By Trainee Solicitor, Lydia Durkin
When someone dies, the person responsible for winding up their affairs is called the Executor or Administrator of their Estate (depending on whether or not there is a Will). This person is allowed to take exactly one year from the date of the death to administer the Estate, settle any outstanding debts and distribute the rest of the Estate to those entitled to inherit it. This is what's called the 'Executor's Year.'
For free initial advice and guidance call our Probate Advisors on 03306069584 or contact us online and we will help you.
How Long Does it Take to Administer an Estate?
Each Estate will take a different amount of time to administer and distribute. There will be various factors, such as the complexity of the Estate or the number of assets held by the deceased. In some instances, the Executor or Administrator (known collectively as the 'Personal Representative') may be unaware of many hidden assets held by the deceased which can cause further delays.
In any event, when dealing with the administration of an Estate, the Personal Representative has a number of duties that they must carry out. These include calculating Inheritance Tax and settling any debts which the deceased may have had. In addition, they are also under a duty to safeguard any assets which were owned by the deceased.
How the Executor's Year Works
The law states that the Personal Representative of an Estate is permitted to distribute the Estate before the expiration of one year (365 days) from the date of death. This law is set out in the Administration of Estates Act 1925 and the only exception to this deadline is if there is a Will which permits a longer time period.
The Estate must be administered within this timeframe as per inheritance laws and the terms of the Will (if there is one). This is commonly known as the 'Executor's Year.'
What if the Estate Administration Takes Longer than a Year?
If an Estate takes longer than one year to distribute then the Personal Representative could be held personally liable for any loss caused as a result of the delay.
However, it is not uncommon for more complex Estates to take longer than one year to distribute. For example, if there is a claim which is being investigated by the Department for Work & Pensions or if the deceased's property is proving difficult to sell, these situations can often delay the Estate administration process.
In such circumstances, so long as the Personal Representative is acting in good faith then the length of the Estate administration process will not necessarily be called into question. However, the onus will be on the Personal Representative(s) to justify the delay.
In many cases, Beneficiaries will be unaware of the obligation on the Personal Representative(s) to make a full assessment of all of the Estate's liabilities and assets before any distributions can be made. If a Personal Representative is put under pressure to distribute funds to Beneficiaries before the 12-month period is up, and a serious mistake is made, then it's the Personal Representative that will be held personally liable.
It is important to also keep in mind that where Beneficiaries do put pressure on the Personal Representative to administer the Estate quicker, and a mistake is made, they can suffer the consequences of the Estate being wrongly distributed.
When an Estate is likely to take longer than a year from the date of death to complete, the Personal Representative should usually be able to provide Beneficiaries with the option of an interim payment.
In most circumstances, the Personal Representative will hold Interim Estate Accounts, which list the assets and liabilities of the Estate. If the Personal Representative is completing the Probate work themself, then they will be responsible for preparing the Estate Accounts. If they have instructed a professional to complete the Probate work, such as Co-op Legal Services, then their Probate specialist will usually prepare the Estate Accounts on their behalf.
Once the Estate Accounts have been produced, these can be used to determine whether it's possible to provide an interim payment to the Beneficiaries of up to 80% of the total funds held. In some cases it may not be possible for a distribution to be made, this is often the case where the Department for Work and Pensions are investigating the affairs of a deceased individual.
Additional Costs if the Executor's Year Expires
If the distribution of an Estate takes longer than a year, interest becomes payable on the Estate. Other costs which may be charged include:
- Capital Gains Tax which may be payable on the Estate if the deceased's property is sold over two years after the date of death
- Stamp Duty Land Tax (SDLT) which may be payable if the deceased's residence is not dealt with within one year of the date of death.
What to do if there are Unjustified Delays during Probate
If a Beneficiary feels as though there are unjustified delays to the administration of the Estate, then they do have a legal right to make a claim against the Executor or Administrator. If a Beneficiary does decide to make a claim against the Personal Representative, then this could result in them being removed from their role and a replacement appointed.
To speak with a Co-op Probate Advisor call 03306069584 or contact us online and we will call you.