Hypotheticals by Manny Wood. Published in the Coffs Coast Advocate on 27 February 2016.
This is a “rule-of-thumb” time period during which a deceased estate should be distributed.
An executor obtains personal protection from creditors if a notice of intention to distribute is published on the Supreme Court web-site and 6 months from the date of death expires.
If a deceased’s will gives monetary gifts to a beneficiary, interest will start to accrue after the expiry of the “executor’s year”.
In some circumstances, such as when real estate needs to be sold, it may be reasonable for the administration of an estate to exceed the “executor’s year”.
What are discretionary trusts and testamentary trusts?
These trusts are created by a testator’s will, whereby a trustee (often the executor) is appointed to manage the trusts. This means that beneficiaries’ inheritances are held by the trustee and distributed after the administration of the estate is complete and often well after the expiry of the “executor’s year”.
A discretionary trust gives the trustee the power to make distributions to beneficiaries as the trustee sees fit and sometimes in accordance with a non-binding “memorandum of wishes”.
These trusts mean that a beneficiary’s entitlement is not readily identifiable which can prevent a beneficiary from “calling-in” their inheritance.
A discretionary trust can be useful in protecting an inheritance from creditors and in circumstances where there may be a risk of family law proceedings. A discretionary trust can also have tax advantages, especially where the beneficiaries have not attained the age of 18 years.
Are wills registered?
There is no central registry for wills. There was once an initiative administered by Births Deaths and Marriages, but this service is no longer available.
A will can be lodged with the Supreme Court, but this is rare.
