Do you understand the Liability of Executors?
Under the Inheritance (Family Provision) Act 1972 (SA) person(s) may bring an action for further provision from an estate on the basis that they have been left without adequate provision for their proper maintenance, education and advancement.
A claim for further provision must be made within 6 months from grant of probate; however, Courts have discretion, upon application, to extend this time.
The ability of a party to contest their provision creates several issues for executors to consider when distributing estate assets. This very issue was recently considered by the Full Court of the Supreme Court in Brooks v Young  SASCFC 81.
In the above case, the Full Court held that an executor has no fiduciary obligation to a claimant until their claim for further provision is successful. Further, there is no legal obligation for an executor to wait 6 months before distributing estate assets; however, doing so may make them personally liable to a successful claimant.
What can an Executor be liable for?
An executor may be held personally liable for early distributions of estate assets in circumstances where:-
- He or she receives notice of a claim under the Inheritance (Family Provision) Act 1972 (SA);
- He or she then makes a distribution within 3 months of receipt of the notice;
- The claimant then brings a claim following that distribution but still within 3 months of having given notice and 6 months from the grant of probate; and
- The claim is successful and an order for further provision is granted.
It is important to note that any claim for provision made more than 6 months from the grant of probate will be limited to undistributed funds. Funds already in the hands of beneficiaries will not be included in the assessment of the claim.
An extension of time will not be granted if all assets have been distributed.
Whether or not to distribute is a question that requires careful consideration.
We can help you
To limit the risks of any potential liability, we strongly advise that you engage, at an early stage, legal representation from qualified estate lawyers. This is best way to proceed with confidence and ensure that you are discharging your role in a lawful and correct manner.
If you require legal assistance with an estate matter, please do not hesitate to contact one of our team members today.
Call Williams Legal 84519040