31/10/2012

Gary is the executor for his friend Tom’s estate. Tom has left a sizable estate sufficient to pay out his funeral and other debts, and pay all the beneficiaries named in his Will including his adult son Steve who stands to inherit the bulk of the estate.

Tom’s other beneficiaries are his neighbours Greg and Linda who used to cook a meal for him every few days in the last years of his life and will inherit a small specific bequest of $5,000 each.

But Gary has received a signed letter from Liz who claims she is Tom’s daughter from his very short first marriage saying that she intends to make a family provision application.

In relation to family provision legislation, section 93(1) of the Succession Act 2006 (NSW) provides protection for legal representatives who distribute an estate if:

• the property is distributed at least 6 months after the person has died;
• after giving notice of intended distribution of the estate;
• the time specified in the notice is not less than 30 days after the notice is given; and
• the time specified in the notice period has expired.
  

The requirement of giving notice of intended distribution is that the notice must be published in a newspaper circulating in the district of New South Wales where the deceased resided or a national paper if the deceased resided outside NSW.

For the family provision sections of this Act, a “legal representative” is defined as the person to whom administration is granted. Administration is granted when probate or letters of administration of the estate are granted.

To obtain the protection afforded by the Act, there is a further requirement that at the time of distribution, the legal representative did not have notice of a family provision claim for the estate.

Section 94(4) states that a legal representative who receives notice of an intended application is not liable if the distribution was made in compliance with sections 93(1) not earlier than 12 months after the person died.

However, if the legal representative has received written notice that the application for family provision has been commenced in the Court or they are served with the Court documents, this protection does not apply.

It would be prudent to also adhere to Section 92(3) of the Probate and Administration Act 1898 (NSW) which specifies that an executor or an administrator is deemed to have notice of a claim under the estate, if such a claim would have become apparent had the executor obtained a certificate from the Registrar of Births, Deaths and Marriages stating whether or not the deceased was recorded as being the parent of any children.

Such a certificate would show whether the executor could potentially receive a family provision claim from a previously unknown child of the deceased. For this reason, the executor is not protected unless such a certificate is obtained and it is apparent from it that there are no other unknown children of the deceased who could make a claim on the estate.

In this instance, as Gary has only received notice of an intended family provision application from Liz (rather than actual Court documents or notice that the application has commenced in Court), he will have to wait at least 12 months after Tom’s death to distribute the estate to obtain protection of the Act.

Gary will not be liable if he waits the 12 months before distributing Tom’s estate, follows the due process of properly giving notice of distribution, waits another 30 days after the notice is published and obtains the certificate which shows that Tom had no other children.

There is similar legislation in other States, albeit with some variation on the requirements for the publication of notices and the expiry of time before a distribution of the estate can be made.

If you have any questions in relation to this article, please contact TOWNSENDS BUSINESS & CORPORATE LAWYERS on (02) 8296 6222.