10 Jul Rights of Beneficiaries of a Will in Victoria
Rights of Beneficiaries of a Will in Victoria
Who is a beneficiary of a deceased estate?
A beneficiary is a person or organisation with an entitlement from a will. However, for the named person/organisation to benefit, both the will and the written bequest must be valid. It is upon the executor to establish the validity of the will and then to administer the estate according to the terms of the will. This means the executor temporarily holds the estate for the beneficiaries and has a duty to them. This still applies even where, as is often the case, the executor is one of the beneficiaries. We take a look at the rights of beneficiaries of a will in Victoria.
Estate Solicitors dealing with beneficiaries
Often beneficiaries can become dissatisfied or take issue with the way an estate is being administered. These concerns commonly focus on the length of time taken to administer the estate, decisions about the investment and use of assets of the estate or the distribution of discretionary items and personal effects such as furniture. Beneficiaries may also become dissatisfied with the estate solicitor whom they blame for any delay or resent for charging fees to administer the estate.
Beneficiaries must understand that the lawyer acts for the estate, on the instructions of the executors, not for them. However they should be given a copy of the will as soon as possible and the process of applying for probate or letters of administration should be clearly explained to them, including the approximate time frame.
If beneficiaries over-communicate to the estate solicitor, the estate will be charged for it and therefore the value of their own entitlement will reduce.
Challenge to the will by a beneficiary
Although the beneficiaries under the will have rights to see the will and to be informed once probate has been granted, the estate solicitor is not required to give them advice about their rights (it would also be a conflict of interest if they did). If beneficiaries have any unresolved issues with the estate they are at liberty to seek their own independent legal advice at their own cost.
A beneficiary who believes there is a problem with the will, such as a contention that the deceased did not have capacity when the will was made, will be advised by the estate solicitor to seek independent advice. In such a case the executor would be notified promptly of any prospective challenge to the will.
Beneficiaries who do not have any issue with the validity of the will, but who consider that inadequate provision has been made for them in the will, can make a claim for greater provision under the Administration and Probate Act 1958. Such beneficiaries must obtain their own independent advice about any claim.
Settling disputes out of court
In circumstances where all parties – all beneficiaries and the executor(s) are in agreement about the challenge (for example they agree that the deceased definitely did not have capacity), it is still possible to administer the estate without resorting to court proceedings. The options are as follows:
− an application for probate, or letters of administration with the will attached, could be made in relation to a prior will; or
− a deed of family arrangement could be executed providing for probate to be sought of the disputed will on the basis of an agreed adjustment to its terms.
Transferring a beneficiary’s interest in an estate
A beneficiary has no legal right or title to property of the estate until the executor or administrator transfers it to them following a grant of probate or letters of administration. Until then it is held on trust for them, either generally, or subject to any specific terms of trust in the will. If the beneficiary’s interest is conditional, for example upon them reaching a certain age, then the condition must be met before the gift can pass. A beneficiary however can in some circumstances successfully apply to the court to have their interest pass to them earlier than provided for in the will.
What documents can a Beneficiary ask for?
A beneficiary is entitled to see a copy of the will and any revoked or previous wills made by the deceased.
VCAT can compel of these documents if they are not provided.
Murder Forfeiture rule
The forfeiture rule prevents a person inheriting from their victim (of murder), or acquiring another financial benefit from the death. It is an unwritten rule of public policy enforced by the courts. It has no statutory basis yet overrides the words of a will, entitlements provided in the legislation, and legally binding agreements to which the deceased person was a party. See, for example, Edwards v State Trustees Limited  VSCA 28. In that case, the beneficiary (wife) of the deceased’s will was convicted of homicide of the deceased (husband). She was not entitled to benefit financially from the death she caused.
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