You might be wondering what it means to be a beneficiary of someone’s Will if you have just lost a loved one.
This is a common issue, especially if you do not know what your rights are, what to expect, or what to do next.
As a beneficiary, you could receive money, property, personal belongings, or other assets from the estate of someone who has left it to you in their Will (the testator).
If there is a valid Will in place, the executor is responsible for making sure the estate is distributed according to the testator’s wishes.
Types of beneficiaries
There are a few different types of beneficiaries, and it helps to understand the difference:
- Specific beneficiaries – named individuals or organisations who receive a particular item or sum of money
- Residuary beneficiaries – people who receive a share of what is left after debts, funeral costs, and specific gifts have been paid.
- Contingent beneficiaries – those who only inherit if a certain condition is met
What rights do beneficiaries have?
If you are named as a beneficiary, you have the right to:
- Know that you are a beneficiary
- Know roughly what you are entitled to (if the estate is valued and debts are settled)
- Receive your inheritance within a reasonable timeframe
However, you do not have the right to demand immediate payment or interfere with the executor’s role.
The estate must be properly administered first, which can take several months or more, depending on complexity.
Can a beneficiary see the Will?
Yes. Once probate has been granted, a Will becomes a public document.
Any beneficiary can request a copy of the Will if they have not already received one.
Before probate is granted, the Will is usually only shared with the executor(s) and solicitor involved.
Do beneficiaries pay tax on their inheritance?
Any income the estate receives during the administration period (such as bank interest or rental income) is subject to Income Tax at estate rates.
This tax is paid out of the estate before anything is distributed to the beneficiaries, so it does not fall to the beneficiary personally.
Beneficiaries who pay Income Tax on their own income at a rate lower than the estate can try and reclaim the tax paid on their proportional share of any income subsequently paid to them on distribution.
What if the beneficiary does not need or want the inheritance?
Sometimes a beneficiary may decide they don’t want to keep all or part of their inheritance, often because they’d rather it went to someone else, such as their children.
One option is to use a Deed of Variation. This allows a beneficiary to redirect their inheritance to another person. It must be signed within two years of the person’s death and can have tax advantages in some cases.
Another option is a Deed of Disclaimer, where the beneficiary simply refuses the inheritance. They don’t choose who it goes to, it just falls back into the estate and is dealt with according to the Will or intestacy rules.
Some people also choose to give their inheritance to charity, which can usually be done tax-free.
These decisions can have legal and tax implications, so it’s worth taking advice before going ahead.
Need help understanding your position as a beneficiary?
Dealing with a Will and inheritance can be confusing, especially when emotions are running high.
Our friendly team of Wills and Probate specialists can help you cut through the noise guide you every step of the way to understand your position as a beneficiary.
Contact us today for an initial conversation, we are happy to help.