Receiving the news that you are due to inherit money, property, or other assets can be emotional and sometimes overwhelming. Whether you are inheriting following the death of a loved one or have been notified that you are a beneficiary under a trust, it is important to understand the process and the steps you should take to protect your interests.
Here are some important dos and don’ts to keep in mind.
Do: Confirm What You Are Entitled to Receive
If someone has informed you that you are due to inherit, the first step is to establish the basis of your entitlement.
You may inherit:
- Under the terms of a Will.
- Under the rules of intestacy if the deceased did not leave a valid Will.
- As a beneficiary of a trust.
- Through a life insurance policy, pension death benefit, or jointly owned asset.
If you are unsure, ask the executor, administrator, or a solicitor for clarification.
Don’t: Expect to Receive Your Inheritance Immediately
Administering an Estate takes time. Executors may need to obtain a Grant of Representation, settle debts, pay tax liabilities, and collect assets before any distributions can be made. Patience is necessary, even in seemingly relatively straightforward Estates.
You should also avoid making significant financial decisions in anticipation of receiving your inheritance, such as making an offer on a new property. Due to its complex nature, Estate administration can often run into unforeseen delays, and it is therefore difficult to know with any certainty when you will receive the funds.
Do: Keep Important Documents Safe
Retain copies of any correspondence relating to the Estate and be prepared to provide identification or other information if requested by the Executors or their solicitors.
Don’t: Ignore Tax Implications
Although beneficiaries do not usually pay tax on the inheritance itself, there may be tax consequences depending on the assets you receive.
For example:
- Inherited investments may generate taxable income.
- Capital Gains Tax may be payable if inherited assets increase in value and are later sold.
- Trust distributions can have specific tax consequences.
- Foreign inheritances may raise additional tax considerations.
Obtaining legal and financial advice can help you understand any obligations and avoid unexpected liabilities.
Do: Respond Promptly to Requests
Executors and trustees often require information from beneficiaries to progress matters. Providing documents and responding to enquiries promptly can help avoid unnecessary delays.
Don’t: Assume There Can Be No Disputes
Even where there is a Will, disagreements can arise. Challenges to a Will, concerns about an Executor’s conduct, or claims brought by family members can all affect the administration of an Estate.
If you become aware of a dispute, it is advisable to seek legal advice as early as possible.
Do: Keep Track of the Estate Administration
As a beneficiary, you are entitled to reasonable updates about the progress of the Estate. Keeping informed can help you understand the likely timescales involved and manage expectations while the administration is ongoing.
Don’t: Forget to Review Your Own Estate Planning
Receiving an inheritance can significantly change your financial circumstances. It may be the ideal time to review your own Will, Powers of Attorney, and wider succession planning arrangements.
Receiving an inheritance can significantly change your financial circumstances. It may be the ideal time to review your own Will, Powers of Attorney, and wider succession planning arrangements.
How We Can Help
Whether you are expecting an inheritance, have questions about your rights as a beneficiary, or are involved in an Estate dispute, contact our Private Client team to discuss clear, practical advice tailored to your circumstances.
