Getting a Court Ordered Advance from an Estate

Fortunately, the Court has the power to order an advance from the estate prior to the final determination of the legal action

After a will variation claim has been commenced, the party seeking a variation is content to hold up distribution of the estate funds as that definitely puts pressure on the beneficiaries to settle. Fortunately, the Court has the power to order an advance from the estate prior to the final determination of the legal action. This order is only available for a beneficiary under the Will where there are sufficient funds to make the distribution. It is not available to a party that has been disinherited as there is the risk that the case may be dismissed at trial.

The starting point is to ask for consent from the beneficiaries under a Will and the claimant for an interim distribution of estate funds. However, if the beneficiaries do not consent, the executors and/or beneficiary of an estate can apply to the Court to make an interim payment.  Recent legal cases have set out a number of factors the Court may consider when deciding whether or not to exercise its discretion to allow the executors of an estate to make an interim monetary distribution.

The factors to include are:

  1. The amount of the benefits sought to be distributed as compared to the value of the estate;
  2. The claim of the beneficiaries on the testator;
  3. The need of beneficiaries for immediate funds; and
  4. The consent of the residuary beneficiary to the proposed transfer.

Regarding the first factor, the Court is more likely to order a distribution if the left-over funds in the estate are more than sufficient to meet a variation award that could be made upon final determination of the action.

When applying for interim distribution, it is necessary to provide sufficient evidence of current financial circumstances that demonstrate an immediate monetary need. As an example, this need could be established with evidence of insufficient personal income to meet various accumulating debts.

The Court will weigh the fact that a residuary beneficiary under a will does not consent to the distribution against other factors which suggest a need for a monetary advance in making its decision.

It is also important to note that a court ordered interim distribution of estate funds will only be granted to persons who are already beneficiaries under a will that is the subject of a variation proceeding. The Court will not grant an interim distribution to persons who are applying for a variation and have not been named as beneficiaries in the original will.

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