There’s lots of information available about the importance of having a Will and being able to control where your estate passes once you pass away. But this is only one side of Wills. What happens when the Will comes into effect on death? What do the beneficiaries of the Will need to do and what can they expect?
Below are a few of the terms used when administering an estate and carrying out the terms of a Will:
- Executors: people in charge of ensuring the estate debts are settled and the terms of the Will are carried out. Executors are appointed by the person who made the Will; and will usually be stated within the first few paragraphs of the Will.
- Beneficiary: these are the people in a Will who have been left something. This can be anything from treasured items to cash or property, and even land. It is the executors duty to ensure the beneficiaries received their gifts.
- Legacy: is a term used to describe a defined gift in the Will. It is clear what the legacy consists of. For instance gift of £10,000 or a car. Legacies are paid out after debts of the estate have been settled but before the Residue is paid.
- Residue: This is a term which means all of the assets of the estate after all debts have been paid (such as funeral costs, mortgages, bills etc); as well as after any legacies have been distributed. This can either pass to one person or can be split between numerous people in either percentages or shares. It does not specify set amounts like Legacies do.
Legacy Beneficiary (aka Legatee)
A Legatee will be informed by the Executors (or solicitors dealing with the estate if instructed) that they have been left a Legacy under the Will. Debts of the estate will be paid first so it’s unlikely that the beneficiary will receive their Legacy immediately. As a Legatee, you are not automatically entitled to see a copy of the Will straight away; it is also up to the Executor as to whether they give you a copy or not.
The Executors have a duty to the Legatee to make sure they get their legacy when possible; so you don’t need to worry if it takes a while to receive this. Often when solicitors are helping to deal with an estate the beneficiary will need to provide them with their ID to confirm their identity. Bankruptcy searches may also be carried out by the solicitors to ensure the beneficiary is entitled to the legacy. Once they are then in a position to distribute the legacy they will do so.
Residue Beneficiary (aka Residuary Beneficiary)
As a Residuary Beneficiary you may have to wait longer for your share in the estate. Residuary Beneficiaries will only be paid once all debts and legacies have been paid. All costs of administering the estate must be settled before any residue can be paid. Administration of an estate will vary depending on the assets; this could vary from months to over a year. If a solicitor is instructed they will be able to provide a rough idea of how long it will take.
At the beginning of administering the estate, if a solicitor is instructed then they may provide you with a copy of their terms of business and also a copy of the Will. As a Residuary Beneficiary you are entitled to see a copy of the Will from the start of the matter.
Much like the Legatees, Residuary Beneficiaries will also have to provide the solicitors administering the estate with their ID and the solicitors will carry out bankruptcy searches prior to making any distributions.
Although Residuary Beneficiaries are the last to be paid during the administration of an estate, depending on the size of the estate and the funds available, it may be possible for interim distributions to be made. However this is up to the Executors to decide.
Final Distributions
When the final distributions have then been made and the administration of the estate is completed, the solicitors may then provide you with a copy of the estate accounts which shows all of the assets and liabilities of the estate and the distributions that have been made.
As any type of beneficiary for a Will, there is not particularly much that you have to do and it is the Executors (or any solicitors instructed) job to ensure that you receive your Legacy or share of the Residue. It is not unusual for beneficiaries to ask for an update every now and then if they have not heard anything in respect of the administration of the estate.