Receiving a Legacy: Everything you Need to Know
When a loved one passes away, an area that not a lot of people feel comfortable discussing, is the financial implications of the event. Many families may feel the strain of funeral costs and legal fees around the time of their loved one’s death. They may also feel ashamed for wondering if they may have been left some form of legacy that could ease their money worries.
At Anthony Gold, we encourage clients not to feel guilt or shame around the issue of money being left to them in a person’s will. Leaving a legacy is the final act of kindness that may individuals are able to perform, and a way to ease the impact of their passing by helping to alleviate the financial worries of their loved ones.
If you believe you’ve been left a legacy in a will, but unsure about how you will receive your legacy, who will pay it, or what the process is, we hope our comprehensive guide to receiving a legacy will help. With expert insights from our wills and estate experts, in this article we will cover all aspects of receiving a legacy, including what to do if you need a legacy to be paid quickly, or if a loved one hasn’t made sufficient provision for you.
How long does it take for a legacy to be paid to a beneficiary?
There are a number of steps which must be undertaken before an estate (everything left by a person who has died), can be distributed to its beneficiaries (those named in the will). The complexity of each case will affect how quickly each step can be completed, and therefore how long it will take somebody to receive their legacy.
Beneficiaries should note that where a will is contested, or there is an argument about how the estate is being administered, it can significantly increase the timeframe – in some cases by years. However, the average time that beneficiaries will normally wait to receive their inheritance is between 6 and 12 months.
How do I know if I’ve been left a legacy in a loved one’s will?
On the death of a relative, no matter how well-loved and respected, it is natural to enquire about whether one is left a legacy and how much. That normally isn’t a problem, although the process may seem very long-winded. In some circumstances, it is necessary to apply some pressure on executors to release information.
If a Will has been left, the executors will usually tell let you know if you are names as a beneficiary. In addition, once a grant has been issued, you can obtain a copy of the Will by applying to the Probate Registry, so that you can check the terms yourself. If there is no Will, the law determines who will inherit though the rules of intestacy. The rules of intestacy specify who can inherit the estate of a loved one, and typically includes spouses and other close family members.
It is vital to make sure that, in the event of your death, you have left an up-to-date will to determine how your estate will be handled, and who you will be leaving legacies to. For assistance with writing your will, as well as sound legal advice around the handling of your assets, have a look at our wide range of wills, trusts, and estate services. Our specialist team will be more than willing to assist you.
Types of Legacy
Once you have established that you are mentioned in a will, there are two types of legacies that you might be entitled to.
A specific legacy is when the deceased has willed an exact amount of money or a specified property to a beneficiary. These are the most common types of legacy, and may take the form of a lump sum payment, the deed to a property, or any other valuable assets such as cars or jewellery that the deceased would like to will to one specific individual.
A residual legacy gives you a share in the remainder of the estate after the debts of the deceased, and any specific legacies, have already been paid out. This is normally done between multiple people, who may have a share, for instance, of 50% of what is left after debts and other legacies have been paid. This 50% of the remainder of the estate will be their legacy.
What is the process of receiving a legacy?
Firstly, the individuals responsible for administering the estate need to be identified. These individuals will be appointed by the Will where one has been left, and are termed ‘executors’ of the Will. If there is no Will, an ‘administrator’ will be appointed to undertake the same role – usually, a close living relative.
The executor, or administrator, of the estate will then need to work out the value of the estate and pay any Inheritance Tax that is due. This must be done to obtain a Grant of Probate (executor) or Letters of Administration (administrator). This gives the appointed person the legal right to deal with the assets of the deceased, as well as access any bank accounts or financial documents.
The executor or administrator will also have the right to sell any property, usually in order to pay any outstanding debts belonging to the deceased. Once all debts have been paid, the final stage is for the executor or administrator to distribute the estate among its beneficiaries according to the terms of the will.
In a straightforward case, the grant will typically be obtained within 3 to 6 months of the person’s death, but it may be quicker. For example, if the estate is small (worth less than £5,000) and contains no land, property, or shares, then a grant may not be necessary.
However, delays may arise in the administration of an estate in more complex cases. For example, if beneficiaries cannot be located or if valuation of certain assets is difficult. If a financially dependent relative feels they have not been adequately provided for, or there is a challenge to the validity of the will, this can also cause significant delays.
A wait of more than a year may be due to unreasonable behaviour on the part of an executor or administrator. If the executor of the estate doesn’t appear to be meeting their responsibilities to the deceased, or beneficiaries, it might be worth seeking legal advice to force the executor or administrator to press on with the administration.
Who is in charge of making legacy payments?
The person in charge of gathering in the estate assets and then making distributions is normally the executor. In the case of an intestacy, an administrator performs the same role. These personal representatives of the deceased have a considerable amount of discretion as to when to make payments. This is partly because personal representatives can be personally liable if they pay out too much money.
Interim Distributions from Estates
What is an interim distribution?
An interim distribution is a grant or payment which can be made to a beneficiary, prior to the final administration of the deceased’s estate. For instance, if a beneficiary is in urgent need of funds, perhaps to cover funeral costs, or they are in financial dire straits.
Only in very exceptional circumstances will a personal representative make an interim distribution before a grant of probate has been obtained. The process of obtaining a grant can in some circumstances be complicated and lengthy. Before a full grant is obtained, it is necessary to value assets and prepare a tax return. There also normally has to be a payment of tax before the grant is issued. Except for some small estates, this can be a daunting process for the lay person who has been appointed as executor in the will.
If the tax form is done incorrectly, or if HMRC raises issues on the valuations, the process can become even more lengthy. It is for this reason that many people writing wills appoint solicitors to become the executor, or if a person is appointing an executor, they appoint solicitors as their agents to do this work. Even when a grant is obtained, there may then be limited liquid assets to distribute. If a property has to be sold, there can a further delay. We have seen rare cases where estates have not been distributed up to 20 years after an individual’s death.
Unless there are exceptional circumstances, it can be difficult to persuade a court to remove a personal representative in the first year after the death. However, if things are taking an extremely long time, then it is possible to apply to have the personal representative removed. The court will then normally appoint a solicitor, to get on the with the job quickly.
How can I apply for an interim distribution?
Even in more certain times, many of us from time to time are in urgent need for a cash injection. This may be due to a drop in income or unexpected expenditure.
Firstly, personal representatives do have a duty to consider reasonably any request for an interim distribution. Of course, they cannot conjure money out of thin air. However, if there is a bank account with surplus money, then they should really consider an interim distribution. Where it is quite clear that the person will be entitled to a legacy, for example, if the person is entitled to a specific legacy, and there is available money, then any request for interim distributions should be considered.
If the need is particularly urgent, it might be possible to obtain an interim grant, or even for the personal representative to borrow money against an asset in order to make an interim distribution. If a personal representative is not considering seriously a reasonable request, then advice should be sought. A letter setting out the legal duties that the personal representative is subject to can be effective.
In other circumstances, it is possible under the Inheritance (Provision for Family & Dependants) Act to issue a court action in order to obtain an interim distribution. We will cover this in more detail below.
What to do if a legacy hasn’t been paid
If you are expecting a legacy which is not paid, then you may be able to take action against the executors/administrators. This will force them to give you an account of all the assets and liabilities in the estate, or to deal with the matter more quickly. Unfortunately, we sometimes deal with claims where money has actually been taken by the executors/administrators when it should have been paid out to other people. In instances like this, you may need to make a claim against them to have the money repaid.
If you require advice about a legacy, or the administration of an estate which may require Court action, please do not hesitate to contact a member of our Contentious Probate team.
Obtaining a legacy where there is no will or if you have been left out of a will
If a loved one for, has died without leaving a will, or having left a will which makes either no provision or, in your view, insufficient provision for you, you may still be able to claim a legacy, or greater legacy from their estate. The Inheritance (Provision for Family and Dependants) Act 1975 (“the Inheritance Act”) provides a statutory basis on which a spouse, partner, family member or dependant of a person who has died can make a claim against the deceased’s estate in these situations. In other words, you can bring a claim under the Inheritance Act if you seek to become either a beneficiary or a larger beneficiary and, in doing so, bring about a redistribution of the estate.
Who can make a claim under the Inheritance Act?
As things currently stand, the classes of persons entitled to bring a claim under the Inheritance Act are as follows:
- A surviving husband, wife or civil partner;
- A former husband, wife or civil partner who has not remarried;
- A person who has cohabited with the deceased for at least 2 years immediately prior to his or her death;
- A child of the deceased;
- A child of the family; and
- Any other person treated as a dependant.
Inheritance Claims by spouses and cohabiting partners
In a claim brought by a surviving spouse, the court will often have regard to what the applicant would have received had the marriage or civil partnership ended in divorce or dissolution, rather than death. Whilst a recent marriage or civil partnership can result in a smaller award, the premature termination of a marriage or civil partnership by death is likely to be less important than it would be in a divorce.
A claim by a former spouse can be difficult to justify, as any existing divorce settlement can usually be expected to have made provision for them. There can, however, be exceptions, such as where inadequate provision was made for the former spouse, or where the couple have moved back in together, or where the divorce settlement provided for the claimant to receive periodical payments.
For a claim to be made by a cohabitee, they must have lived together in the same household for at least 2 years and lived as husband and wife, or as civil partners, in an acknowledged relationship. The 2-year period must be unbroken.
Inheritance Claims made on behalf of Children
Claims can be made on behalf of children who are minors, as well as adult children. Claimants can include adopted children, although adopted children cannot usually make claims against the estates of their natural parents. Claimants can also include a person who was treated by the deceased as a child of the family, either as a result of a marriage or civil partnership, or as a result of the deceased standing in the role of parent.
Awards made to children will vary enormously depending on their age (with younger children, with more years until they reach adulthood, being deemed to have a greater need), the size of the estate, and the intentions of the deceased. Claims by adult children can be more difficult to prove, although the court will take into account the same factors as it will when considering the claims of other categories of claimant, which we will discuss next.
Inheritance Claims made by Other Dependants
A person may be able to make a claim as a person “treated as a dependant”, even if they did not have one of the relationships with the deceased identified above. A person claiming as a dependant, however, will only succeed if the deceased, until the time of their death, had been making a substantial financial contribution towards the claimant’s maintenance. This does not include financial contributions made by the deceased pursuant to a commercial arrangement, such as salary payments made to a professional carer or housekeeper.
For persons falling into the above categories of claimant, there is no automatic right to financial provision. Any claim brought under the Inheritance Act will require the court to carrying out a balancing exercise. This usually involves, amongst other things, an analysis of the relationship which the claimant had with the deceased, the size of the estate, and the competing needs of the claimant and any other beneficiaries of the estate.
Further, as a first step, there are two basic criteria which must be satisfied in order for a claim to be made. Firstly, the deceased must have been domiciled in England and Wales at the time that they died. Secondly, Court proceedings brought under the Inheritance Act should be issued not more than 6 months of a grant of representation (i.e. grant of probate or letters of administration) by the Probate Registry. The court can, however, and frequently does, extend this limitation deadline, although this cannot be relied on.
We hope that this guide to receiving a legacy has been helpful, and answered some of your most pressing questions. If you have any concerns about an existing will or legacy, or would like some legal advice regarding your own will, or that of a loved one, you can request a callback with a member of our team. They will be able to discuss the particulars of your case, and provide expert guidance on how best to proceed.
For further insights from our legal team, you can browse our full range of articles online. Or, to learn more about the wide range of legal services we offer, feel free to visit our site for more information.
*Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*