Time Limits for making claims against estates are brutal

The Family Protection Act 1955 allows children, including biological and estranged children as well as stepchildren who were living with the deceased when she or he died, to make a claim against the estate of the parent where the deceased has breached his or her moral duty to provide for the child in his or her will. What many children fail to understand is that there are rigid time limits for bringing a claim under the Family Protection Act.

A claim under the Act must be filed with the Court within 12 months of the date of the grant of probate or letters of administration, or 2 years in the case of a minor or intellectually disabled child.  The Court does have the ability to extend this period but by far the best practice is to bring the claim within the initial 12 month period.

Importantly, an administrator may distribute the deceased’s estate within 6 months of the date of the grant of probate without incurring any personal liability for an early distribution if he or she has not received notice of an intention to make a claim under the Family Protection Act. If notice of an intention to make a claim under the Family Protection Act has been given to the administrator, the claim needs to be filed with the Court within 3 months after the notice of intention to make a claim is given to the administrator to prevent the estate being distributed without the administrator being personally liable for having done so.

The brutal reality is however that once the estate has been finally distributed the barriers to bringing a claim can be insurmountable.

Meaning of ‘final distribution’

For the purposes of the Family Protection Act an estate is not finally distributed until the administrator of the estate has done everything to effect a transfer of the assets of the estate. In practice that usually means:

• where the administrator of the estate is also the sole beneficiary of the estate and the sole property of the estate is land, final distribution happens when the administrator has registered a transmission of the land to him or herself as administrator – the final act of transfer as trustee to him or herself as beneficiary is not necessary. But the position is different where a creditor has a claim against the estate. Then transmission of assets by the trustee to himself or herself as beneficiary will not constitute a final distribution until the debt over the estate is satisfied. It is essential that there is nothing left to be done by the trustees.
• where the administrator is not the sole beneficiary of the estate, final distribution does not happen until the administrator has done all that is necessary to transfer the assets to the beneficiaries. If the administrator has ceased to hold any assets of the estate in his or her capacity as administrator, and instead holds any assets as trustee for any beneficiaries, final distribution will not have taken place.

Extensions of time where no final distribution

The Court has jurisdiction to extend time for bringing a late claim under the Family Protection Act where:

• the claimant (a claimant is the person making the claim under the Family Protection Act) can establish that the delay is excusable. For example, where an adult child did not know that he or she had a right to bring a claim and the beneficiaries would be in no worse position than if the claim was made within time;
• or the delay is inexcusable but manifest injustice would result if an extension of time was not granted.

Following orders

Section 49 of the Administration Act 1969 gives the Court the power to follow assets that have been distributed into the hands of beneficiaries if a Family Protection Act claim is filed within 12 months of the date of the grant of probate or letters of administration and the application to follow the distributed assets is brought within the same time limit.

However, if the claimant files the claim under the Family Protection Act, and doesn’t know that some of the assets of the estate have already been distributed, she or he can make a separate application for a following order in relation to the distributed assets provided the application is made within 6 months of the claimant becoming aware of the distribution.

The purpose of seeking a following order is to return distributed assets to the estate so that they will be available to satisfy any order under the Family Protection Act in favour of the person bringing the claim. The following order should be heard and determined in conjunction with the Family Protection Act claim.

Tracing

Tracing provides a separate process (in addition to the power of the Court under section 49 of the Administration Act to make a following order) that can potentially assist claimants bringing a claim under the Family Protection Act. The process enables the claimant to locate or trace distributed assets which were originally part of the estate. It allows for the tracing of the original distributed assets even if they have gone into a mixed fund or the original distributed assets have been substituted with ‘new’ property.

The rules around whether tracing may be available depend very much on the facts of each case. To understand whether the process might be of assistance, advice should be sought from an experienced estate litigation barrister.