A guide for beneficiaries

Wills, Trusts & Probate insights

What is the residue?

The residue is what remains in an estate after paying any tax due, the deceased’s debts together with any cash legacies in the Will including specific gifts. In most Wills the residue represents the lion’s share of the estate. A residuary beneficiary is a person entitled to a share of the residue of a deceased person’s estate.

If you are a beneficiary of an estate, you will receive your entitlement once those entrusted with administering the estate – usually the executors – have gone through certain formalities to deal with the estate. Someone’s estate is generally “frozen” or “locked” when they die and can only be unlocked when Probate is obtained. Probate is usually the key to dealing with assets.

You will normally be notified by the executors that you are due a share of the residue.

 

Who are the executors and what do they do?

These are individuals appointed in a Will. Usually they are family, friends and/or professionals. Once the funeral has been arranged, they need to ascertain the extent of the estate by contacting all of the institutions to obtain formal valuations. Sometimes professional valuers are required to deal with personal possessions such as paintings, antiques or property. The executors also need to check the extent of liabilities such as outstanding credit cards, mortgages. The executors are reliant on third parties getting back to them with the relevant information.

 

What happens next?

Once all the information has been gathered, the executors need to apply for a Grant of Probate. This is a court order confirming the validity of the Will and it gives the executors the power to deal with all of the assets. Once Probate is granted the executors effectively have a key to unlock the estate and can now encash and/or transfer assets to you as a beneficiary.

If the estate is liable to Inheritance Tax an Inheritance Tax account has to be compiled and in most cases some Inheritance Tax must be paid before Grant of Probate can be applied for.

 

When will I get my entitlement?

Generally the executors will endeavour to make an interim distribution to you once they are holding sufficient funds and the issues referred to below have been dealt with or do not apply:-

  • Pay legacies
  • Pay debts and other expenses
  • Negotiate with HM Revenue & Customs in relation to valuations for property, land and
    businesses
  • Obtain taxation clearances
  • Wait for a two-month statutory notice period for creditors to expire (such notices are usually given after Probate has been obtained)
  • Wait for six months from the Grant of Probate if a claim against the estate seems likely

 

When will everything be finished?

This can vary as no two estates are alike. Since Covid, it has become more challenging to provide you with an estimate for obtaining the Grant of Probate which used to be two to four months from the executors receiving all of the deceased’s financial papers when GOV.UK organisations were consistent.

To conclude an estate administration takes longer as matters with HMRC inheritance tax and HMRC income tax can take time to resolve although concluding a simple estate within 6 to 12 months is usually possible. If you receive an interim distribution then the balance due to you will be paid when all outstanding matters have been dealt with.

 

How do I know that everything has been accounted for?

Your executors should keep in touch with you and produce a comprehensive set of administration accounts which give you an accurate snap shot of the assets and liabilities at the date of someone’s death. It will also deal with the movements in the estate since the date of death to take account of increases/decreases in the value of the estate and administration expenses. These accounts do need to be approved by the executors.

 

How can I help?

It is advisable to keep the executors informed of your up-to-date residence and you may need to provide them with your bank details and identification and, if you are based overseas, provide advice as to which currency monies are to be paid over to you.

 

How can Dixon Ward help?

We are experienced in assisting executors or acting as executors in a role that many find time-consuming and potentially quite daunting. We can help to minimize tax liabilities. We ensure the smooth running of the administration process. We can also lend an objective viewpoint to any problems that may arise between executors and beneficiaries.

 

These notes are not exhaustive and are meant as a basis for discussion with your legal adviser. If clients wish to discuss any of the above, please contact our Private Client Team 020 8940 4051 who will be pleased to help you

IMPORTANT: this information is intended to be a general statement of the law. No action should be taken in reliance on it without seeking specific legal advice.

Our Private Client team

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Gregory White

Private Client department
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Dixon Ward | Wills, Powers of Attorney, Probate & Trusts | The Team | Abigail Pfister

Abigail Pfister

Private Client department
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Dixon Ward | Wills, Powers of Attorney, Probate & Trusts | The Team | Paul Denza

Paul Denza

Private Client department
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Reena Khatri

Private Client department
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Stephanie Mends

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Dixon Ward | Wills, Powers of Attorney, Probate & Trusts | The Team | Sabrina Caldeira

Sabrina Caldeira

Private Client department
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Dixon Ward | Wills, Powers of Attorney, Probate & Trusts | The Team | Shaun'Tay Saunders

Shaun’Tay Saunders

Private Client department
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Sofia Williams

Private Client department
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If you would prefer to speak to someone on the phone, you can reach our team on: 020 8940 4051

You can also visit us at our offices on beautiful Richmond Green:
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