Finding out you're the beneficiary of someone's will can stir up a whirlwind of emotions: grief, gratitude, confusion, even concern. Whether you've been waiting for your inheritance to drop or have been taken entirely by surprise by an unexpected gift, being a beneficiary of a deceased estate comes with some rights, a few responsibilities, and plenty of questions.
What's the difference between a beneficiary and an executor?
Beneficiaries are people or organisations named in a will, or according to the rules of intestacy, to inherit assets from an estate. Beneficiaries don't have control over the management of the estate.
The executor of an estate is the person appointed in a will to carry out the wishes of the will-maker. The executor handles funeral arrangements, lodges a tax return, completes paperwork (so much paperwork), cancels services, applies for a grant of probate, arranges the sale of assets, pays outstanding debts, and distributes to beneficiaries. You can find out more about being an executor HERE
It's common for a trusted child or spouse to be both the executor and a beneficiary of an estate. Depending on the estate and the people involved it can get complex, particularly if disagreements arise, but legally, there's no conflict of interest to wear both hats.
Do beneficiaries have any say in how an estate is managed and what if I disagree with the executor?
Beneficiaries do not have the legal authority to make decisions around the estate. Essentially, their role is to sit back and let the executor do all the hard work.
That being said, it's not the job of the executor to play God. They must act fairly, in good faith and in the best interests of the beneficiaries at all times.
We work hard to ensure executors include beneficiaries in decision-making and maintain open communication throughout the process, but life doesn't always follow a drama-free path. If, as a beneficiary, you don't agree with how the executor is going about finalising the estate, if they're taking too long, refusing to communicate, or are making decisions that seem unfair or self-interested, you have every right to seek legal advice.
Read more HERE about common executor red flag behaviour and when to seek legal advice.
How will I know if I'm the beneficiary of an estate?
We've all seen the movies where a family solicitor summons estranged family members to a plush office with leather chairs and boxes of cigars for a ceremonious, albeit tense, reading of a controversial will (then again, maybe I'm watching different movies than you).
In real life, it's not like that. At least not the circles I find myself in.
There's no formal "reading" of the will these days (yes, people are often disappointed that this isn't part of my estate management service), instead, the executor or a legal representative for the executor informs the beneficiaries directly, and a copy of the will may be shared with those who are entitled to see it.
Finding and notifying beneficiaries is a much harder job than you may imagine. Often, wills have been written years prior, and beneficiaries may have moved, died, or become estranged from the will-maker.
If you suspect you're a beneficiary and haven't heard anything, you can request a copy of the will if you're an eligible person under the South Australian Succession Act.
What if you've been left out of the will but think you have should have been a beneficiary?
Under the Family Provision section of the South Australian Succession Act, you may be able to challenge the will if you were financially dependent on the deceased or had a close relationship. Strict time limits apply, so you're better to seek legal advice sooner rather than later.
How do beneficiaries get decided if there's no will?
Half of all South Australians die without a valid will (the fancy legal word is 'intestate').
If you or someone else dies without a will your estate will be distributed according to the rules set out in the South Australian Succession Act. While the act tries to be fair, and accommodate the most common relationship scenarios, chances are high your estate will be distributed in a way that may not line up with what you would have wanted.
You can read more about who gets what according to the laws of intestacy HERE.
How long will it take for me to get my inheritance?
If you're the beneficiary of a simple, well-organised estate, it may take 6-12 months for the executor to distribute your inheritance.
If the estate is complex, there are significant debts or high numbers of assets to be managed, if the executor doesn't act quickly or there are other delays due to tax returns, property sales, or challenges to the will it may take years for you to receive your inheritance.
Can I refuse to accept my inheritance?
It's not unusual for a beneficiary to disclaim a gift left to them in a will due to sentimental reasons, impracticality, financial planning, or the desire to pass the gift to another beneficiary.
It will depend on the terms of the will as to how your portion of the estate will be distributed if you disclaim. I encourage you to seek legal advice around your options if you don't wish to accept an inheritance.
Do I need to pay tax on an inheritance?
In South Australia, there's no death or inheritance tax. However, there may be other tax liabilities or complexities according to how and when you receive your gift.
I strongly recommend all beneficiaries receive financial and tax advice around their inheritance from a professional experienced in deceased estates. In particular, if you are being given the opportunity to receive your inheritance through a Testamentary Trust.
What happens if children are beneficiaries?
The will determines how gifts should be managed for children under 18. As a general rule, gifts are held in trust until they reach 18 (or an alternative age outlined in the will), with an adult (often the executor) managing the funds on their behalf.
Do I still get my inheritance if I'm named in the will but there's no money left?
In my years as an estate lawyer, I have heard many stories of people who have been promised the world by the will-maker, only to find that after debts and liabilities have been paid, their inheritance adds up to zero.
Before an estate can be distributed, the executor needs to have paid ALL outstanding debts. If there's not enough to go around, you may receive less than expected. Or nothing at all.
Can you help me as a beneficiary?
Being a beneficiary can be super exciting, but it can also be daunting. If you're feeling unsure about an estate you are a beneficiary of, are wondering what your rights are, or wish to speak to me about inadequate family provision or an estate dispute, make an appointment today.
It's your inheritance, we'll help you protect it.