Distribution of the Estate (If the will is present)

When you have completed your accounts, and all outstanding debts and liabilities have been met, you will now be in the position to calculate how much residuary beneficiary receives according to the specific provisions of the will. In practice, the amount that you have left in the executor’s bank account should match the sums paid out.

After having ascertained that this is the case, and rectified any errors you should send the accounts to the beneficiaries for their agreement or otherwise. In cases involving inheritance tax, you should contact the capital tax office and confirm that you have disclosed the full value of the estate. You then apply for a clearance certificate. When you have received this you can make the final distribution to the beneficiaries. The beneficiaries should be asked to sign an acknowledgement that they agree to the accounts and the amounts that they receive.

Where beneficiaries are dead or missing

If a beneficiary dies before the death of the testator, the general rule is that the legacy cannot be made. There are a few exceptions to the rule:

If the will contains a ‘substitution’ (an alternative beneficiary)
If the gift is made jointly to two people – the survivor becomes sole beneficiary
If the share of the estate or gift is to a child or other descendant of the testator and the child dies before the testator leaving ‘issue’ (children and their descendants) they take the share of the gift

If a beneficiary cannot be located, you must take steps to find that person. These steps should be reasonable. As stated, an advertisement can suffice, as well as contacting relatives and so on. You can apply to the Court for an order giving you permission to distribute the estate on agreed terms. You can claim any expenses incurred from the estate.

It is very important, if you are can’t find the beneficiary that you take steps to obtain a court order , to protect yourself from any future problems arising should the beneficiary does turn up.

The children’s trust under intestacy rules

When the surviving spouse has children, whatever their age, and the estate is worth more than £125,000, the administrators of the estate must set up a trust to look after the children’s share. As trustee’s, they must invest half the remaining capital in their own names. They notify the HMRC of the new trust and submit a Trust Tax return each year. The income from the trust is paid to the spouse, the capital held in the trust account is shared between the children unless they are under 18.

If any of the children die, leaving children of their own, before the death of the intestate or – whichever is later – second parent, the Statutory Trust rules apply. Under these rules, where a child if the intestate has died leaving children who are 18 or over (or who marry before 18) the children get their parents share. The same applies if the only survivors grandchildren or even remote descendants.

In some cases intestacy rules can be rigid and cause hardship. You should always take professional legal advice when dealing with distribution of assets in cases that are complicated to solve.

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