What is a Beneficiary of a Will

If you are a beneficiary of a Will, it means that the person concerned wishes you to receive part or all of their estate following their death.

An individual making a Will can bequeath their assets to whomever they wish, and there is no obligation on them to inform someone that they are a beneficiary or what the value of their inheritance is.

Following the death of the individual, all beneficiaries will be contacted by the executor, who will arrange for them to receive their inheritance.

There are different categories of beneficiaries, each with its own legal rights.

Specific: This applies when someone has left a specific item in the Will (e.g. a necklace or painting). Should the item have been given away before the individual’s death, the beneficiary could not receive it and neither would they be entitled to a substitute item from the estate.

General: This happens when an individual is bequeathed a certain sum of money from the estate. For example, if you have been left £10,000 this could be paid from any part of the estate (such as a bank account) that has not been specifically bequeathed to others.

Demonstrative: This occurs when the beneficiary has been left a specific gift, such as £2,000, from a particular bank account. Should there not be sufficient funds in the account, the individual can receive their inheritance from elsewhere in the estate. This would mean that the individual becomes a general beneficiary.

Residuary: This category entitles the beneficiary to a share of the final estate after all other liabilities have been paid out. A person entitled to a share of the residue or residuary estate is known as a ‘residuary beneficiary’.

These categories are especially important in cases where an estate does not have sufficient assets to pay out all its bequests. In these instances, the law sets out an order of priority:

• Firstly, specific and demonstrative beneficiaries
• Secondly, general beneficiaries
• Thirdly, residuary beneficiaries

We can see from this that residuary beneficiaries are at particular risk of losing their inheritance should there be a shortfall within the estate. Most people’s main beneficiaries are residuary beneficiaries. As these are most at risk if there is not enough money available and so for this reason it is important to review your Will at least every 5 years.

There is, however, an official procedure that has to be carried out before any assets can be distributed; this is known as probate and the process will be outlined below.

The length of time it takes to receive your inheritance may vary depending on the size and complexity of the estate and the capacity of the executor to progress the process in a timely manner. It is likely, for example, that a solicitor who specialises in probate law will operate more speedily than a relative who is still grieving the loss of a loved one and combining their role with work and family commitments.

Beneficiaries should be aware that their right over their inheritance only takes effect when the estate is distributed. For example, they cannot take possession of a car they have been bequeathed following the death of the individual – they must wait until ownership has formally been transferred to them by the executor.

Although someone who has drawn up a Will is under no obligation to inform people that they are beneficiaries, in practice, this will often happen on an informal basis, often at the beginning of the administration of the estate.

As far as the legal process of probate is concerned, however, it is the duty of the executor of the Will to notify beneficiaries.

The law does not specify when during the probate process, the beneficiaries should be informed. In cases where Wilson Browne is acting as the executor, however, we would inform the beneficiaries at an early stage of the process and keep them updated throughout probate.

When an individual draws up a Will, they appoint an executor to ensure that their estate is distributed according to their wishes.

The executor can be a relative or friend, although many people prefer the peace of mind of having a solicitor carry out the role. There only needs to be one executor, although the law allows for up to four. It is a good idea to appoint two so they can share responsibilities and in case one of them dies.

Following the death of an individual, the executor usually has to apply for a grant of probate which gives them the legal authority to disperse the estate in line with the terms of the Will (probate may not be required for estates under the value of around £5,000).

They are responsible for gathering together all of the deceased’s assets, paying any debts and then distributing the remaining assets as set out in the Will.

The executor has a legal duty to act in the best interests of the beneficiaries to ensure they receive their rightful inheritance and should keep meticulous records of all assets received and paid out.

It is both lawful and common for the executor of a Will to also be a beneficiary. Some argue that this is actually desirable as it provides the executor with an incentive to distribute the estate as quickly and efficiently as possible.

Where the executor of the Will is a beneficiary, however, they must act in the interests of all beneficiaries and not just themselves.

In addition, it is very important to be aware that anyone who acts as a witness to a Will cannot also be a beneficiary.

When an individual draws up a Will, it remains confidential during their lifetime. A solicitor who has helped to draft the Will (and who may also be storing it for the individual) will not disclose its contents to anyone.

While some people may choose to inform their beneficiaries of what they are to receive, there is no legal obligation for them to do so.

Following the death of the individual, the executor is entitled to see the Will but has no legal obligation to share it with the beneficiaries (although in practice, they may well be happy to do so).

The situation changes if, as is usually the case, the executor has to apply for a grant of probate in order to administer the estate.

Once probate has been granted, a copy of the Will is held by the government on public record. As well as being informed by the executor of what their inheritance is, a beneficiary (together with any member of the public) can view the will online or order a copy through the post to see its terms in full.

In theory, a Will may never be made public should probate not be required.

When an individual draws up a Will they normally have the right to subsequently remove or add beneficiaries to their Will or alter the amount that a beneficiary will receive.

This flexibility can be seen as a positive thing – people’s circumstances are likely to change during the course of their lifetime, and it is important that they are able to reflect this in their will.

Reasons for adding or removing a beneficiary from a Will may include:

• changes in their financial circumstances (e.g. rising house prices can significantly increase the value of an estate over time)
• changes in their family circumstances (e.g. divorcing and having more children with a new partner)
• forming new friendships

A beneficiary may be added or removed either by amending an existing Will or drawing up a new one – a solicitor will be able to advise on which option is most appropriate.

At Wilson Browne, we pride ourselves on forming long-term relationships with our clients so that we can ensure that their Will continues to reflect their wishes.

As part of this commitment, we will future-proof your Will as much as possible to take account of potential future changes.

In addition, we offer free Will health checks to enable you to consider if any changes need to be made or if a fresh document should be drawn up.

There is one scenario in which an individual may be unable to make changes to their Will during their lifetime – this is if they have a mutual Will.

This may happen, for example, if a husband and wife want to ensure that the surviving spouse is not able to disinherit their existing children should they remarry and start a new family. On the death of one of the Testators, the remaining Testator cannot alter their Will.

As this is a specialist area of law, we advise that you seek legal advice should you have any queries in this area.

Following the death of an individual, it may still be possible for a beneficiary to remove themselves from the Will with a deed of variation.

This is a legal device that enables the beneficiary to redirect assets which had been bequeathed to them to another party (who does not need to have been included in the original Will).

Reasons for doing this include:

Correcting a perceived injustice – for example, the beneficiary may feel another person has been unfairly left out of the Will and be keen to ensure that they receive an inheritance

Reducing tax liabilities – for example, an individual may be intending to leave their inheritance to their children. Using a deed of variation to pass the assets to them could ensure that inheritance tax is only paid once rather than twice.

Setting up a trust – some of the beneficiaries may wish to set up a trust; for example, to protect the interests of a child. If the Will has not made provision for this, a deed of variation could be an effective way of enabling the trust to be established.

Gifting additional assets to charity – by gifting 10% or more of the net estate to charity, a lower Inheritance Tax Rate of 36% benefits the estate.

There are other ways in which a beneficiary could lose their inheritance following the death of the individual who drew up the Will.

These include:

• the intended beneficiary has been declared bankrupt
• there is a successful legal challenge to the Will (e.g. the Will was not drawn up in a proper manner)

At Wilson Browne, we appreciate how emotive the subject of inheritance can be, entailing as it does the distribution of valuable assets at a time when people are grieving the loss of a loved one.

Whether you require help in drawing up and executing your Will or want advice on your rights as a beneficiary, we pledge to use our professional knowledge and personal empathy to offer guidance and support with expertise and integrity.