3 Tips for Executors to Successfully Handle a Difficult Beneficiary of a Will

While the role of Executor (or Administrator) seems quite straightforward on paper as many areas of Estate Administration are governed by prevailing Probate and inheritance laws, reality can sometimes be quite different. Estate Administration can be made more difficult if the Executor and a Beneficiary of a Will have a strained relationship, or if complications arise in the process.

Moreover, the bigger the Estate or the more Estate Beneficiaries there are (or both), the greater the likelihood of issues cropping up. So, if you happen to be the Executor or Administrator of an Estate and want to avoid issues or are having a difficult time administering it because of reasons involving a Beneficiary of a Will, then this post is for you.

1. Typical Issues Concerning a Beneficiary of a Will

In the list below are some of the most typical issues that emerge between Executors and Beneficiaries, as well as some strategies for avoiding or resolving them.

1.1 Dissatisfaction Because of Unmet Expectations

People’s expectations about how long it takes to receive an inheritance are a common source of contention.

The majority of people — including a Beneficiary of a Will — can be unaware that Estate Administration can be a lengthy and drawn-out process. This is why no one can compel an Executor (or Administrator) to distribute an Estate for at least a year (i.e., the so-called ‘Executor’s year’).

The process of winding up an Estate typically takes longer than a year. Estate Administration can get specially more complicated when it involves Beneficiaries of an Estate without a Will. In such cases, the task of identifying who  the Estate Beneficiaries are is part of the Administrator’s job.

There are different possible sources or causes of delays during Estate Administration, including locating the Will, applying for Probate (or Letters of Administration), identifying and transferring assets, gathering information and documents in relation to Estate liabilities and paying off debts. There could also be issues with finding other Beneficiaries of a Deceased Estate if they have moved interstate, overseas or no longer live at their last known address.

In view of these possible complications that could slow down the distribution of inheritance, it’s best for the Executor (or Administrator) to inform Beneficiaries of the steps involved and keep them up to date with progress. Sitting down and having a talk with all Estate Beneficiaries or a particular Beneficiary of a Will is a recommended first step. During this initial meeting, the Executor should come prepared with timescales and discuss the steps they will need to take before any named Beneficiary can receive their share of the Estate.

When there is clarity in terms of the process and schedule, no one will be made to feel that their rights as a Beneficiary of the Will are being abused or disregarded. They will be better prepared and would be highly unlikely to rush the Executor into making any premature and ill-advised distributions.

1.2 Lack of Transparency in Accounting

Another key issue that could arise during Estate Administration concerns the Estate’s financial management and spending. For example, as the Executor of an Estate, you may be questioned about estate accounts by a Beneficiary of the Will.

She or he might question the figures presented in the Estate Assets & Liabilities Inventory as being higher or lower than expected. They may also be unaware of the costs of administering a Deceased Estate for administration, application and advice fees that Executors are entitled to spend to properly administer the Deceased Estate according to the wishes of the deceased person and to comply with the due process and laws.

To avoid this scenario, maintaining an open line of communication and knowing what level of information Estate Beneficiaries are entitled to are generally beneficial —reassuring all or a particular Beneficiary of a Will about how the estate funds are being managed. Oftentimes, all you need to do is communicate at a high-level the activities you are undertaking, and which incur costs..

If you want to claim compensation for your role as Executor, keeping the Beneficiaries aware about the work you are doing can be beneficial. An Executor may be entitled to an Executor’s fee of up to 5% of the Estate value.

The Executor’s fees are intended to reflect the Estate’s complexity and the amount of effort required to complete the Estate Administration process. Beneficiaries are less inclined to begrudge the Executor a decent remuneration if they are kept abreast of all the work the Executor must accomplish.

In any case, all transactions of the Estate should be meticulously recorded by the Executor or Administrator. If there are delays or issues in the process of liquidating estate assets, such as selling property in a volatile market, giving out updates to the Beneficiaries could help ease their fears.

All matters concerning finances are best cleared out immediately. By keeping updated, documented and detailed records of all financial transactions and expenses, and knowing what information Beneficiaries are entitled to view, you’ll be ready to respond to Beneficiaries’ questions in case of doubt.

1.3 Inadequate Knowledge of the Laws and the Estate Administration Process

Sometimes, disputes emerge because the parties involved are unaware of the breadth of the Executor’s authority and discretion, or when the reasons for certain choices made by the Executor are unclear.

Many facets of an Executor’s role are governed by Australian and state-level Estate and inheritance laws. These include the authority and discretion granted to the Executor of a Will.

This is where getting the advice of a Probate lawyer or legal expert in Western Australia, New South Wales, Queensland, Victoria or wherever you are comes into play.

You can  also consider including a lawyer who is well-versed in the relevant laws during your initial meeting with the Beneficiaries.

Here, you can present your duties as Executor (or Administrator) and explain all the steps of Estate Administration to be completed before anyone can receive their inheritance. The lawyer can also answer questions or add clarity to issues pertaining to your role and Deceased Estate Beneficiary rights.

2. Familiarise Yourself with the Rights of a Beneficiary of a Will

Just as it is crucial for you to know your role and legal duties as Executor of an Estate, it’s equally important to know the rights of every Beneficiary of a Will so you know how to deal with them.

Beneficiaries of an Estate have a number of rights, aside from being entitled to part of the distribution of the Deceased Estate. These include the right to:

2.1 Know of the Existence of a Will

They have the right to know if the deceased person left a Will that names them as a Beneficiary.

In most cases, a Beneficiary will be advised of the existence of a Will either during their lifetime by the Will maker or after the death of the Testator through the Executor named in the Will or the deceased person’s legal representatives.

2.2 Examine or Receive Copies of the Will

A Beneficiary has the right to see or get a copy of the Will, including a revoked Will, a document purporting to be a Will, a portion of a Will or a duplicate of a Will.

The person in possession or control of the Will (usually, this is the Executor or the Testator’s lawyer) must allow a named Beneficiary to examine or get copies of the Will (at their own expense).

2.3 Financial Disclosure – General Beneficiary vs Residuary Beneficiary

Generally speaking, a Beneficiary is entitled to view details about the items specifically left, gifted or bequeathed to her or him as outlined in the Will.

A residuary Beneficiary who is entitled to the full or a portion of the residuary Estate (the remainder of all assets (including proceeds from an Estate sale) after gifts, bequests, liabilities, taxes and any other testamentary expenses were deducted), may view the detailed financial breakdown of the Estate to ascertain how the residual estate value was arrived at.

2.4. Be Notified of Their Entitlement and the Liabilities of the Estate

A Beneficiary is entitled to know the following things before the Estate is distributed:

• A description of their entitlements or inheritance from the Deceased Estate and the period in which they might reasonably expect to receive them (usually within a year); and
• The Estate’s potential liabilities (including the Estate’s debts and tax obligations), particularly where such liabilities are linked to their specific entitlement as a Beneficiary.

2.5. Receive a Statement of Distribution

Beneficiaries have the right to receive an accurate ‘Statement of Distribution’ from the Executor detailing their entitlement or distribution, including how it was calculated.

The statement of distribution is intended to assist each Beneficiary of a Will in completing their tax return for the relevant financial year.

2.6. Be kept Informed About the Condition of the Estate and any Delays in Distribution

A Beneficiary has the right to be kept informed about the status of the Estate and any reasonable delays in distribution while the Executor is managing the Estate.

Ideally, Beneficiaries should receive their share of the Estate within 12 months of the deceased person’s death. The Executor must provide a reasonable explanation to the impacted Beneficiary of the Will if there are any delays in the distribution of entitlements.

3. Recognise the Emotions Involved

Grief and sentimental attachments are sometimes at the root of inheritance conflicts, or feelings of dissatisfaction with the Estate Administration process and the one performing the task.

To avoid hurt feelings, as Executor (or Administrator), you might want to ask Beneficiaries whether there are any emotional assets in the Estate — anything that has a sentimental value to them, even if it has no financial value and hence may be overlooked, disposed of by mistake or handed to someone else instead.

Also, set the record straight when it comes to Estate belongings and personal belongings of the deceased person. Let Beneficiaries and family members know that no one can remove anything from the home of the deceased as you perform your duties. If you correctly inventory items, you could prevent difficulties from arising with and among the Beneficiaries.

Administration Support for Executors and Administrators

At simplyEstate, we know that performing your role as Executor or Administrator of an Estate can be quite challenging. This is why we have Executor Checklists & Tools, Australia’s most comprehensive Deceased Estate Administration Guide and Estate Administration support available for you.

We can also refer you to the legal experts you need to do your job efficiently, especially in relation to dealing with a difficult Beneficiary of a Will and Estate you are managing.