribute Estate

How long after probate can funds be distributed? It is a difficult balance to determine the ideal time to distribute the Deceased Estate.

On the one hand, you as the Executor or Administrator want to ensure you are not personally liable, which may be the case when distributing too early, not completing all the necessary steps or not waiting for the various claim periods to expire (see Step 34.1.3 below).
On the other hand, if you wait to distribute after 12 months of the death, the Beneficiaries may be eligible to claim annual interest between 2% above the official cash rate target published by the Reserve Bank of Australia and 8%.

Therefore, completing distribution of Estate to Beneficiaries between six to 12 months from the date of death is a general guide. However, depending on your situation, the size and complexity of the Estate and possible disputes, requiring additional time may be reasonable.

Note: All persons involved in the Estate administration, including Beneficiaries, need to be aware that claims against the Estate can still be made by anyone at this point and beyond the expiry of the claim periods and notices.

34.1.2 Possible Claims & Conflicts

• family members of the deceased person, including previous partners and persons who were left out of the Will;
• any person who was dependent on the deceased person; and
• creditors (persons or companies who are owed money by the deceased person).

There may also be conflict between you as the Executor or Administrator and Beneficiaries, or conflict among Beneficiaries if there is disagreement over the distribution. Where you have experienced conflict or hostility during the administration process, the deceased person or Beneficiaries are in complicated relationships or the family structure is unusual, it is advisable to find out how you can reduce your risk by speaking with a lawyer.

34.1.3 Reduce Your Personal Liability

A claim made against the Deceased Estate after distribution, may mean that you as the Executor or Administrator are personally liable and may have to pay such a claim from your personal funds. This could happen when you make distribution of Estate to Beneficiaries too early and not adhering to the required timeframes in your state/territory.

• Deceased Estate should only be distributed after six months from the date of the Grant of Probate or Letters of Administration (WA, VIC) or six months from the date of death (NSW, QLD);
• the intent to distribute the Deceased Estate was published in accordance with the relevant state/territory requirements (see Step 34.7 below);
• the time specified in the notice of intent to distribute the Deceased Estate has expired; and
• the Executor or Administrator does not have notice of an application or intended application for a family provision claim/order or other claim against the Deceased Estate.

Note: It is important to remember that family provision claims can be made up to 12 months from the date of death in some States/Territories. Hence it may be best to wait for the 12-month period after the death has expired to distribute the Deceased Estate depending on the family situation of the deceased person. Interest payments may be claimed by the Beneficiaries after 12 months, which needs to be taken into consideration as well.

If you are unsure and want to be certain, it is advisable to ask a lawyer to review your situation and confirm you are ready to distribute.

34.1.4 Seek Legal Advice

simplyEstate's mission is to empower Executors and Administrators to complete the Deceased Estate of a loved one with as little or much help as needed, in honour of the deceased person and ensuring their wishes are fulfilled.
However, we also think it would be unfair if you had to pay from your own pocket any claims and legal fees due to a dispute once the Estate has been distributed, just because something went wrong or was unexpected.

We strongly encourage you to talk with one of our Trusted Partners in your State, who specialise in this area. They can review the Estate administration to ensure everything was completed accurately and in the required time, nothing was missed and your situation is evaluated for any potential risks.

Note: The cost of meeting with a lawyer to review the Deceased Estate administration prior to making distribution to Beneficiaries will be paid from the Estate. It is your right to seek professional assistance to fulfil your duties as Executor or Administrator with confidence and reduce your personal risk and liability.

As outlined in Step 14 – Paying Deceased's Bills Before Probate (Solvent & Insolvent Estates), you should have always kept a good eye out for any estate bills, debt notices or repayment requests that are due to avoid late payment, additional interest or other charges during the Estate administration.
Now that you are finalising the Estate and preparing for distribution, you should check that all final debts and bills of the Estate were paid and finalised. If there are outstanding payments make these now.

If you want to recap this topic again just to be sure you have thought of everything, refer to Step 14 – Paying Deceased's Bills Before Probate (Solvent & Insolvent Estates) and return to the final step once fully understood and actioned.

• interest on 'Estate of Late' bank accounts;
• investment returns such as dividends on shares;
• income from an investment property or letting the deceased person's home;
• income from a trust as a Beneficiary;
• income from capital gains after the sale of an appreciating asset;
• income from franked dividends;
• money from a business; or
• any other form of income as defined by the ATO.

You will need to receive a tax assessment to know how much tax is payable from the Estate and either pay immediately or retain that portion of funds aside before distribution.

If you need to lodge a tax return for income generated, you should follow Step 32.3.3 Deceased Estate tax return (trust tax return).

Once all debts, bills and taxes were paid, you should finalise the Assets & Liabilities Inventory. You should check that all items making up the distributable assets and liabilities of the Estate are accurately reflected and are in possession of the Deceased Estate. This process of checking what you have listed against the valuation report and bank statements is called a reconciliation and ensures the figures captured are correct and all assets are held in trust by the Estate.

The simplyEstate Assets & Liabilities Inventory is a great tool that helps you capture all assets and liabilities during the Deceased Estate administration process.

Once the inventory is reconciled and finalised, you should not make any changes. If you have to make a correction, you will need to reconcile again.
You will likely need to lodge this inventory with the Supreme Court as part of the note of intent to distribute the Estate, explained below.

If you have determined the Beneficiaries and their entitlements based on the Will, intestacy rules or any other legislation in the relevant state/territory, you should inform each Beneficiary of their inheritance.

• Assets & Liabilities Inventory; and
• Testamentary Costs & Executor Expense Tracker (part of Essential Executor Checklists & Tools Package)

• the residual value of the Estate;
• the inheritances and what they are made up of (e.g. real estate, land, cash, artwork, jewellery etc.);
• how assets were dealt with;
• expenses incurred from the Deceased Estate administration;
• request for consent;
• request for bank details for cash transfers; and
• arrangements to transfer property, furniture or other assets inherited.

Each Beneficiary should review and sign this document before issuing any inheritance, in case a Beneficiary does not agree and makes a claim against the Estate.

Note: If you foresee potential disagreement or conflict between Beneficiaries or with the proposed distribution, you should seek legal advice to draft a tailored statement of distribution of Estate that is legally binding.

Now that you have informed each Beneficiary and have agreed the distribution, depending on your state/territory, you may need to publish a notice of intent to distribute.

This notice is required in some States/Territories to protect you and the Beneficiaries by allowing official and sufficient notice about the intent of the Deceased Estate distribution. This again allows any creditors, other family members or previous spouses who believe to be a Beneficiary, to make a claim. As part of this application, the Supreme Courts will likely need submission of your final Assets & Liabilities Inventory (in the court's required format) stating all assets, liabilities, receipts and disbursements of the Deceased Estate.

Tip: The notice of intent to distribute provides some protection to the Executor or Administrator's personal assets should any claims be made from the Deceased Estate after it was distributed. Especially, if there may be a risk of dispute among beneficiaries and family members, complicated relationships and family structure or other issues, it is advisable to find out how you can reduce your personal liability.

Follow the process outlined for the relevant State:

Once you have made the necessary applications to the relevant Supreme Court and the notice periods in the relevant state/territory have expired, you can follow the below steps to distribute the most common assets.

Note: You should carefully read 34.1 Key Considerations Before and After Distribution before proceeding.

34.8.1 Cash

Cash is the simplest asset to transfer as it can be transferred from the 'Estate of Late' bank account to each Beneficiary's bank account electronically or at a branch.
Always make sure to double-check the account details are correct as funds transferred to a wrong account may not be recoverable.

When transferring large amounts, it may be better to validate the bank details by making a small payment first to check receipt with the Beneficiary before transferring the remainder.

34.8.2 Real Estate and/or Land

Where real estate and/or land is distributed to one or more Beneficiaries as outlined in the Will, Grant of Probate, Letters of Administration or as per the distribution rules outlined in the various Acts in your state/territory as specified above, you should follow these following steps.

You, as the Executor or Administrator, can transfer the real estate to Beneficiaries only if the real estate was transferred to the Deceased Estate and the title currently shows your name as outlined in Step 30.6 – Deceased Estate Transfer of Property (Real Estate).

34.8.3 Furniture & Other Valuables

Furniture and other valuables will need to be arranged to be collected with the Beneficiary. If you held these items in storage or in your possession, you should agree a pick-up date and time.

If you used storage facilities, these can be cleaned and closed to ensure you don't incur any further fees.

• 'Estate of Late' bank accounts;
• Investment accounts used to generate income during the administration process;
• Insurances held while the items were held in trust;
• simplyEstate subscriptions and accounts; and
• anything else that you put in place or made use of to assist with the administration.

Now that the Deceased Estate administration is distributed and finalised, you should file all documents for at least seven years. Keep the documents clearly labelled in a place that is safe from flooding, fire and unauthorised access.

These records may be needed in case there is a tax or other inquiry into the Estate administration and will help you produce documents when required.