Law Talks Episode: Why finalising an estate can take so long – and how to avoid delays

Robyn: Good morning and welcome to another edition of law talks here on 4CRB.

Today, we’re exploring a topic that affects many families, but often only comes to light after someone has passed away, and that is why it can take so long to finalise a person’s estate.

Joining us is Angela Harry, a Partner at Attwood Marshall Lawyers who specialises in elder law, probate and estate administration and estate planning. We’ll be unpacking what really happens after someone dies, what steps are involved in winding up their estate and what can cause delays before beneficiaries receive their inheritance.

Thanks for being here, Angela.

Angela: No problem, thanks for having me.

Robyn: Firstly, can you tell us how long does it usually take to administer an estate after someone passes away?

Angela: That’s a really good question and something that comes up quite frequently. I guess I’ll give the legal answer; it depends.

The timeframes really vary depending on the size and complexity of the estate. I would say that most simple estates take anywhere between 6 to 12 months to finalise. But if you have a more complex estate they can easily take 12 months to 18 months, even years depending on what’s involved.

What we I guess need to look at when we’re considering the timing is you know what the stages are for the administration. So really, if you’re looking at. all right, well let’s locate the will, sometimes that can be a difficult exercise in itself. Applying for probate or letters of administration, identifying what the assets are and calling them in. The same for liabilities, working out what is owed and paying out those debts and then distributing the estate to the beneficiaries under the will. And delays can arise at any stage during the administration.

Robyn: Angela, what are the biggest causes of delay in administering an estate that you see?

Angela: We see all sorts of causes of delay. Sometimes it might relate to the validity of the will, which is the last will of the deceased, has it been completed in accordance the with legal requirements.

Sometimes there can be disputes amongst beneficiaries or the executor. Often it’s a case where there’s difficulties trying to identify or locate assets. You’ll often have executors appointed who may have little or no knowledge around what is actually in the estate. So, if they’re trying to piece together that puzzle, particularly if you’ve got assets across jurisdictions or even overseas, that can be a bit of a cause for delay.

Sometimes it can be dealing with certain financial institutions or government bodies in relation to the release of funds.

Tax is always an issue that we say that can result in delay. And the actual court process itself. So, when probate or letters of administration is required, we find that a lot of people do not appreciate how long this process can take.

Robyn: And what happens if someone contests the will? What kind of delay could that cause for the estate to be administered?

Angela: That definitely causes delay, and we see, there’s different ways that a will can be contested. It could be through a family provision claim where someone is saying, well, I’ve been left out or haven’t been left with adequate provision so I want more.

The other form we see is a challenge to the validity of a will, where someone says that will is not valid.

So those sorts of claims can definitely delay the administration. Sometimes it can be by months, in other cases it can be by years. Unfortunately, that would probably be one of the biggest causes for delay, because if you’re going through the court process, it is not a quick exercise. Even once you do go through that process whether the matter resolves at mediation or you have to go to a final hearing and the judge makes a determination, even after you resolved it, there’s often delays after the fact because that is only one component of the estate and then you still have to go through the administration exercise so you know liquidating assets dealing with lodging tax returns. I would say it’s definitely a very big cause for delay in any estate if there is some form of challenge or contest to a will.

Robyn: And are there any shortcuts or ways to speed things up?

Angela: Look I think there can be. Any executor or beneficiary needs to be mindful of what we call the statutory time limits. So, there are time limits which creditors or claimants have to be afforded to give notice of a claim on the estate. But putting that to the side, I think probably one of the most effective ways to progress the administration or speed things up is to have a will which is up to date and it’s very clear for the executor who is appointed what assets and liabilities you have, who the beneficiaries are, how they are able to be contacted. Having an executor who is organised, who has the time to take on the responsibility because there can be a fair bit involved, and they have a general understanding of the process, can help to progress the administration.

Making sure those executors seek legal advice early on to make sure they’re doing things properly and following those procedural requirements. But also having discussions between families, trying to minimise conflict and getting everyone on the same page as part of the administration, because what we see is things can really delay when there is a level of conflict or misunderstanding amongst family members.

Robyn: And what happens if there are debts or unpaid taxes to deal with?

Angela: So, any debt has to be paid before the estate can be distributed. But, when it comes to taxes, I would say, because it’s probably one of the causes for delay, you know, and probably one of the most frustrating experiences for executors and beneficiaries because there’s often a level of misunderstanding around the timing and, you know, what executor’s functions and responsibilities are.

And any executor must ensure that the deceased’s tax returns, whether those in their lifetime are up to date, but also any estate tax returns are lodged and any tax paid.

Often, we’ll have to wait to finalise the tax before we can get an idea of how we can distribute the estate and when. It’s never quick, unfortunately, going through the process of gathering that information, engaging an accountant, preparing the terms and lodging them, I find that is probably the biggest source of frustration we get from executors and beneficiaries alike. But what we often do when we have the tax that we need to deal with is try and get advice around what we think the tax liability is going to look like, so we can try and do some form of interim distribution or deal with most of the administration, but hold back enough to ensure that the tax will be paid.

Any executor or personal representative needs to appreciate that they are personally liable, so no distributions should be made to beneficiaries without ensuring there is going to be enough to pay the taxes that are owing.

Robyn: Yeah, that’s a very important point that you make. And how can families plan ahead to avoid any issues and help ensure those that they want to inherit can do so sooner rather than later?

Angela: I believe it’s really important to get legal advice and make sure you have a properly drafted will and comprehensive estate plan.

It’s really important to have a trusted and competent executor. I see so many estates where we have delay because there is an executor who just cannot undertake the task, whether it’s they don’t have the time or the experience, or there’s conflict between multiple executors.

Having discussions with the family about you know what you’re intending may potentially reduce the risk of disputes. But also ensuring that executors you know, once they are nominated and the person passes away, going to get legal advice early to help navigate through the process.

Robyn: Well, that brings us to the end of today’s conversation on finalising an estate. Whether you’re navigating the role of an executor or just planning ahead, we hope today’s discussion has given you some clarity and confidence.

Thank you, Angela, for breaking down what can often be a complex and emotional process.

Angela: Thanks for having me.

Robyn: You’ve been listening to law talks here on 4CRB, which you can hear every Friday morning from 9 o’clock.