This can prove particularly troubling if the executor does not know the deceased’s affairs well enough to be confident there are no creditors (or who they are) or when the estate is ready to be distributed but a claimant is slow to actually pursue the claim they have been threatening.
Generally speaking, claims in NSW for further provision from an estate must be brought within 12 months of the date of death. Other claims, such as for recovery of loans or debts, can be pursued for up to 6 or 12 years.
So what can an executor do if claimants are tardy in pursuing their claims?
The Probate and Administration Act set out a regime for protecting executors from claims. Relevantly, the Act provides that an executor is not liable to creditors or claimants for distributions they make from an estate if:
- the assets are distributed at least 6 months after the date of death;
- the executor has given at least 30 days’ notice using a prescribed form;
- the notice period has expired; and
- the executor did not have notice of the claim at the time of the distribution.
If an executor does have notice of a potential claimant or creditor, then the executor can seek an order from the Supreme Court barring the claim if:
- the executor has published the notice mentioned above;
- the executor calls on the claimant to enforce their claim; and
- the claimant does not do so within 3 months.
The Supreme Court is not bound to make a barring order, but threatening to apply for one is often enough to bring things to a head and allow the administration of the estate to proceed unhindered.
