What are my rights as a Beneficiary under a Will?

What-are-my-rights-as-a-Beneficiary-under-a-Will

A Beneficiary named in a Will of a deceased person is entitled to receive a copy of that Will.

A Beneficiary named in a revoked Will would usually have sufficient interest to be entitled to challenge the validity of a subsequent Will if the appropriate grounds for challenge exist (see Challenging a Will).

A Beneficiary is also entitled to know whether a Grant of Probate has been applied for and what stage the administration of the Estate is up to.

If there are likely to be any delays, the beneficiaries should be kept informed.  This does not mean that there needs to be constant contact or that beneficiaries need to be told everything that is going on. Common sense should prevail.

The Executor has a job to do and so long as they are getting on with that job they should be given the time they need without unnecessary interference from other parties.

As a general rule Executors should be allowed 12 months from the date of death to finalise a straight forward Estate.  Depending on the nature of the Estate assets and the manner in which they are to be distributed it may take longer than this. There are many reasons why it could be some time before the Executor is able to attend to transfers or otherwise distribute the Estate. Beneficiaries need to be patient throughout this process so that it can proceed in an orderly fashion.

Specific gifts of particular personal items can often be dealt with fairly quickly but if there are any disputes between family members the Executor will have to proceed with caution and that will slow the process down.

Transfers of real estate to beneficiaries should wait until the relevant challenge period has expired. Likewise, cash assets should be held by the Estate until the likelihood of a challenge has passed.

If there is a challenge, the Beneficiaries should be informed of the challenge and advised that the finalisation of the Estate will be delayed. Before settling any claim that has been made on the Estate, the Executor must get the consent of any affected Beneficiary.  A failure to do so may result in the Executor being personally liable to the Beneficiary for any loss.

In the case of Hodge v De Pasquale [2014] VSC 413, Her Honour, Judge McMillian determined that the Executor, who had settled a claim for further provision at mediation without the consent of the affected beneficiary, had acted beyond her authority.

The facts were that the deceased Giuseppe De Pasquale had left a Will appointing his second wife, Rosa, as Executor. The Will then left various properties to Rosa and two of his daughters Pia and Eleonora. His third daughter, Norina, was to receive the first $500,000.00 from the residuary estate. Any amount over $500,000.00 was then to be divided equally between the four beneficiaries.

Pia made a claim for further provision and at mediation, Rosa settled the claim by agreeing to pay Pia an additional $250,000.00. All of this amount was paid out of the residue effectively reducing Norina’s entitlement without impacting at all on the gifts of real estate that were going to Rosa and Eleonora.

Norina then brought a claim against both Rosa and Pia seeking to have the settlement overturned or failing that, the money paid out to Pia reimbursed to the Estate.

Judge McMillian concluded that Rosa had acted beyond her power as executor and trustee in paying the $250,000.00 to Pia and Rosa was personally liable to reimburse the Estate for that sum.

Rosa was also ordered to pay the costs that Norina had incurred in seeking the repayment.

This case has serious implications for Executors and reinforces the importance of keeping beneficiaries appraised of matters that will impact on their entitlements and involving them in any settlement negotiations if necessary.

If there is no challenge a beneficiary should expect that the finalisation of the administration of the Estate will proceed in a timely manner once the challenge period has expired.

A Residuary Beneficiary is entitled to know how the value of their share of the Estate has been determined.  The executor should provide them with a copy of the Estate Inventory and the Statement of Receipts and Payments which will show all the transactions undertaken.

If appropriate Residuary Beneficiaries should be consulted about whether they wish to receive their share of the Estate assets in specie or whether the assets should be sold and the proceeds of sale divided up instead.

If a Beneficiary is dissatisfied with the Executors performance they can apply to the Court to have them removed. The court will not do this unless there are compelling reasons, but in some circumstances, it may be necessary. For example, if there have been undue delays or the Executor has neglected their duties, or if the Executor is not acting in the best interests of the Estate, the Court would consider removing them.

Article By: Ann Eagle