Know your rights as a beneficiary

Thursday, 05 Apr 2018

If you are the beneficiary of a Will it is important to know what your rights are in regards to obtaining and protecting your entitlement.

  1. Right to Information

You have the right to be kept informed of factors concerning probate and distribution of your entitlement under the Will.  This does not mean you have the right to know all the specific details of the Will and the entitlements of other beneficiaries.  However it does mean that you are entitled to ask the executor what stage the matter is at - has the probate application been prepared yet?  Has probate been granted?  When is it likely that the assets will be distributed?

You are also entitled to receive a statement of your entitlement once it has been valued and assessed.

  1. Right to Receive your Entitlement within 12 months

You have the right to receive your entitlement under the will within 12 months of the Deceased’s passing. If you do not receive your entitlement within the 12 months you have the right to receive interest on your entitlement in accordance with section 84A of the Probate and Administration Act 1898 (NSW) at a rate of 2% above the cash rate advertised by the Reserve Bank.

However, the Executor also has the power to delay distribution of the Estate, particularly in instances where there has been a challenge to the Estate. Here, the executor is obligated to notify all beneficiaries of the delay and the reasons for it.

  1. Right to Extinguish the Trust

You have the right to extinguish the trust. That is, in instances where your entitlement is being held by an Executor in accordance with the Will, you may seek to extinguish this trust in order to immediately receive your entitlement.

But this is not an absolute right - there are a few qualifications, as set out in the case of Saunders v Vautier [1841] EWHC Ch J82, which you must meet:

  1. Sui juris - you must be legally capable of exercising this right;
  2. You must be absolutely entitled to a vested interest - that is, you must be a defined beneficiary in regards to a specific gift under the Will, to which no one else is entitled; and
  3. If there are multiple beneficiaries, you must all unanimously agree to extinguish the trust.

This is also provided in section 46 of the Trustee Act 1925 (NSW) which provides that money gifted under a will may be given where directed.

  1. Right to Compel Performance of the Trust

In rare and extreme circumstances, such as in Miller v Cameron (1936) 54 CLR 572 beneficiaries can take actions against the Executor to compel them to carry out performance of the Will, as detailed by the Will.

This right may only be successfully exercised in cases where the Executor’s lack of performance under the Will constitutes a gross failure by the Executor to meet their obligation under the Will. This action is not taken lightly and may go so far as to see the Executor removed from their appointment.

  1. Right to Restrain Breach of Trust

Just as you may compel an executor to act in accordance with the Will, you may also act to halt an executor from acting against the will, such as in Yorkshire Miners Association v Howden [1905] AC 256.  This may be so necessary in instances where the Executor is distributing funds to parties outside those detailed in the Will and against the interests of the beneficiaries, or just generally misappropriating funds.

Again, this action is not taken lightly. However, the threshold here is not as high as in exercising a right to compel performance; the act need not cause ‘irreparable harm’ before triggering action under this right. Once the Executor is in breach of their duties under the Will in this way, the court is much more likely to act swiftly in prevent such actions as in Heavener v Loomes (1924) 34 CLR 306.

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Please contact the team at Shire Legal if you have any questions in relation to your rights as a beneficiary.



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