How long does it take to receive an inheritance in Australia

The timeline for receiving an inheritance can vary significantly based on several factors, including the complexity of the estate, the efficiency of the legal processes involved, and any potential disputes among beneficiaries.

This is a quick guide for non-residents, foreigners and expatriates on how long it takes to receive an inheritance in Australia. We will break down the key steps in the inheritance process, explore the typical time frames, and provide a few tips. Let’s jump right in.

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Note: This article is purely for general information purposes and is not to be taken as financial advice. We recommend that you obtain independent legal and financial advice before making any form of decision.

How long is the process of inheritance in Australia?

In Australia, each state or territory law dictates the process and timing of the administration and distribution of an inheritance.¹ There are also two ways estates are understood. As a straightforward estate or a complex one.²

Straightforward estates

A straightforward estate or will sets out the desires of the deceased or testator in a clear and concise manner. This will usually be in the form of directions, with what each beneficiary is to receive detailed directly in the will.

An example is a will that lists their spouse, child or even pet to inherit the entire estate.² Straightforward estates can take anywhere from a few weeks up to a year depending on how large the estate is.³

Complex estates

A complex will is created by the testator to control exactly how their estate is to be distributed. This could include conditions that beneficiaries need to meet, an existing business that is continuing to operate, or a testamentary trust intention is included.

Usually complex wills are associated with large and multifaceted estates, and potentially multiple beneficiaries. These types of wills can take well over a year to distribute.²

What happens during the inheritance process

Whether there's a straightforward or a complex will, the fact there is a will in place makes the process a tad easier in most cases. Where a will is not in place, the process defaults to that of state or territory law.

Here’s a brief breakdown of the different processes.

Process with a Will

When a will is in place, an executor will be named to execute the wishes of the estate. Each state has their own process, but generally the executor or a lawyer will need to:³

1. Prepare the required documents
2. Lodge an intention to apply for probate at the relevant court
3. Apply for a Grant of Probate by sending the original documents to the court after a set waiting period has passed

If you are living abroad and are named as the executor, you may be expected to return to Australia at some point to finalise the estate administration.

Process without a Will

When someone dies without a will in place, they are known to have died intestate. Each state or territory has their own intestacy laws which lay out who gets what from an estate. Usually this will be an existing spouse or any children.⁴

What causes delays

Sometimes delays can happen. Some common reasons an estate administration could get delayed include:

• Disputes to the will
• Inaction by the executor
• Legal delays
• Conditional bequests in the will
• No will in place or is missing

In some cases, the liabilities may exceed the assets of an estate. This not only delays the administration but means any listed beneficiaries will not receive anything.

What can you do to smoothen the process from your side

Even though in most cases you can’t speed up the process, you can smoothen it by:

• Gathering the required documents promptly
• Working with the executor if you are just a beneficiary
• Following up if timeframes are missed
• Seeking legal advice where necessary

Although the processes may seem enduring, keeping calm throughout the process can be beneficial for all parties involved.

Documents needed for the estate administration

A beneficiary of an estate does not need to provide any documents to receive an inheritance. This changes if the beneficiary is also nominated as the executor of the estate. In this case, to they will need to gather⁵:

• The death certificate
• The Will
• Forms for a probate application
• The Grant of Probate

All documents need to be the original. Each relevant authority may request further documents at any time.

Taxes on inheritance in Australia

There is no inheritance tax in Australia. However, for foreign residents inheriting an Australian estate, capital gains tax (CGT) is owed as part of the estate distribution. This is because the asset being passed on is considered disposed of when the individual dies.

This rule does not extend to Australia tax residents, where CGT is only applied if the beneficiary decides to dispose of the asset after receiving it.⁶

Transferring inheritance abroad

Once all is said and done, you may want to send your inheritance abroad to your home country. The first thing you should know is that there are no limits of how much you can move overseas from Australia.

However, the method you choose may have different obligations. ⁷

Cash or non-cash methods

If you are planning to move more than $10,000 as cash or a monetary instrument such as a cheque, you’ll need to declare it at the border.

Bank or online remittance transfer

Another way to move your money abroad is by using a bank's international transfer service, or seeking out an alternative remittance provider. ⁷ While this method does not require you to declare your transfer to the Australian authorities, each provider may have their own limits and fees when making a transfer.

Keep in mind

While we’ve just touched on the differences in estate types, it’s important to remember that even if a will presents as straightforward, things can change during the inheritance process. This can draw out an estate distribution and push the process timeframes out significantly.

In conclusion

Navigating the inheritance process and timings can be complex, but understanding some of the basics can help prevent extra burdens during this time. It is also important to know that you should always seek professional or tax advice to guide you throughout the process.

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This article is purely for general information purposes and is not to be taken as financial advice. We recommend that you obtain independent financial advice before making any form of decision.

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Sources:

1. Aus inheritance law
2. Legal Simple and complex wills
3. Inheritance law process
4. Intestate process
5. Beneficiaries documents
6. ATO taxes on inheritance
7. AUSTRAC moving money

Sources checked on: 25 September 2024