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Rights of beneficiaries

When a loved one passes away, whether expectedly or unexpectedly, the last thing on your mind may be concerning yourself with the physical belongings and assets of your deceased family member or partner. However, it helps to know your rights as a beneficiary so that distributions of the deceased’s estate can be carried out smoothly and with as few complications as possible.

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What is a beneficiary?

The beneficiary of a will is any person who is listed on the will as being entitled to receive a defined portion of the deceased person’s assets or income. If the person who has named you as a beneficiary dies, you will normally be contacted and made aware that you have been named as such. You may already know that you were listed as a beneficiary or you may not.

What are your rights as a beneficiary of a will?

  • As a beneficiary of a will, you are legally entitled to be notified whether or not a valid will was left and what your exact entitlement from the estate is, as laid out in the will.

  • The executor of the will does not have a legal obligation to invite all beneficiaries of the will to attend the will reading, nor are they legally obliged to provide the beneficiary with a full copy of the will, unless the beneficiary makes a formal request for the executor to do so.

  • Beneficiaries are entitled to receive their entitlement within 12 months of the deceased’s death. If there is any delay in the beneficiaries receiving their entitlements, the executor must provide a reason for the delay.

  • Beneficiaries have no legal rights in terms of making funeral arrangements for the deceased - you may only consult with the executor and make any requests for the deceased’s funeral, which the executor is under no obligation to fulfil.

What are the tax implications of being a beneficiary of a will?

Being named as a beneficiary may come with tax implications, depending on the type of assets you receive. If you receive real estate or real estate capital, generally there is no tax to pay, as long as you are not a foreign resident. If the benefit you are to receive from the estate is monetary in nature, or if you are entitled to income from the deceased estate (for example, you are entitled to property which is currently producing rental income or shares which are paying dividends), you may be responsible for paying tax on these assets. Ensure you discuss all benefits you receive from a will with your accountant to determine the tax you need to pay.

What if I want to dispute the will?

In some cases, a beneficiary may believe that they have not received an adequate portion of the deceased person’s estate. This may be because they now have expenses to pay for on their own now that the deceased person is gone and their payout from the estate does not adequately provide for their situation. In this case, you may need to seek the advice and representation of a lawyer. Find out more information on Will Disputes.