The Role of a Beneficiary during Probate
19 August 2019
By Probate Solicitor, Kim Hammond
Beneficiaries aren't directly responsible for carrying out any of the work during the Probate process. This falls to the Executor or Administrator of the Estate. However, there are different categories of Beneficiary and each of these categories is entitled to a different level of information during Probate.
What Exactly Is a Beneficiary?
In the context of Probate, a Beneficiary can be defined as a person who receives some benefit from the Estate of the deceased. That benefit can either be under the Will, or under inheritance laws called the Rules of Intestacy if there isn't a valid will.
Where the deceased left a Will, gifts left to Beneficiaries fall into 3 different categories. This will determine when a Beneficiary receives their entitlement and their role in the Estate Administration.
The categories are:
- Specific gifts – this is the gift of an item, such as a car that the deceased owned when they passed away or shares in a specific company
- Pecuniary gifts – this is a gift of a specific sum of money – for example £30,000
- Residuary gifts – this a gift of what's left once all liabilities (debts), administrative expenses, specific gifts and pecuniary gifts have been paid.
When Do Beneficiaries Receive Specific Gifts?
Beneficiaries of specific gifts will often receive their entitlement shortly after the deceased has passed away, as this is often a physical item that is simply handed over to them by the Executors.
This may not always be possible however, for example, a Grant of Probate could be needed in order to realise or transfer the asset. In other situations, all assets in an Estate could be needed in order to settle the liabilities of the Estate, meaning that Executors cannot distribute any gifts to Beneficiaries.
Where a specific gift of an asset (such as shares or property) is given, the Beneficiary may choose whether they want the asset to be transferred to them or to be sold and the proceeds paid to them.
The Beneficiary of a specific gift is entitled to receive any income generated on the gifted asset from the date of death, meaning that if a property is rented for instance they will receive the rent. However, they will also bear any costs associated with the asset so will be responsible for council tax and utility bills. The Beneficiary may also be responsible for the costs involved in the sale of an asset or for any Inheritance Tax attributable to that asset, depending on the provisions of the Will.
When Do Beneficiaries Receive Pecuniary and Residuary Gifts?
Recipients of pecuniary and residuary gifts may have to wait a little longer to receive their entitlement. This is because it will often be necessary for a Grant of Probate to be issued by the Court before funds can be released and remaining assets can be sold.
There is a certain order in which the assets of an Estate must be distributed by the Executor. Once the liabilities are settled then pecuniary legacies take priority over residuary gifts, even if payment of the pecuniary gifts will leave little or no funds left to pay to Residuary Beneficiaries.
Executors should pay any pecuniary legacies within 12 months of the date of death, a period known as 'The Executor's Year' and where payment is made later than this the Pecuniary Beneficiary is entitlement to receive interest on their legacy.
The Role of Beneficiaries during Probate
Beneficiaries aren't directly responsible for carrying out any of the work during Probate, but different categories of Beneficiary are entitled to different levels of information.
Residuary Beneficiaries are, in many ways, the category of beneficiary with the biggest role in the Probate process. Because they are entitled to receive what remains of an Estate once all other payments have been made, they are entitled to see both a complete copy of the Will and the Estate Accounts. These accounts will show them a complete breakdown of how the sum they are receiving has been calculated.
Specific and pecuniary beneficiaries are only permitted to see the sections of the Will relating to their gift. Ultimately, the Executors of an Estate (or Administrators if the deceased died without a Will) are accountable to the residuary beneficiaries and are obliged to act in their best interests. This is especially relevant when it comes to selling property and realising assets where the value may fluctuate, such as shareholdings.
The Relationship between Probate Professionals and Beneficiaries
When a Probate Solicitor is instructed to administer the Estate on behalf of the Executors or Administrators, Beneficiaries may contact them for updates regarding the administration. However, it is important to note that the Beneficiaries are not the Solicitor's clients; the Executor is the Solicitor's client and the person to whom they owe a duty of care.
It is the responsibility of the Executor or Administrator of the Estate to update the Beneficiaries. In the event that a Beneficiary feels that an Executor is not administering the Estate correctly, they may take action against them. The Beneficiary must seek independent legal advice in order to do this.