What Do The Beneficiaries Of A Will Inherit From Someone Who Has Died?

If the deceased had a valid Will, the Beneficiaries are the people who are receiving an inheritance under the Will.

You should read the terms of the Will to determine who the beneficiaries are and what they are entitled to.

If you have any issues regarding the interpretation of the Will, it is best to get legal advice.

Here is some general information about how to interpret a Will.

Residuary clause

A properly drafted Will has a residuary clause. This is basically a catch-all clause that divides everything that is left over, after the specific gifts (see below) are distributed.

A residuary clause might have the words “I give my estate” or “I give the balance of my estate” or “my residuary estate”.

This means that after all the specific gifts are distributed, and the debts are paid, the remaining assets (provided there is a leftover) are divided between the people or organisations specified in the residuary clause.

Specific gifts

The Will might have specific gifts to individuals or organisations.

These specific gifts can include payment of money or gifts of certain property (such as houses, cars, money in bank accounts).

Provided the debts of the estate are settled first, generally speaking, the first distribution is made to those beneficiaries that are entitled to a specific gift of money or property.

After these specific gifts have been dealt with, then the beneficiaries entitled under the residuary clause are entitled to be paid.

If there are insufficient funds in the estate to make the specific gifts, then the residuary beneficiary will obtain no benefit from the estate.

Gift Does Not Exist

If a specific gift mentioned in the Will does not exist at the date of death, then that specific gift will fail and is simply ignored.

Death of a beneficiary

Where a beneficiary dies before the deceased person died, then unless there is anything specifically mentioned in the Will, the gift to deceased beneficiary will fail, and will be divided in accordance with the residuary clause.

One exception to the above rule is there are some State and Territory laws which specify that if a beneficiary dies leaving children, then the deceased beneficiary’s share may automatically pass to their children.

You should get legal advice if you are confused about this.

Charity defunct

If a charity no longer exists, there may be an obligation to uphold the deceased person’s charitable intention and give the gift to a similar charity.

Legal advice should be obtained if this is the case.

Beneficiary refusing a gift

A beneficiary does not have to accept a gift in a Will.

If a beneficiary does not wish to accept the gift, it is best practice to get the beneficiary to sign a document ‘disclaiming’ the gift.

Deceased owing beneficiary money

If a person receives a gift of money in a Will, and the deceased person also owes that beneficiary money, then it is likely that the gift left in the Will cancels out the equivalent portion of the debt owed to that beneficiary by the deceased person.

However, get legal advice if there is any confusion or there if it’s a significant amount.