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Wills and Beneficiaries

Discover what is the difference between an executor and a beneficiary.

A beneficiary is someone who is named in a will to receive part of a person’s estate. This could include money, property or personal items. Beneficiaries can be people, groups or organisations. Their rights and responsibilities depend on the type of gift and what is written in the will.

This guide explains who can be a beneficiary, the types of gifts they might receive, and what legal rights they have.

Key Takeaways:

  • A beneficiary can be a person or an organisation – but not someone who witnessed the will.
  • There are three main types of beneficiaries: specific, residuary and contingent.
  • Beneficiaries have legal rights. They can ask for information and challenge how the estate is handled

Who can be a beneficiary of a will?

Most people can be named as a beneficiary in a will. The person who writes the will (the testator) chooses who will receive their money, property or other assets. Beneficiaries can include family members, friends or even organisations such as charities.

If you leave assets to minors, these will usually be placed in a trust. The child will gain access to them when they turn 18 (unless an older age is stipulated in the will.

However, there are some exceptions. People who witness the signing of the will, and their spouse or civil partner, can’t be named as beneficiaries.

What types of beneficiaries are there?

When someone writes a will, they can name different types of beneficiaries. The main types are:

  • Specific beneficiaries. These are people or groups who are given a particular item or a fixed amount of money. For example: “I leave my gold watch to my nephew.” These gifts are called specific legacies.
  • Residuary beneficiaries. These beneficiaries get what’s left of the estate after all debts, taxes and specific gifts have been paid. For example: “I leave the rest of my estate to my daughter.” This is often the largest share of the estate.
  • Contingent beneficiaries. These beneficiaries only receive something if the primary beneficiary cannot. For example: "I leave £10,000 to my sister, but if she has died before me, then to her daughter." In this case, the niece is a contingent beneficiary who only inherits if the primary beneficiary (the sister) has predeceased the testator.

What rights does a beneficiary of a will have?

The main right a beneficiary has is the right to receive their inheritance. Once any debts and taxes are paid, they’re entitled to whatever has been left to them in the will.

Beneficiaries also have the right to information. They should be told:

  • That they’ve been named in the will.
  • What they’re due to receive.
  • They can request a copy of the will once probate has been granted.

If a beneficiary believes the executor is mismanaging the estate or not acting fairly, they can challenge the executor’s decisions. In serious cases, they can apply to the court to try to have the executors removed.

When will a beneficiary receive their inheritance?

There’s no set time for when a beneficiary will get their inheritance. It depends on a few things. With more straightforward, lower-value estates, it takes between six and 12 months after the person has died. But sometimes it can take longer.

Here are some common reasons for delays:

  • Probate. Executors must get legal permission (called a Grant of Probate) before they can manage the estate. This can take time, especially if things are complicated.
  • Disputes. If someone challenges the will, everything is put on hold until the issue is sorted.
  • Debts and taxes. Executors must pay off any debts and Inheritance Tax before they can distribute assets. Learn more about what happens to debt when someone dies in our guide.
  • Finding beneficiaries. If a beneficiary is hard to find, it can slow things down.

For pecuniary legacies (fixed cash sums left in a will), executors have one year from the date of death to pay these, otherwise interest becomes payable to the beneficiary.

Do beneficiaries pay tax on their inheritance?

Usually, beneficiaries don’t have to pay tax on what they inherit. But Inheritance Tax (IHT) might still apply to the estate before anything is passed on.

Here’s how it works:

  • Inheritance Tax is paid by the estate, not by the people who inherit.
  • The executor of the will takes care of this before sharing out the assets.
  • If the estate is worth less than £325,000, there’s no IHT to pay.
  • If it’s worth more, the amount above the threshold may be taxed at 40%.
  • However, reliefs and exemptions, like leaving assets to a spouse or a charity, can reduce the tax bill.

Beneficiaries might still owe income tax or capital gains tax later. This can happen if they:

  • Earn money from the inheritance (like rental income).
  • Sell inherited items that have gone up in value.
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What’s the difference between an executor and a beneficiary?

An executor and a beneficiary have very different roles in a will.

  • An executor is a person chosen by the person writing the will (the testator). An executor’s job is to manage the estate and make sure the wishes in the will are carried out.
  • A beneficiary is someone named in the will to receive something. This could be money, property or a personal item.

Can a beneficiary also be an executor?

Someone named as an executor in a will can also be a beneficiary. There’s no legal rule against it, and it’s quite common, particularly where there’s only one person initially benefitting under the will, such as a spouse.

However, they must act fairly and follow the wishes set out in the will. This helps avoid any conflicts of interest.

Can a beneficiary refuse an inheritance?

Beneficiaries don’t have to accept what’s left to them in a will. There’s no legal rule that says they must. But if they choose to refuse a gift, they must reject all of it. They can’t accept part and turn down the rest.

There are two main ways to refuse an inheritance:

  • Disclaiming a gift. The beneficiary writes to the executor to say they don’t want the gift. Once they do this, they give up all rights to it. The gift goes back into the estate and is passed on to someone else, based on the will. The original beneficiary doesn’t get to choose who receives it.
  • Deed of Variation. This is a legal document that lets a beneficiary pass their gift to someone else. It only affects their share of the estate. A variation can be made at any time, but it must be completed within two years of the person’s death to be effective for Inheritance Tax and Capital Gains Tax.

How to check if you’re a beneficiary of a will

If you think you might be a beneficiary of a will, of someone who has died, there are a few ways to find out.

  • Contact the executor or solicitor. If you know who they are, reach out directly. It’s their legal duty to inform beneficiaries.
  • Use an online service. If you don’t know who the executor is, you can search using services like The National Will Register. Please note that this isn’t an official register. There are many companies like it that charge a fee to conduct a search, but there’s no legal obligation for people to register their will.
  • Check the Probate Registry. Once probate has been granted, you can request a copy of the will from the Probate Registry. This will show who the named beneficiaries are.

Important

Saga is a registered trading name of Saga Personal Finance Limited, which is registered in England and Wales (company number 3023493). Registered office 3 Pancras Square, London, N1C 4AG. Saga is not authorised or regulated by the Solicitors Regulation Authority (SRA). All legal services are provided by Co-op Legal Services. Co-op Legal Services is a trading name of Co-operative Legal Services Limited which is authorised and regulated by the SRA, under registration number 567391.

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