If you are a beneficiary in an estate and are having problems getting information, this article, video and podcast by Lucy McPherson is for you!We receive many enquiries from beneficiaries in deceased estates seeking advice in relation to their rights. They usually want to know how much money they are going to receive or be able to identify their interest in the estate. In some cases, people may want information in relation to the overall assets and liabilities of the estate or to know what the rights of beneficiaries are. 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 individual has not been provided with a copy of the Will and does not know what they are entitled to; and
- The individual 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.
Executor’s fiduciary obligation to beneficiariesWhen entering into any discussion about the rights of beneficiaries, 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 an estate. Fiduciary simply means a relationship of trust. This relationship is central to the rights of beneficiaries and the obligations of executors. The executor has been entrusted with the assets and the power to administer the estate for the benefit of the beneficiaries. The executor must therefore discharge his or her duties with due care and loyalty to the beneficiaries.
Identifying an interest in an estateA 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 them with certain rights to access information. 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 they receive 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 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 assets and liabilitiesA 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 their property. 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 they need 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 for beneficiaries. However, the nature of their interest in the estate 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 unless there are special circumstances. The rights of beneficiaries holding a residual or remainder interest in an estate are much broader. When they fall into the residuary category, 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. One that’s entitled to an interest in remainder of an estate has a right to access all information about the matter 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 beneficiariesThe above summaries are not exhaustive. Beneficiaries may have further rights, including:
- The right to be informed of the expected date of distribution and any delay that may be occasioned;
- Where they 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.
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