How long do executors have to pay beneficiaries?

Below, we give an idea of the types of gifts, or legacies, that can be given in a will, a rough timeline you can expect, as well as the issues that might delay payment.

What is a beneficiary of a will?

If you’re a beneficiary of someone’s will, it means you have been named to inherit all or part of their estate.

The types of legacies you can be given to inherit in a will fall under the following categories:

• Specific: this gift is something identifiable, a gold Rolex watch belonging to the person that died, for example.
• Demonstrative: a sum of money that is be taken from a specified place, like the sales generated from shares of a company they held.
• General: a sum of money that is to be taken from an unspecified place, like the bank account of the person that died or generated from selling their assets.
• Residuary: after funeral costs and tax have been paid, as well as specific, general and demonstrative gifts, the remainder of the estate is distributed among the person’s relatives.

What is an executor of a will?

The executor is the person responsible for distributing assets to beneficiaries, paying taxes, and covering any outstanding debts. If the person who died left a will, the executor will be named in this. If there is no will then the person responsible for doing this is called the administrator and is usually the next of kin.

The executor or administrator is the only person who has the legal authority to carry out this work, and they are accountable for any mistakes made during the process.

How long do the executors of a will have to pay beneficiaries?

It will take time for beneficiaries to be paid. For example, beneficiaries might receive inheritance within 6 months for an estate that has no property and a single bank account. Typically, it takes between 6 and to 12 months, but this varies depending on the complexity of the estate.

The executor will need to collect and document the person’s assets, complete any necessary tax forms, and then apply for probate. Once this has been done, and all the debts of the estate have been settled – missed rent payments, credit card debt, utility bills, funeral costs, etc – the executor can begin the process of paying the beneficiaries.

What order are beneficiaries paid in?

The order of priority for distributing the estate among beneficiaries is dictated by the type of gifts. If specific sums of money have been left to the beneficiaries, then these must be paid first. The remainder of the estate, known as the ‘residuary estate’, will then be paid to the beneficiaries.

There is a legal rule, known as the ‘executor’s year’, meaning all pecuniary legacies (beneficiaries left a specific sum of money) are expected to be paid within a year. If they are not, they are entitled to claim interest.

If there isn’t enough money in the will to pay all the gifts, the residuary beneficiaries will be the first to lose their gifts, then the general beneficiaries, then the demonstrative beneficiaries, and finally the specific beneficiaries.

What issues can delay payment to beneficiaries?

If the distribution of inheritance is dependent on the sale of property or shares, this can cause a delay in payment to beneficiaries.

Property

In the case of property, a suitable buyer will have to be found, and the necessary paperwork will have to be completed. If the property is abroad, then the issue is more complicated. The executor will have to work to the country’s laws and regulations, as well as with foreign lawyers and estate agents.

Shares

If shares need to be sold, the executor will need to work with a stockbroker or share registrar and produce a share certificate. If this certificate has been lost, a search will have to be conducted, and replacements will have to be requested.

Debts

Another common cause for delay in distribution of inheritance is debt. When someone dies with outstanding debt, creditors can claim repayment from their estate. Executors may place a statutory advertisement in a local newspaper, giving creditors and potential claimants 2 months to come forward.

Alternatively, executors can also choose to take out an insurance policy to protect themselves and the beneficiaries against any unknown creditors and claimants.

Benefits payments

The Department for Work and Pensions (DWP) may also decide to investigate whether they have overpaid benefits to the person that has died. If they have, this money will have to be repaid from the estate.

Missing beneficiaries

One of the most common causes of delay is being unable to find beneficiaries. This can happen if family members struggle to track down a beneficiary named in a will, or if the person that died is no longer in contact with their family. In both cases, a tracing agent will be used, and naturally this will take time.

Insurance policies

Finally, if a life insurance policy forms part of the estate, the policy beneficiaries will have to answer questions about the circumstances of the person’s death, which can take time.

What happens if an executor refuses to pay beneficiaries?

If you are a beneficiary and the executor is refusing to pay, it can be concerning and stressful. But there are steps you can take to secure the inheritance you’re entitled to.

The first step you should take is to reach out to the executor directly. Contact the executor and ask them to explain why they are refusing to pay. There may be a perfectly valid reason for the delay, such as not being able to contact all the beneficiaries.

If the executor is unable to provide a satisfactory explanation and is still refusing, you can request an account of the estate. As a beneficiary, you’re entitled to this information to make sure the executor is carrying out their duties properly. This report will detail the financial transactions carried out on the estate, including all assets, liabilities and distributions made so far.

If the above steps don’t work and executor is still refusing to pay without a justifiable reason, you can take legal action against them. This will force them to fulfil their duties or ensure they are replaced if they have acted improperly. However, as legal action is expensive and can reduce the value of the estate, this should only be done as a last resort.

The importance of a clearly written will

The easiest way for a person to let family and friends know what they would like to happen after their death is to make a will. If someone fails to make a will before they die, then their possessions and money may not be distributed to the people or causes that they cared about the most. Making a will, and ensuring it is regularly updated, gives a person control over what happens after they die.

If the person who died didn’t make a will and you want to find out who is entitled to their money, property and possessions, use the government’s intestacy calculator.

If a person wants to specify their funeral wishes, they should talk to a family member or friend, write them down, or buy a pre-paid funeral plan so they are remembered how they want to be when the time comes.