If you are a beneficiary in an estate and are having problems getting information, this article and podcast by Lucy McPherson is for you!
We receive many enquiries from beneficiaries in deceased estates seeking advice in relation to their rights. Beneficiaries usually want to know how much money they are going to receive or be able to identify their interest in an estate. In some cases, they may want information in relation to the overall assets and liabilities of the estate.
Most of these enquiries arise from a concern about the manner in which an estate is being administered and uncooperative or secretive behaviour. It is natural human nature to be inquisitive and/or mistrustful when information is withheld from us! Common complaints include:
- The beneficiary has not been provided with a copy of the Will and does not know what they are entitled to; and
- The beneficiary is not being provided with information in relation to the asset and liability position of the estate and is being “kept in the dark” when it comes to information in relation to the estate and its administration.
Beneficiaries of estates have certain rights which are protected by law.
Executor’s fiduciary obligation to beneficiaries
When entering into any discussion about the rights of beneficiaries in estates, a useful starting point is the nature of the relationship between beneficiaries and executors. An executor stands in a fiduciary relationship to all beneficiaries of the estate. Fiduciary simply means a relationship of trust. This relationship is central to the rights of beneficiaries and the obligations of executors in estates. The executor has been entrusted with the assets of the estate and the power to administer the estate for the benefit of the beneficiaries of the estate. The executor must therefore discharge his or her duties with due care and loyalty to the beneficiaries.
Identifying a beneficiary’s interest in an estate
A beneficiary should be promptly informed of their entitlement under a Will or if there is no Will of their entitlement on the deceased’s intestacy (the rules governing the distribution of an estate in the absence of a Will).
When a beneficiary has not been properly informed of their entitlement the law provides beneficiaries with certain rights to access information relating to their entitlement. Those rights include a right to receive a copy of the Will. In both New South Wales and Queensland the law compels a person who has possession or control of a Will of a deceased (and this person does not necessarily have to be an executor) to provide a copy of the Will to any person named or mentioned in the Will, upon request.
Once a beneficiary receives a copy of the Will they will usually be able to identify their interest in the estate. If they are unable to due to the complexity of the document they should seek the assistance of an experienced Wills and Estates Lawyer. The beneficiary’s right to further information is often dictated by the nature of their interest in the Will. Classifying the nature of a beneficiary’s interest can become quite complicated. Essentially, there is a distinction between a beneficiary that holds an interest in a specific asset (for instance a boat or a bank account) and a beneficiary that holds a residual or remainder interest in the estate.
Seeking information in relation to the nature of the estate assets and liabilities
A beneficiary’s right to information in relation to the operation of an estate is historically steeped in English Law which has continued to inform Australian Law. It has been accepted legal principle for many years that estate documents “belong” to the beneficiaries and are in a sense the property of the beneficiaries. Access to those documents is an entitlement that should not be denied by the executors.
For a beneficiary to effectively monitor the administration of estate property it goes without saying the beneficiary needs information regarding the performance of the executor’s duties and powers. To this end the law has imposed on executors and trustees a duty to account beneficiaries. However, the nature of the beneficiary’s interest can dictate the extent of information they are entitled to.
A beneficiary that holds an interest in a specific asset (for instance a boat or a bank account) has a right to access information in relation to that specific asset, but generally nothing more. Using the example of a beneficiary that receives a specific gift of a boat under a Will, they are entitled to access information in relation to the boat (such as registration papers etc). They are not strictly speaking entitled to access information in relation to the other assets of the estate, unless there are special circumstances.
The rights of a beneficiary holding a residual or remainder interest in an estate are much broader. As a residuary beneficiary of an estate the entitlement to access to information extends to the ability to access information relating to the management and administration of the estate in its entirety.
A beneficiary entitled to an interest in remainder in an estate has a right to access all information about the estate and has a right to see estate documents as it is information about that beneficiary’s own property. As every transaction occurring in the estate will ultimately affect that beneficiary’s interest they are entitled to a full accounting of the estate. In the event that information is withheld the beneficiary can approach the Court to compel the executor to provide the relevant information.
Further rights of beneficiaries
The above summaries are not exhaustive. Beneficiaries have further rights in estates including:
- The right to be informed of the expected date of distribution and any delay that may be occasioned;
- Where the beneficiaries are due to receive a legacy, to receive that legacy within 12 months of the deceased’s death or if paid outside that period, to be paid their legacy together with interest as prescribed by the legislation; and
- To be advised of any litigation against the estate that may affect their entitlement under the Will or intestacy.
It is very important that you take steps to find out about your entitlements in an estate if you are a likely beneficiary. We have experienced many cases of fraudulent behaviour by executors where they have literally ‘spent the inheritance’ of their own family members. We strongly recommend you ensure your interests are protected against this type of potential harm by seeking independent legal advice. If a Court considers the executor has acted improperly, it is likely your reasonable legal costs will be recoverable from the estate or the executor personally.
Attwood Marshall have the largest Wills & Estates department in the Gold Coast and Northern Rivers area and have lawyers who work exclusively in this area of law. If you are a beneficiary requiring further information in relation to your rights, we are offering an obligation free initial appointment for any new enquiries. Please contact our Department Manager Donna Tolley on direct line 07 5506 8241 or email [email protected] or free call 1800 621 071.