When dealing with Wills, you will come across the term ‘beneficiary’.
This article will explore the meaning of beneficiaries, types of beneficiaries, what rights they enjoy, and what beneficiaries can do in case a dispute arises.
Definition Of Beneficiary Of Will
A beneficiary is someone who is eligible to receive distributions from a Will. The beneficiary of Will is entitled to receive a portion of the deceased person’s assets or income.
When the person who has written the Will passes away, the beneficiary of Will is contacted and informed that they were named as a beneficiary.
The beneficiary of Will can be a person or a charitable organisation, depending upon the maker of the Will. In other words, beneficiary of Will could be loved ones like family and close friends, or a charitable organisation which upholds values and visions that are meaningful to the person making the Will.
Importance Of Beneficiary Of Will
When people pass away without a Will in place, oftentimes there are disputes that arise on how the deceased’s estate should be distributed.
To avoid disputes, it is ideal for the maker of the Will to clearly outline their intentions. In Australia, a high percentage of Wills are disputed.
Without beneficiary of Will, there will be high chances of misinterpretation around distribution of estates and property of the deceased.
Types Of Beneficiaries
1. Specific Beneficiaries: –
Specific beneficiaries only hold interest in a specific asset of the Will – this can include a number of things. For example, one house, a car or boat, etc.
2. Residuary Beneficiaries: –
Residuary beneficiaries are entitled to receive a share of the overall estate once all specific beneficiaries receive their share, and any outstanding debts of the estate are paid out.
Rights Of Beneficiary Of Will
- They are legally entitled to be notified if a valid Will was left by the deceased. While being notified about this, the beneficiary is also entitled to receive information on their exact entitlement from the estate, as listed in the Will.
- The beneficiary can also know about the nature and extent of the deceased estate.
- They have a right to receive the copy of a Will, if it has been requested from the executor.
- In case of any liabilities or taxes attached to the beneficiary’s entitlement, they have a right to be informed about them beforehand.
- The beneficiary is entitled to receive their share of the estate within 12 months after the Will maker passes away. In cases of delays, it is the obligation of the executor to inform the beneficiaries about the reason behind the delay.
- A beneficiary of Will does not have any legal right to arrange the funeral of the deceased. The beneficiary is supposed to consult with the executor, and make requests for the funeral, if required. However, the executor has no obligation to fulfil the requests made my the beneficiaries.
- In case of any disputes or challenges to the estate of the deceased, the beneficiary of Will should be made aware of the same as it can affect their share of the estate.
- The beneficiary of Will has the right to be informed about any legal proceedings against the deceased.
Information That Beneficiary Of Will Is Entitled To Receive
Depending on the estate that a beneficiary is entitled to receive, the information that he/she can legally obtain will differ.
For instance, specific beneficiaries receive only some specific gift or amount of money. In this case, they are not entitled to receive full information about the estate.
On the other hand, a beneficiary who receives a share of the estate, or the balance of the estate (residual beneficiaries) is entitled to receive full information regarding the estate.
The executor is required to provide all relevant information to the beneficiary of Will. If the executor fails to do so, the beneficiary may bring court proceedings against them.
What To Do If Disputes Arise?
As discussed above, it is quite common in Australia for disputes to arise between beneficiaries. This can happen in cases where a certain beneficiary feels like they should have received a greater share of the estate, than as stated in the Will.
In this case, the executor can attempt to settle the dispute, without feeling the need to involve the court. The executor always has to act on the best interests of the beneficiaries.
Secondly, disputes can also arise between beneficiaries and executors. For instance, in some extreme cases the executor may not distribute the entitlement to the beneficiary, or may not provide accurate information.
Disputes can also arise on how the executors interpret the Will. Lastly, disputes can arise between beneficiaries and the executor in cases of disagreements between the two.
Rather than approaching the court as the primary way to resolve disputes, it is always recommended that the beneficiaries and executors try to resolve these disputes via mediation and agreement.
The court should be approached only in cases where mediation does not help, and the disputes are still there.
Importance Of Legal Advice
Being named as a beneficiary of a Will can be overwhelming emotionally. Adding to this, there are a lot of important roles and responsibilities that need to be fulfilled by beneficiaries.
Having an overview about the rights of beneficiaries, as discussed in this article, can give you a fair idea about your responsibilities as a beneficiary.
Legal guidance is especially important because this is a stressful time for you, and having professional support to help you navigate through the responsibilities of being a beneficiary is important.
Furthermore, given the possibilities of disputes arising, it is important to get in touch with expert mediators who can help you resolve all disputes.
At JB Solicitors, our friendly family lawyers are well-equipped to deal with all aspects related to a Will, and are here to help you gain efficient legal advice on such matters.
Contact our expert lawyers today to receive legal advice in a friendly environment.