If someone dies and doesn’t leave a will, the deceased person’s property (the estate) must be shared out, in line with specific rules – known as the rules of intestacy.
A common question during probate is who gets paid first from an estate in the UK? And how long does it take to distribute the estate to beneficiaries?
Let’s take a look at the length of time it takes for the distribution of the estate to reach beneficiaries.
How long does it take to receive pay inheritance?
Even the most uncomplicated estate will take a while before beneficiaries obtain their bequest.
For example, a straightforward estate lacking a property to sell plus a sole bank account could take just three months.
However, most estates take roughly nine to 12 months to dispense. But if any delays crop up during the process, or there are complicated assets to handle, chances are it’ll take a lot more time.
When do executors pay bequests?
An executor’s sole responsibility is to gather the estate’s assets and resolve any unsettled bills (or liabilities), not forgetting the funeral cost.
Once all debts have been cleared, the remaining amount is then allocated to the beneficiaries.
It’s vital to note the stringent order of importance for dispensing the estate:
- Gifts of certain amounts of money (known as pecuniary legacies)
- The remaining capital in the estate (known as residuary estate)
If the person who died left gifts of specific amounts to several recipients, these must be disbursed first.
The rest of the estate (residuary estate) is any money outstanding once the gifts have been paid.
So, if a beneficiary is eligible for a portion of the residuary estate, they’ll receive payment after anyone who’s receiving certain money gifts.
Cash gifts, though, should never be given precedence over unsettled bills – it’s paramount that every liability is settled before any beneficiaries are paid.
Officially, pecuniary legacies must be dispersed no later than one year of the person’s death, otherwise called the ‘executor’s year’.
However, if the executor can’t pay the pecuniary legacies in that timeframe, the beneficiaries can request interest.
What delays beneficiaries from receiving an inheritance?
An executor’s job is to show a fundamental level of proficiency throughout the estate administration and act in favour of the beneficiaries, which includes not deferring everything unreasonably.
That said, some problems do occur throughout probate, which can postpone things. Here are just some of the issues that may arise:
- Selling a home: When a property needs selling, acquiring a grant of probate prior to the exchange of contracts is critical – this can take between three to six months to get. Furthermore, it can be difficult to gauge the time it takes to sell a probate property, as conveyancing isn’t an easy procedure and comes with its own delays
- A DWP investigation: If the Department for Work and Pensions (DWP) investigates any benefits the deceased obtained, this may add an extra six to nine months before the last amount owed is verified as a liability of the estate
- An absent beneficiary: Delays may arise if a beneficiary can’t be contacted or located. The executor must conduct investigations to find them, typically by hiring a tracing agent
Distribution of estate to beneficiaries: final thoughts
Dealing with the distribution of an estate can be a long and tedious process. It’s best to be patient and let the executor take care of everything for you.
Do you need help with your accounting issues? Get in touch with Accountants East London today – we’re here to help.