As a beneficiary, you may have many questions about how receiving your inheritance will work and what terms and conditions need to be met before anything can be released to you. Here are five things that all beneficiaries should know!
1) There Are No Rules For When Beneficiaries Should Be Notified
Although it is good practice for executors to notify beneficiaries early on, there are no rules around this and it may take several weeks or even months for people to learn about their inheritance.
The estate administration process is the period from the date of the testator’s death to when the final payments to beneficiaries can be made. This process involves closing bank accounts, paying debts, and paying inheritance to any beneficiaries named. This can be a lengthy process, and beneficiaries can be notified at different times depending on the executor.
Some executors may contact the beneficiaries very quickly and keep them updated throughout the estate’s administration. Others may only get in touch with all beneficiaries once they are ready to make payments from the estate – known as making distributions.
2) There Are Different Types Of Beneficiaries
There are several different types of beneficiaries that can be split into four different categories:
- Specific – if you have been left a specific item in a Will, such as a car or a piece of jewellery, you would be known as a specific beneficiary. However, if the item was given away or sold while the testator was still alive, you would not be entitled to a replacement from the estate.
- Demonstrative – if you have been left a gift from a specific source, such as if you were left an amount of money from a particular bank account, you would be considered a demonstrative beneficiary. If there is not enough money from this source, you would be entitled to money from the rest of the estate and therefore considered a general beneficiary.
- General – when you have been left something that can’t be specifically identified, you would be known as a general beneficiary. For example, if you have been left a sum of money, this does not have to be paid from a specific source and could come from a bank account, investment portfolio, or life insurance.
- Residuary – those who have been left a percentage of the estate after all debts and liabilities have been paid are considered residuary beneficiaries.
If there is not enough left of the estate to pay all of the gifts left in the Will, residuary beneficiaries are the first to lose their rights to the inheritance. The specific and demonstrative beneficiaries would be prioritised, and then the general beneficiaries.
3) Beneficiaries Can Receive Payments At Different Stages
You may receive the items willed to you at different stages depending on which type of beneficiary you are. Specific beneficiaries tend to receive their items early in the estate administration process, and general and residuary beneficiaries often need to wait until debts are settled and probate is granted before they receive anything.
There can be many delays to the estate administration process that complicate things, such as:
- Delays obtaining a Grant of Probate
- Delays in administering the estate after probate has been granted
- Difficulty locating beneficiaries
Generally, beneficiaries can expect to receive their inheritance anywhere between one and nine months, although delays can extend this period. However, residuary beneficiaries may receive their inheritance in stages, for example, receiving part of it once the bank accounts have been closed and the rest when the estate has been settled in full.
4) Beneficiaries Can Change Parts Of A Will After Death
In some cases, named beneficiaries may want to pass some of their inheritance onto someone else or change the Will to lower the amount of Inheritance Tax that is payable on the estate. In this case, beneficiaries can change the Will in what is known as a Deed of Variation.
To create a Deed of Variation, all beneficiaries named in the Will must agree to the changes proposed, and they must not be left worse off after the changes. Deeds of Variation must also be completed within two years of the testator’s death. This can be complicated, so seek legal advice before making any changes.
5) Wills Can Be Challenging To Find
Sometimes, finding your loved ones Will is not easy. There is no one place where Wills are kept – people can choose to keep them at their bank, home, or solicitors. If you are struggling to locate a Will, try the following steps:
- Search your loved one’s property – a Will can be stored anywhere, from a filing cabinet to the loft or under a bed. Make sure to check everywhere you can think of within your loved one’s house.
- Check with the bank – banks do not offer storage facilities to customers as much, but it is worth checking to see if they have it.
- Ask around – check with friends and family to see if your loved one told them where they stored it.
Being a beneficiary may not come with as many responsibilities as being an executor; however, there are things that you need to know about the process.
Making a Will is vital to ensure that your loved ones receive the gifts you want. Without one in place, your estate would be subject to the rules of intestacy, and you would have no control over who benefits.
Create your Will today with The Planning Bee – get in touch with our team of experts today for a free consultation.