Distribution of the estate
Once you have collected in all estate assets and settled the estates tax affairs and any outstanding liabilities or disbursements, you will then be able to begin distributing the estate in accordance with the terms of the Will, or in line with the Rules of Intestacy.
Distribution of any estate assets should not be made prior to the expiry of the Statutory Notice to Claimants. This is where a notice is placed into the London Gazette and into a local newspaper and lasts for a period of 60 days. The purpose of this is to give any claimants or creditors 60 days to make a claim against the estate, after which time the estate will have some protection against any claims that may arise in the future. It is not recommended that the estate is distributed or finalised until after this 60-day period expires as it will protect the Executors/Administrators from any liability in the future.
Before any distributions are made, it is also recommended that you obtain identification for each beneficiary (generally photographic ID and proof of address will suffice), so that you can confirm and prove that each beneficiary is exactly the individual referred to under the Will or entitled under intestacy.
- This is particularly important where any beneficiaries are referred to by ‘nicknames’ under the Will or where beneficiaries have become married, meaning that their name will differ from that in the Will.
- This will avoid any uncertainty and will prevent distributions being made to the wrong individuals, as the Executor/Administrator will ultimately be liable should this be the case.
Any specific gifts or pecuniary legacies set out in the Will should be distributed first.
- It is recommended that any payments of pecuniary legacies to any beneficiaries should be made by either cheque or bank transfer. This is because these are both traceable and can be referred to and proven at a later date should any queries arise.
- You should ideally get some form of receipt from each beneficiary to confirm that each has received their correct entitlement from the estate.
- If there are any gifts or legacies due to a beneficiary who is a minor it is sometimes possible to pay their legacy to their parent or guardian, who can provide receipt on their behalf, depending on the wording of the Will. Alternatively, where this is not possible, funds will need to be held upon Trust for any minors until they are old enough to provide valid receipt.
At this point, any property that has not already been sold, or any property specifically gifted in the Will, can be transferred into the name of the beneficiaries.
- It is recommended that you seek assistance from a professional to transfer any property to any beneficiaries.
If there is direction in the Will that assets should be held in Trust, then you will need to arrange for the assets to be transferred to the control of the Trustees and execute the relevant documents to reflect this.
- Unfortunately, the drafting and setting up of any Trusts is a reserved activity and you will need to contact a professional for advice and services in respect of this.
Finally, before any distributions are made to any residuary beneficiaries, you should put together estate accounts.
- The estate accounts should outline all assets and liabilities in the estate, along with any payments that have been received or payments made, during the course of the estate administration
- The accounts are required so that each residuary beneficiary may see the exact extent of their entitlement from the estate
- Once completed, each residuary beneficiary and any other Executors should receive a copy of the accounts and approve them (it is advisable for each beneficiary to provide you with their written approval of the accounts).
- Only when the accounts have been approved should you make any final distributions to the residuary beneficiaries. Again, you should ensure that you distribute any funds by way of a cheque or bank transfer so that any payments are traceable, and you should obtain a receipt from each beneficiary to confirm that they have each received their correct entitlement under the estate.
Once all distributions have been made and all matters have been finalised for the estate, you should ensure that all documentation and paperwork in relation to the administration is kept in a safe and secure place.
In line with the General Data Protection Regulation (‘GDPR’) all sensitive personal data relating to beneficiaries or any other living people which may be held on file, should be securely destroyed or deleted if there is no longer a justifiable reason for retaining it.
It is advisable not to destroy any original documentation as it may be that you will need to refer back to the paperwork in the future. It is good practice for Professional companies and legal bodies to keep and store files and paperwork for a minimum period of 7 years, in line with HMRC guidelines, so this may be something to consider.
If you have any questions or would like more information please call 01522 580571 to speak to one of our experts