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Who is a beneficiary?
A beneficiary is any person or entity (e.g. a charity) that receives a gift or benefit (e.g. an inheritance) from a person’s estate.
Who can be a beneficiary?
Anyone can be a beneficiary. However, you cannot leave gifts that break the law, such as to support a terrorist group. Most Will Owners leave their estate to their spouse, partner, children, family members, friends or charities.
What is an ‘Estate’?
An estate is all of the property and liabilities of a person in existence after her or his death. There are some assets that do not form part of the Will Owner’s estate after his or her death. The most common examples are:
- Property owned jointly with another person (known as tenants in common). In this instance, the Will Owner’s share of the property passes to the other owner automatically on the Will Owner’s death.
- Superannuation and life insurance proceeds that are paid directly from the fund to a superannuation/life insurance beneficiary (and not to the estate).
- Undistributed assets of a family trust.
The Will Wizard® portfolio document titled Guide For Will Owners includes information on how to ensure your assets are distributed as per your wishes. For example, a binding death benefit nomination can be made to ensure your super it is paid to your estate.
Can I exclude my spouse or child?
Yes, but we do not recommend it as it can lead to extremely damaging and costly disputes.
If you exclude your spouse, partner or a child or other dependent from your Will, or if you fail to adequately provide for the proper maintenance and support of such dependents, these dependents may be able to bring a claim against your estate under family provision laws.
These laws enable certain categories of persons who are unhappy with their entitlement under a Will to apply to the court for further provision out of an estate. The persons entitled to make a claim vary in each of the Australian States and Territories, but generally include a spouse, de facto partner, same-sex partner, former spouse, child and certain other past or present dependents.
If you have decided that you are going to exclude any of these persons from your Will, you should seek professional legal advice before doing so. The legal fees and court costs of such inheritance disputes are paid by your estate (not the parties in the dispute) and can cost your estate hundreds of thousands of dollars.
What information do executors provide beneficiaries?
The level of information that executors are required by law to provide to beneficiaries depends on what they receive under the Will. Careful communication is important to avoid misunderstandings.
Beneficiaries, who are only entitled to specific gifts or money under the Will, generally will not be entitled to receive full details of the estate. Beneficiaries who receive a share of the balance of the estate (known as residuary beneficiaries) are entitled to a full accounting of the estate funds, including details of all funds received and expended in the estate.
A beneficiary can bring court proceedings against an executor who fails to provide adequate information. Any proceedings would cause delays and incur additional expenses.
