When Does a Beneficiary Receive Assets from a Will?
20 January 2017
This is a question which we are commonly asked by customers when they use our fixed fee Will writing service. It’s a practical question and the answer helps people understand more about the process of administering their Estate after they’ve died.
Firstly, it’s important to understand that the person (or people) with the responsibility of distributing your Estate under the terms of your Will are called your Executors. When writing your Will with Co-op Legal Services, we’ll discuss the Executor’s role with you and help you decide on the most appropriate person in your circumstances.
Your Executors are also responsible for dealing with other aspects of your Estate such as ascertaining what assets and liabilities you have and the value of them. This information is required by HM Revenue & Customs (HMRC) as they want to know the value of your Estate after you’ve died to see if any Inheritance Tax is applicable.
Then, depending upon what you owned, your Executors may need to apply for a Grant of Probate. This is a process whereby the Court recognises the appointment of the Executor in the Will. Once the Grant of Probate has been issued by the Court, third parties, such as banks, building societies and the Land Registry can see who has the legal authority to deal with assets held in the deceased’s name.
Your Executors will then need to actually deal with your assets in accordance with the terms of the Will. There are different types of gifts that can be left in a Will. There could be specific items given such as “my gold watch” or there could be a fixed cash gift such as £1,000 to a favourite charity.
The Will should also deal with the residue of your Estate and this means the rest of your Estate (whatever that may be) after all other gifts have been made and all your liabilities have been paid off. Residuary gifts are typically to just one person or a number of people, equally or in percentage shares.
Depending upon the type of gift that has been made is likely to influence when the beneficiary receives it. The Executor has a year to distribute specific gifts and cash legacies but it usually takes place a lot earlier than that. Specific gifts, such as personal items, are normally distributed first.
Cash legacies can only be distributed once the Executor has collected in sufficient funds from the assets of the Estate to make the payment. If there is very little cash available in the Estate, then assets will need to be sold before it can be paid. The residue of the Estate is always paid last and that’s because the Executor needs to be sure that all outstanding liabilities and administration expenses have been paid before being able to calculate the amount the residuary beneficiaries are due to receive.
Sometimes it’s possible for an interim distribution to be paid to residuary beneficiaries where the Executor is holding excess funds significantly greater than any possible liabilities that could be owed.
Your Executors carry a personal liability to make sure that your Estate is dealt with properly and this means that they have dealt with all matters before making the final distribution to residuary beneficiaries. If they get it wrong then they may have to correct it out of their own pocket. So it’s very important that they get it right. This can take some time to do, and on average it takes about nine months to complete the process. It’s also a common reason why many Executors choose to instruct our Probate Solicitors to administer the Estate on their behalf, giving them the peace of mind that it’s all being done properly.
There are other factors which can influence the length of time it takes to distribute an Estate such as being unable to sell any property in the Estate. This can take some time, particularly if the property market is less buoyant than previous years. Also, it’s possible that someone may want to contest the Will or bring a claim against the Estate on the basis that they feel they haven’t been left a sufficient amount under the Will.
These type of issues are likely to impact upon when the Estate can be distributed to beneficiaries because the Executor will need to know the outcome of any claims to ensure that they distribute the Estate to the right people.
Finally one factor that can certainly delay your beneficiaries receiving their inheritance is dying without a Will in place at all. This often causes confusion about who is entitled to what from an Estate, but also who has the legal right to deal with the deceased’s assets.
Making a Fixed Fee Will with Co-op Legal Services is straightforward and affordable. You also get expert help from a brand name you know and can trust.