What is a Beneficiary?

A beneficiary is a person or entity who is nominated by the testator to inherit a share of their estate or a specific item in their estate (such as a property, cash legacy or pieces of jewellery) under their Will (as a specific gift). Beneficiaries can either be individuals such as family members, relatives and friends, or entities including charities, organisations and or trusts.

The types of beneficiaries are the following:

1. Specific legatee: A person or entity chosen by the testator to receive a specific gift of an item or money or even shares in a company.

2. Residual Beneficiary: A person or entity who receives the remainder of the estate after all the specific gifts have been distributed to the other beneficiaries and the liabilities of the estate have been paid.

3.Contingent Beneficiary: A person or entity chosen by the testator who will receive the share of the testator’s estate or specific item, if they meet a condition set out in the Will as a requirement that needs to be met before they can inherit. A common example of this is the requirement to attain a certain age such as 21 or 25.

I have no family to be my beneficiaries. Who can I leave my estate to?

If you have no family to be the beneficiaries of your Will, you can choose to leave your estate to other beneficiaries.

These beneficiaries could include friends, charities or other institutions that you name in your Will. You could even choose to setup a trust, whereby you give directions to the trustee as to how you wish your estate to be distributed. 

Even if you don’t have any family to inherit your estate, it is important to ensure that your Will is valid, and that you don’t die interstate as your Will is then distributed in accordance with the rules of intestacy, which may not be in the way you intended.

What rights do Beneficiaries have?

Beneficiaries of a Will in New South Wales, have rights that are designed to protect their interests and ensure that the estate is administered properly.

Some key rights of beneficiaries include:

1. Right to Information

Beneficiaries have the right to be informed about their entitlements under the Will. This includes:

• Being provided with a copy of the Will upon request.
• Being updated on the progress of the administration of the deceased’s estate and informed of any delays.
• Being informed of any challenges made to the deceased’s Will and any family provision claims which may potentially affect the beneficiaries’ share of the deceased’s estate.
• The right to know about any legal proceedings against the deceased.

2. Right to a record of accounts

Residuary beneficiaries can request a copy of accounting records of the estate from the executor. The records should detail:

• The assets and liabilities of the estate.
• Income and expenses incurred during the administration of the estate.
• The distributions to be made to the beneficiaries including the calculations of the shares of the estate to be distributed to each beneficiary.

3. Right to Seek Removal of the Executor

If beneficiaries believe that the executor is not performing their duties properly, honestly and fairly, then they can apply to the court to make an Order for the executor to removed. Grounds for removal might include:

• Misappropriating the assets of the estate.
• Causing an unreasonable delay in the administration of the estate within a reasonable time.
• Conflict of interest where the executor is acting in their own personal interest and not in the interest of the estate.
• Not considering the interests of the beneficiaries in ensuring that the value of the estate does not diminish.
• Not ensuring that the beneficiaries are receiving their inheritances in a timely manner and are kept updated on the progress of the administration of the estate.
• The executor has neglected to action the administration of the estate and distribution of the entitlements to the beneficiaries.
• The executor has changed their address and cannot be located nor contacted.

Contact us for a free thirty-minute conversation with a Wills and Estates Lawyer.

Any information on this website is general in nature and should not be taken as personal legal advice. We recommend that you speak to a lawyer about your personal circumstances.

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