Making a Claim Against an Estate after Distribution

Once a deceased’s estate has been distributed to the beneficiaries, it is often too late to assert any right to that estate. However, even though there are time limits for making a claim against an estate, the court can still exercise some discretion if a claim is brought out of time. It may also be possible to claim against any personal representatives responsible for administering the estate in circumstances where the estate has been distributed too soon.

In this guide, we look at who can claim against an estate and the timescales involved. We also look at when a claim can still be made against an estate, or against the executors or administrators, even after the estate has been distributed. Finally, we examine the basis upon which a Will can be contested, and on what grounds, once a Will has been honoured.

 

Who can bring a claim against an estate?

 

After someone dies, certain individuals will have the right to make a claim to the deceased’s estate if adequate provision has not been made for them for under the terms of any Last Will and Testament or, alternatively, under the rules of intestacy if the deceased died without making a Will. These claims are commonly referred to as Inheritance Act claims.

Under the Inheritance (Provision for Family and Dependants) Act 1975, the court can be asked by certain family members and dependants to vary the distribution of the deceased’s estate so as to make financial provision for them. This can include the deceased’s spouse or civil partner, and any dependant children, although these types of claims are not limited to next of kin or children under 18. Under the 1975 Act, a person may be eligible to make a claim for financial provision where they fall into any one of the following categories:

 

a) the deceased’s spouse or civil partner

b) the deceased’s former spouse or civil partner, as long as that person has not remarried or entered into a subsequent civil partnership

c) any person cohabiting with the deceased for at least 2 years prior to their death

d) any child of the deceased, including adult children

e) any person treated as a child by the deceased, including adopted or stepchildren

f) any person who, immediately before the deceased died, was being maintained by them.

 

What are the time limits for claiming against an estate?

 

Under the 1975 Act, the court can make an order where it is satisfied that reasonable financial provision has not been made for the claimant, either under the deceased’s Will or the rules of intestacy if the deceased died intestate. The court then has a relatively wide discretion to redistribute the deceased’s assets, where considered appropriate, with the power to grant either regular payments, a single lump sum and/or the transfer of property.

However, there is a time limit of 6 months for bringing this type of claim, designed to provide some certainty, both for the personal representatives and beneficiaries alike, where claims have been threatened against a deceased’s estate by aggrieved family members.

The 6-month time limit for applications runs from the date on which representation in respect of the deceased’s estate is first taken out. Representation refers to the grant of probate where executors have been appointed under the terms of a valid Will or, alternatively, the grant of letters of administration where administrators are appointed by the probate registry because the deceased died without making a Will. This means that if a grant is dated 1 December 2022, a claimant will have just 6 months from that date, so until 31 May 2023, within which to issue proceedings applying for an order to vary the distribution of the deceased’s estate so as to make financial provision for them.

It is open to a claimant to commence proceedings prior to the grant of representation. The court also has the discretion to grant permission to extend time after the expiry of 6 months, but this will only be in exceptional circumstances. In any application to extend time, the court must not only be satisfied that the claim is arguable, but that there are good reasons justifying the delay, where the onus will be on the claimant to show sufficient grounds for the grant of permission to apply out of time. For example, a claim may be allowed to proceed out of time where negotiations had already commenced with the personal representatives prior to expiry of the 6-month time limit and the prospective claimant acted promptly in applying for the extension after expiry of the time limit.

However, time is of the essence when making an Inheritance Act claim, where permission from the court to extend time should never be assumed.

 

Can you bring a claim against estate after distribution?

 

In most cases, the personal representatives will not distribute an estate immediately after the 6-month time limit has expired. Executors or administrators who wait at least 6 months from the date of the grant of representation before distributing the deceased’s estate will be protected from liability under the 1975 Act. However, most personal representatives will still wait at least 10 months in total from the date of the grant. This is because applications under the 1975 Act can often be issued just before the 6-month time limit expires, where a claimant will be given a further 4 month period within which to serve their claim.

Practically speaking, therefore, provided a claim is issued in time, and even in cases where the court has exercised its discretion to permit a claim to proceed out of time, there will usually be no issue of dealing with an estate already distributed. Further, once 1975 Act proceedings are served, the estate cannot then be distributed until the claim is resolved.

In cases where a claim is issued out of time and the estate has already been distributed, an application under the 1975 Act may still be allowed to proceed, although the extent and timing of that distribution will be weighty factors that the court will take into account when considering whether to grant permission to extend time. For example, the court will consider whether the estate had been distributed before the claim has been notified to the personal representatives. In practice, in cases where the delay is such that an estate has already been distributed in full prior to any indication of a claim, this is likely to be fatal.

Importantly, in those exceptional cases where the personal representatives have mistakenly administered the estate too soon, ie; prior to expiry of the 6-month time limit, they will be personally liable for any assets that cannot be recovered because of this. Equally, the fact that the personal representatives are not liable after 6 months does not prevent the recovery, by reason of the making of an order under the 1975 Act, any part of the estate already distributed. However, in reality, these types of cases are likely to be rare.

 

What factors will the court consider in a claim against estate after distribution?

 

When deciding a 1975 Act claim, the court will make an order where it is satisfied that the disposition of the deceased’s estate as effected by their Will, or the law relating to intestacy, is not such so as to make reasonable financial provision for the applicant.

When considering a claim, the court will have regard to the following factors:

 

a) the financial resources and financial needs of the applicant, both at the time of the application and in the foreseeable future

b) the financial resources and needs of any other applicant, both at the time of the application and in the foreseeable future

c) the financial resources and needs of any beneficiary of the deceased’s estate, both at the time of the application and in the foreseeable future

d) any obligations and any responsibilities which the deceased had toward the applicant or toward any beneficiary of their estate

e) the size and the nature of the deceased’s net estate, minus any expenses, debts and liabilities

f) any physical or mental disability suffered by the applicant or any beneficiary

g) any other matters, including the conduct of the applicant, or of any other person, that the court considers relevant in all the circumstances of the case.

 

However, where an application is made for an extension of time, the court will need to look at the position as it is at the time of the application, and whether the prospective claimant has an arguable case if the application is allowed to proceed. This is because, in considering the matters that the court must have regard to under the 1975 Act, the court shall also take into account all of the facts as known to it at the date of the hearing.

Inheritance Act claims are rarely clear cut, without the added complexity of a potentially stale claim, where much will often depend on the nature of the relationship between the claimant and deceased during their lifetime. The court will also take into account the financial resources and needs of the claimant and any beneficiaries, and the size and nature of the deceased’s estate. The court can even have regard to the claimant’s conduct.

This all essentially means that a claim will not automatically succeed, and is even less likely to succeed where the passage of time has unfavourably affected the assessment of factors that the court will take into account at the date of the hearing.

Even if an order is made in the claimant’s favour, the question then becomes how any successful claim can be settled. If the personal representatives distributed the estate within 6 months of the grant of representation, they can be held personally liable for anything that can no longer be recovered. However, in all other cases, once the estate of the deceased has been distributed, it will be extremely difficult to reverse the distribution to settle any claim.

 

What are the time limits for contesting a will?

 

In addition to claims for financial provision under the 1975 Act, family members or loved ones may seek to contest a will on various grounds. These could include:

 

a) improper execution: where it is alleged that the Will was not signed in the presence of two independent witnesses, or countersigned by them

b) lack of testamentary capacity: where it is alleged that when the testator signed their Will they were not of sound mind

c) undue influence or coercion: where it is alleged that the testator had been coerced into creating unfair or invalid provisions within their Will

d) fraud: where it is alleged that the Will has been forged, either in part or in full.

 

For claims involving validity, capacity, undue influence or fraud, there is no defined time limit for issuing proceedings. However, as with a claim for financial provision under the Inheritance Act, once the deceased’s estate has been distributed, it will be extremely hard, if not impossible, to try to unpick the distribution to settle any subsequent claim.

In all types of contentious probate disputes, it is important that expert legal advice is sought urgently so that the case can be assessed and the claimant’s interests can be protected. Generally speaking, executors will try to administer an estate within a total period of 12 months, where seeking early advice about contesting a Will can mean the executors are put on notice of a claim and warned not to distribute the estate.

Ideally, if the grant of representation has not yet been issued, a prospective claimant should lodge a caveat with the probate registry. This will prevent the grant of representation from being issued and, in turn, prevent payments from being made out of the estate while a claim is investigated. A caveat can remain in place for a total period of up to 6 months, where it is far easier to claim against a deceased’s estate where probate has not yet been granted, and assets not yet distributed, rather than delaying until it is potentially too late.

Advice should always be sought from an experienced specialist in probate matters.