Dealing with Beneficiaries

An executor appointed by Will or an administrator (where there has been a Grant of Letters of Administration because there is no Will) have a legal obligation to administer the estate competently and in a timely way. During the course of the administration they will need to liaise with the beneficiaries to ensure they are the right people to receive their inheritance and are legally capable of doing so (including to ensure they are not bankrupt).

Make sure you’re covered before distributing the estate

An executor /administrator should make sure that they do not distribute the estate into the hands of the beneficiaries too early. They must ensure that all estate debts are paid and that the time limits for bringing an estate claim in their particular State have passed.

It is advisable for an executor/administrator to arrange for a Deed of Release and Indemnity to be prepared and signed by themselves and the residuary beneficiaries of an estate, before significant distributions are made, in order to protect themselves from any future unforeseen contingencies and also to record the agreement to any appropriations (specific allocations) of assets to particular beneficiaries.

Watch out for tax implications

Distributions will include the transfer of assets (such as real property/land, shares and personal items) and distribution of cash from bank accounts, life insurance or arising from the sale of estate assets. The timing of distributions and transfers can have important ramifications for tax purposes, so it is important to seek advice before arranging distributions to beneficiaries.

Talk to us before you distribute

Estate First Lawyers can assist with all aspects of liaising with beneficiaries and keeping them informed. Importantly we can provide you with the legal advice to keep you as an executor or administrator off risk, including documenting agreements between executors/administrators and beneficiaries to ensure all legal and tax aspects of the estate are dealt with before final distribution of the estate. At our first consultation we will go through the various issues with you and provide you with tailored recommendations and a fixed fee quote.

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