One common misconception about the administration of estates is that it is a quick process, or if not quick, that it should be done in a few months at the max. Administering an estate is a lengthy process whether you are the personal representative in charge of administration or whether you are a beneficiary waiting to receive funds or another bequest from the Estate. The timeline for administration of most estates – from the date of death to final tax clearance – is 12 months to 18 months; but it is not uncommon for it to take up to 24 months.
Every estate is different and some are easier to administer than others. This is largely dependent on a few factors:
- What kind of assets the deceased person had;
- The financial institutions or other third parties involved;
- How many beneficiaries there are;
- Family dynamics; and
- Any other complicating factors that arise.
No two estates are exactly alike and the knowledge and general abilities of each personal representative vary as well. Some personal representatives engage legal counsel right away while others take a passive approach only consulting with legal counsel when they encounter road blocks. Choosing to involve legal counsel can sometimes speed up the process as estate lawyers are experienced in the processes and procedures of estate administration. Having this assistance can streamline the process; however, no matter how knowledgeable or experienced legal counsel is, they can only work with the hand that they’ve been dealt; the key benefit to having legal counsel is that they can assist with deciding how best to play the cards.
These five factors are the most common indicators of the timing of the estate administration process:
1. What kind of assets the deceased person had
The type of assets that the deceased person had is the single biggest indicator of the complexity of the administration as well as the length of time that administration will take. For instance, if the deceased person had bank accounts and investments only, that estate will be much less complicated and take much less time to administer than an estate where the deceased person had multiple bank accounts, investments, homes and vacation properties, personal property, and business assets.
Additionally, an estate which does not require an application for a grant of probate or grant of administration will take less time to administer than an estate which requires a grant of probate or grant of administration (for an explanation on probate, see this previous School of Scheff article). This is dictated by the assets that the deceased had and the ownership interests. In general, estates with land/homes or bank accounts over $20,000 will require probate; but there are exceptions.
2. The financial institutions and third parties involved
Some financial institutions are faster than others at sending final bank statements and liquidating accounts. Some can accomplish this in 3-4 weeks while others require numerous follow-ups and can take 3-4 months. Additionally, if you’re dealing with investments, these might be held with different financial institutions than the day-to-day banking accounts. Each of these institutions have different timelines. Additionally, some types of shares require special paperwork be filled out to transfer or liquidate them.
If the deceased person owned property in a National Park, like Waterton for instance, there is a complex process for transferring these assets and the processing time varies. There can also be complications with National Park properties, which also take time to sort out.
3. How many beneficiaries there are
An estate with a single beneficiary, such as a spouse or an adult child, will take less time to administer than an estate with multiple beneficiaries. The more beneficiaries there are: the more people there are to coordinate, the more cheques there are to cut, the more releases there are to be generated, and in general, the more people there are to keep in the loop. You might have some beneficiaries that are very responsive and get documents back to you quickly, while others may be difficult to get documents back from at all. Some beneficiaries may be in close proximity to where the estate is being administered while some may be in a different province, a different country, or a different continent.
4. Family dynamics
An estate with good family dynamics generally takes less time, subject to the above factors, to administer, than an estate where there are poor or contentious family dynamics. If confrontations arise or there are parties who cannot agree on decisions which require consensus (such as when there are multiple personal representatives or if there are multiple beneficiaries that personal belongings are divided between, but there are disputes about who is going to get what), this will take longer to sort out and longer to administer than an estate that doesn’t have these issues.
Further, an estate with poor or contentious family dynamics is much more likely to have legal disputes that may require Court intervention or have legal claims being made against assets or challenges to the Will. Any estate that requires Court applications or other Court intervention will take longer to administer than one that does not; even if the matter is able to be dealt with in a reasonably quick fashion.
5. Any other complicating factors
Every estate is different and every estate has its own unique complicating factors. This could be anything from an asset that is difficult to sell or otherwise deal with (such as a timeshare in another country); a beneficiary that won’t deposit their cheque and also won’t disclaim the gift; complications with beneficiary designated assets; and anything else that you might think could only be part of a law school exam fact pattern.
There are many estates that are administered smoothly without any complicating factors, but it is something to be aware of from a timing perspective. Every estate is unique and you never quite know how the administration process will go. These five factors are not the only things that can contribute to the length of time it takes to administer an estate, but hopefully this gives you a small glimpse into the process.