By Probate Case Manager, Angela Mui
If money is tied up in assets that need to be sold (such as property or shares) then it will take longer to distribute than money that's sitting in a bank account. Also, if there are any claims on the Estate then these will need to be dealt with before Beneficiaries can be paid. In addition, Estate funds need to be distributed in a certain order, so some Beneficiaries may be entitled to receive their inheritance before others.
Usually interim payments can be made during the Probate process, but this is not always the case.
For free initial advice and guidance call our Probate Advisors on 03306069584 or contact us online and we will help you.
When Are Interim Payments Made?
We would normally look to make an interim payment to Beneficiaries once assets have been sold and there is enough money in the Estate to do so. As every Estate is different, it is difficult to say exactly how many months after a person's death it will be before Beneficiaries could expect to receive an interim payment.
It's also important to note that it is not always possible to make interim payments and the payments could be slightly delayed due to various factors, which will be looked at further in this article.
Beneficiaries – Order of Payment
The term 'Beneficiary' is quite broad, covering everyone that is set to benefit from the deceased's Estate, either under the terms of the Will (if there is one) or Rules of Intestacy (if there isn't).
If the deceased left a Will, then there are different types of 'legacies' (gifts) that they can leave to their Beneficiaries.
- Specific legacies (when a specific person is left a specific item)
- Pecuniary legacies (when a fixed sum of money is left to a particular person)
- Residual legacies (when the rest of the Estate – after all debts and other legacies have been paid – is left to one or more Beneficiaries)
When making payments, there is an order that needs to be followed and pecuniary legacies will be paid before residual legacies. For more information, see Legacies in Wills and Probate Explained.
With our Probate Complete Service we take full responsibility for getting Grant of Probate and dealing with the Legal, Tax (excluding VAT), Property and Estate Administration affairs.
What Can Delay Payments Being Made to Beneficiaries?
There are a number of factors that can delay payments from being made to Beneficiaries. We explain some of the most common reasons below.
Department of Work & Pensions (DWP) Claim
In cases where a deceased was in receipt of means tested benefits, for example pension credit, the Department for Work & Pensions (DWP) may bring a claim against the Estate and ask that the Estate funds are not distributed.
If this situation arises, the DWP will request a list of the deceased's assets. The purpose of the DWP's investigation is to compare the information about the deceased's assets to what they hold on their files. They will essentially want to check that they paid the correct amount of benefits to the deceased. While the DWP conducts their investigation, no distributions will be made to the Beneficiaries.
The reason for this is the amount owing, if any, will not yet have been confirmed. Therefore, the amount of money that will be left in the Estate for distribution to the Beneficiaries cannot yet be confirmed either.
Once the DWP investigation has concluded, they will write confirming this or they will confirm how much is due back to them. Once this has been settled, payments can then be made to the Beneficiaries provided there are sufficient funds to do so.
Claim under the Inheritance Provision for Family and Dependants Act
Under the Inheritance Provision for Family and Dependants Act (IPFDA), a person who has not received reasonable financial provision can bring a claim against the Estate. Only certain individuals are entitled to make this claim, and there is a time limit to do so of 6 months from when the Grant of Representation is issued.
In order to make a payment before the end of this 6 month period, measures will need to be taken to ensure that if a claim did arise, this could be covered. Usually, this would mean seeking indemnities from the Beneficiaries to confirm that they will reimburse the Estate should a claim be made.
In cases where such a claim is likely, we would normally advise that no payments should be made to the Beneficiaries until after the 6 months claims period has expired. If there is an ongoing claim against the Estate, the distribution of the Estate may be altered and therefore, no distributions can be made. However, if no such claims are likely, payments will usually be made to the Beneficiaries as soon as there are funds (as long as there is no DWP claim).
Statutory Notices/Early Distribution Insurance
When applying for the Grant of Representation, some form of protection can be taken to protect the person(s) named on the Grant against claims from any unknown creditors or claimants. The two forms of protection are statutory advertisements or Early Distribution Insurance.
Statutory advertisements are put in the London Gazette and also in the local newspaper where the deceased lived. The adverts ask anyone who believes that they are entitled to bring a claim against the Estate to come forward within 2 months. Therefore, if notices are placed, Beneficiaries would need to wait until the notices have expired after 2 months, before receiving a payment.
An alternative option to statutory advertisements is Early Distribution Insurance. This insurance dispenses with the 2 months waiting period. This means as soon as there are available funds, interim payments can be made to the Beneficiaries.
Often, the deceased's home will be the main asset in the Estate. If this is the case and the property is going to be sold, it may be that payments aren't made to the Beneficiaries until the sale has completed. The length of each property sale varies, but generally this can be expected to take at least a few months.
For more information, see How Long Does Conveyancing Take with No Chain?
Making Final Payments to Beneficiaries
After interim payments have been made, we will look to settle the final utility bills and resolve any outstanding issues. Once this has been done, final payments will be made to the Beneficiaries, provided that the above factors no longer apply.
To speak with a Co-op Probate Advisor call 03306069584 or contact us online and we will call you.