How long does an Executor need to wait to distribute the estate after receiving notice of a claim?

An Executor had received notice of an intention to make a claim on an Estate from an estranged child of the deceased.

Following legal advice, he decided not to pay out any money from the Estate for a year after Probate had been granted by the High Court.  That year passed with no claim made, and the deceased’s other children started to ask when they could expect their inheritances to be paid.

Even when the instructions in a Will seem clear, it may be possible for family members, relatives, creditors, or other persons promised benefits by the deceased, to challenge the Will or make unexpected claims against the Estate.

If someone intends to make a claim against the Estate it needs to be made within 12 months after the date the Court grants Probate of the Will or Letters of Administration.

The Executor naturally didn’t want to wait indefinitely for a claim to come in, but was nervous about distributing the estate, so sought further legal advice.

When an Executor or Administrator receives notice of a claim against the estate, it is generally good practice to wait for the claim to be settled before distributing any assets.

However, it can become difficult for an Executor or Administrator to know what to do when they receive a notice of intention to make a claim within the time limit, but there is long delay after the notice is given and no application has been made to the Court.

The 6-month “indemnity” period…

Executors are generally expected to wait 6 months after Probate before making any distributions from an estate to allow any notice of a claim against the Will to come in. The exception to this is if there is no notice of a claim and all named beneficiaries agree to an early distribution of some or all of the assets.

Executors and Administrators may be held  liable for successful claims made against the Estate if they choose to distribute early.

However, if there has been notice given of an intention to make a claim, the Executor or Administrator should generally delay distribution until the claim has been filed and heard to lessen the risk of being held  liable due to an early distribution. Any notice of a claim against an Estate must be acted on by a claimant within 3 months of giving notice to make a claim.

The 12-month period…

Claims against Estates must generally be made within 12 months of the date of Probate. Therefore, the Executor may distribute the Estate after the 12-month time limit has expired if no application has been made to the Court, even if they had received notice of intention to make a claim.

If you are an Executor and you are feeling unsure about your role or duties with regard to any claims, it is important to seek legal advice from an expert in the area to make sure you protect yourself.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Please note that Rainey Collins is not contracted to provide Legal Aid, other than in the Treaty of Waitangi area.  We therefore are unable to take on any Civil or Family Legal Aid work. If you require Legal Aid in those areas, you can search the list of Legal Aid lawyers on the Ministry of Justice website.