What you need to know about beneficiaries
Whether you are in the process of writing your will or someone close to you has passed away, you may have heard the term beneficiaries and wonder whether it is something you need to consider.
Beneficiaries are those people who benefit, whether through a will, a trust or a life insurance policy when someone dies. Each beneficiary is named within the relevant document and there can be as many beneficiaries as the deceased wishes.
In instances where someone dies and a will hasn’t been left, known as ‘intestate’, beneficiaries are set in a way outlined in law.
Who are the beneficiaries?
For many people, the beneficiaries of their will are their children and/or spouse, however other family members, friends and charities can also be named.
If a person has died without a will, beneficiaries will be those entitled to inherit under the ‘order of succession of beneficiaries’. In these circumstances, the deceased’s spouse/ civil partner, children, parents, siblings and other relatives may be eligible to inherit.
When it comes to children, all of the deceased’s children are treated equally, whether the child was adopted, from a previous relationship or from marriage.
Issues with beneficiaries
Where a will has been left it is often straightforward to ensure that the deceased’s wishes are adhered to. However, there are instances where this may be difficult, including whether one of the beneficiaries has been declared bankrupt or the beneficiary is mentally incapable. In these instances, seeking legal advice is advised.
Divorce and marriage
The timing of a will matters when it comes to marriage and divorce. For example, a will made before a marriage, (or registered civil partnership), is revoked unless the will specifically states it was made in light of the impending marriage. If the deceased made a will while married and since got divorced, (or dissolved the civil partnership), the will is automatically changed to reflect this. This means that former spouses are omitted from the will and that they cannot be executor. To overcome this the will must state what should happen in the case of divorce.
Should you make a will?
In short, yes, making a will makes dealing with your estate much easier for those you leave behind and will ensure that your wishes are adhered to. This can be especially important in situations where family members are estranged or where young children are involved, and a guardian is required.
The process of making a will can also help to reduce the amount of inheritance tax payable.
Probate is the name given to the process of dealing with a deceased person’s estate. The process is managed by the executors who are usually named in the will although a solicitor can also act in this capacity. When someone dies intestate, a member of the deceased’s family must apply to be an administrator of the will. Only family members will benefit from a deceased person’s estate if no will is made.
Here at Smith Partnership, the team are experienced in all kinds of will and inheritance matters including will writing, probate services and advising executors, contact us to find out more.