Interim Distributions in a Deceased Estate

Administration of a deceased estate is the process whereby the legal personal representative of the deceased’s estate ascertains the information needed to wind up the estate and then carries out the instructions of the will-maker in their will or if the deceased passed away intestate, then in accordance with the relevant legislation.  During the course of the administration of an estate, a beneficiary has no immediate right to be paid money (or receive things) from the estate.  However, the legal personal representative may, in certain circumstances, have a duty to make interim distributions from an estate not yet fully administered.

Administration Duties Complete

The estate must have been administered and the legal personal representative (Executor/Executrix/Administrator) must have carried out all of the duties of administration (including ascertaining the interests of the beneficiaries), for a beneficiary to have the right to require payment of his or her share from the estate.

Appropriation – Property

A beneficiary may have a right to certain estate assets if the legal personal representative appropriates some of the estate assets in full or partial satisfaction of the entitlement of a beneficiary.

Appropriation – Right to Interim Distribution from Estate Before it is Finalised

It  may be the duty of a legal personal representative to make an interim appropriation of estate assets so that he/she can pay a pecuniary (money) legacy or distribute a specific asset or make an interim distribution of pecuniary legacies or interests in residue, even though the duties of administration are incomplete, such as when:

  1. the legal personal representative knows there are distributions of the estate which could be made in accordance with the will/rules of intestacy;
  2. there is no realistic prospect that that distribution could be cut down or affected by those aspects of administration of the estate which remained unperformed; and
  3. the remaining tasks of administration are not likely to be completed soon.

No Risk of Assets Being Used up in Future

A legal personal representative may be obliged to make an interim distribution of assets in the estate which are not at risk of being used up in the future administration of the estate, when it is clear who the correct recipient is.  When the expenses of administration are of an uncertain amount the legal personal representative is entitled to adopt a cautious approach.  Interim distributions will only be made when there are no realistic prospects of a shortfall in funds for the ongoing administration of the estate.

Risk to Trustee

If there is a serious risk of personal liability to executors/executrices (in relation to costs), the court will not order an interim distribution.

Against Public Policy

A court will refuse to order an interim distribution of an estate if that distribution might contravene a rule of public policy.  In a particular case, an executor sought an order for interim distribution of his late father’s estate.  The executor had been charged with the murder of his parents and sister.  The order was sought so he would have sufficient money to finance his defence of the criminal charges.  One of the reasons for refusing the order sought was that an interim distribution might contravene a rule of public policy.  If the executor was found guilty of murdering his parents, he would be deemed as having forfeited his interests in the estate.

If you have any queries in regard to the administration of a deceased estate, we recommend that you seek legal advice before taking any step in that regard. At FLSD we have a team ready to help you administer a deceased estate in Perth – contact us today.

By |2018-12-14T11:05:12+00:00July 18th, 2014|Blog|0 Comments

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