Information for Beneficiaries of an Estate
What is a beneficiary?
A Beneficiary is someone who receives an inheritance from a deceased person’s estate. If there is a Will, the Will sets out who will inherit the estate. If there is no Will, then the beneficiaries will be determined in accordance with the Rules of Intestacy.
The Executors or Administrators have a fiduciary relationship to all beneficiaries of the estate, meaning a relationship of trust. They are responsible for contacting all of the beneficiaries to notify them of their interest in the estate.
The Executors are the persons appointed in a Will to deal with the administration of the deceased’s estate. Where there is no Will, the Rules of Intestacy will once again set out who can apply to become the estate’s Administrator.
What type of beneficiary am I?
There are many types of beneficiaries within a Will and what type of beneficiary you are will determine how much information you will receive from the Executors in respect of the estate and what your rights are if that information is not provided:
Specific Bequests
Beneficiaries of these gifts receive a specific item (either money or a specific item of property). If that specific item is no longer owned by the deceased at the date of their death then this gift fails. For example the Will might say “I give all my jewellery to my daughter”. If no jewellery is owned at the date of the deceased’s death then the gift will fail.
Demonstrative Bequests
These gifts when set out in the Will often include the word “my” for example “I give £100 from my current account with X bank to my nephew”. If the current account with X is no longer owned by the deceased at the date of their death then it would become a general bequest and the £100 will be paid from other assets held by the deceased that have not otherwise been gifted through a specific or demonstrative bequest.
General Bequest
These gifts are paid out of the general estate for example, “I give £100 to my niece”. These gifts will be paid from general funds that have not otherwise been gifted through a specific of demonstrative bequest.
Residuary Bequest
Beneficiaries of these gifts receive their share of inheritance from the residue of the estate (what is left after all debts and expenses have been paid). This means that the amount the residuary beneficiary receives is not determined until the administration of the estate has been finalised, clearance obtained from HM Revenue and Customs in respect of Inheritance Tax, Income Tax and Capital Gains Tax, if applicable, and the Estate Accounts have been drawn up.
These residuary bequests are often the first to be reduced or even lost altogether if there is no residue left once all debts/specific/demonstrative and general gifts have been paid.