Death is never a fun topic to think about, but it’s important to be prepared for the worst. If you are named as a beneficiary in a will or estate, it can also be a confusing and overwhelming time. There are a lot of things to think about and take care of, on top of dealing with your grief.
As a beneficiary of a will or estate, early distribution insurance can be one of the key things to help you out financially. This is where the executor will distribute the estate before the claims notice period of the Inheritance (Provision for Family and Dependents) Act 1975 expires.
No doubt, that will help, but here are some things you need to know as a beneficiary of a Will/Estate:
What is a Beneficiary?
When you are named as a beneficiary, it means that you have been chosen to receive assets from the estate. The assets can be anything from money to property or even items of sentimental value.
In some cases, other family members may contest the will and this usually happens when there is disagreement about who should inherit what.
What kind of trusts is the beneficiary dealing with?
Another thing to be aware of as a beneficiary is the different types of trusts that may be set up. A trust is an arrangement in which one person (the trustee) holds property or assets for another person (the beneficiary).
The different types of trusts that could be created as part of an estate:
- Testamentary trust: a will creates a testamentary trust and only comes into existence when the person who created the will dies.
- Living trust: A living trust is created while the person who created it is still alive.
- Charitable trust: A charitable trust is created for the purpose of giving money to a charity.
- Special needs trust: A special needs trust is created for a beneficiary who has a disability.
What are the duties of an executor or beneficiary?
An executor is a person who is responsible for carrying out the instructions in a will. If you are named as a beneficiary in a will, you may also be named as an executor.
If you are named as an executor, it is your responsibility to:
- gather all of the assets that are mentioned in the will
- pay any debts and taxes that are owed by the estate
- distribute the assets to the beneficiaries according to the instructions in the will
You may want to hire a lawyer to help you with your responsibilities as an executor.
What if there is no will?
Foremost, it’s important to know that the process of obtaining a will can be complex. If the deceased person didn’t have a will, the estate will go through probate.
In order to obtain a will, you’ll need to finish these steps:
- Find the original will, if there is one. The executor of the estate should have this.
- If you can’t find it, check with the lawyer who created the will or the court where it was filed.
- Get copies of death certificates from the funeral home. You’ll need these to prove that the person is actually deceased.
Now that you have the will, you need to figure out what to do with it. This is where things can get tricky.
What Documentation Does a Beneficiary Need?
Necessary documentation is vital to the executor being able to do their job and distribute assets accordingly. For a beneficiary, the completion of documents in a timely manner is important to avoid any delays in receiving their inheritance.
The executor will also need to be provided with:
- A certified copy of the death certificate
- The original will, if there is one
- Any trusts that are part of the estate
- Insurance policies
- Bank account statements and investment records
- Real estate deeds, titles to vehicles, a list of debts and creditors, Income tax returns, pay stubs, and a list of all the beneficiaries.
Last but not least, being a beneficiary of a will or an estate can be a complex process.
But don’t worry, if you take things one step at a time, you’ll be just fine.
And if you have any questions along the way, be sure to ask a lawyer for help. There are many things to be aware of, but this checklist should help you through the process.