When will I receive my inheritance? 

One of the first questions we are usually asked after someone has died is: "When will the beneficiaries receive their inheritance?"

It's a completely understandable question and, quite often, one of the hardest to answer.

Many families assume that once probate has been obtained, the estate can be distributed and everything wrapped up. In reality, obtaining the grant is often just the beginning of the administration process.

Even estates that appear relatively straightforward at the outset can encounter delays, unexpected issues and additional work before the executors can safely make final distributions.

Understanding the reasons for these delays can help manage expectations and, importantly, protect executors from making costly mistakes.

Executors are responsible for establishing the full extent of the estate. Whilst some assets are easily identified, others may not be.

There may be:

• bank accounts that have not been used for many years
• investments held through multiple providers
• premium bonds
• shareholdings
• business interests
• foreign assets
• valuable personal possessions requiring specialist valuations.

Financial institutions and third parties each work to their own timescales and information is not always available immediately. Delays in receiving valuations or responses can slow the administration, even where everyone involved is working proactively.

One of the biggest surprises for families is that the tax work does not necessarily end when the Inheritance Tax return has been submitted or the grant has been issued.

Executors may need to deal with:

• Income Tax arising after death
• Capital Gains Tax on the sale of assets
• adjustments to previously submitted Inheritance Tax returns
• HMRC enquiries
• obtaining final tax clearances.

Many people are surprised to learn that tax considerations continue during the administration period.

A property sold for more than its probate value, for example, may create a Capital Gains Tax reporting requirement. Equally, information may come to light during the administration which requires an amendment to the original Inheritance Tax reporting.

Executors should be careful not to assume that all tax matters have been resolved simply because the grant has been issued.

Executors have a duty to protect the estate and ensure that the correct beneficiaries receive the correct entitlements. 

Whilst beneficiaries are naturally keen to receive their inheritance, executors need to balance those expectations against their responsibility to ensure that all assets, liabilities and tax matters have been properly dealt with before making final distributions.

This can sometimes mean delaying distributions where:

• the value of assets has not been finalised
• tax matters remain outstanding
• liabilities have not been fully established
• estate accounts are still being prepared
• there is uncertainty surrounding a beneficiary's entitlement.

Whilst this can understandably be frustrating for beneficiaries, distributing an estate too early can create significant difficulties if an unexpected debt, tax liability or claim comes to light later. In some circumstances, executors can become personally liable for those costs if there are insufficient estate funds remaining to meet them.

For that reason, a degree of caution is often necessary. Taking a little longer to ensure matters have been finalised properly can help avoid much larger problems further down the line and provides protection for both the executors and the beneficiaries

In some cases, an interim distribution may be appropriate to provide beneficiaries with access to part of their inheritance whilst outstanding matters are resolved. However, executors should ensure that sufficient funds are retained to cover any remaining liabilities, taxes and administration costs before doing so.

Before making final distributions, executors should be able to demonstrate how they have administered the estate.

Estate accounts typically show:

• the assets and liabilities at the date of death
• money received during the administration
• expenses paid
• tax liabilities
• distributions made
• the final entitlement of each beneficiary.

These records provide transparency for beneficiaries and help protect executors by demonstrating that the estate has been administered properly.

Every estate is different and no two administrations follow exactly the same path.

For executors, one of the most important responsibilities is balancing efficiency with caution. Moving too slowly can cause frustration, but moving too quickly can create significant risk.

Some estates can be completed relatively quickly. Others involve property sales, business interests, complex tax issues or family circumstances that take time to work through properly.

Whilst waiting for an inheritance can be frustrating, a careful and methodical approach is usually in everyone's best interests. Taking the time to gather the right information, resolve outstanding issues and ensure the figures are correct helps protect both the beneficiaries and the executors.

Probate is rarely just about obtaining the grant. More often than not, it is the work that follows that determines how smoothly the administration progresses and when beneficiaries can receive their inheritance with confidence. For more information on the issues outlined or advice on your individual circumstances please get in touch with your usual Crowe UK contact.