Planning distributions

By Tolley
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The following Trusts and Inheritance Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Planning distributions
  • Beneficiaries
  • Managing the funds
  • Legacies
  • Distribution of residue
  • Tax considerations

Beneficiaries

The personal representatives will have identified the beneficiaries of the estate at an early stage. See the Introduction to deceased estates guidance note. At what point should they advise them of their entitlement under the Will or intestacy? The close family of the deceased will usually be aware of their entitlement, but there is no obligation to inform more 'distant' beneficiaries before the grant is issued because the Will is not proved to be valid until then. Under intestacy, the appointment of the administrators is not confirmed until the grant. So the PRs will have time to establish who the beneficiaries are and the extent of the estate before making contact.

When the PRs are ready to inform the beneficiaries of their entitlement, it is recommended that they should:

  • for legatees, advise them of the item or amount of the legacy, or
  • for residuary beneficiaries, advise them of their share of residue with an estimate of the monetary value, and provide them with a copy of the Will, or (under intestacy) an explanation of their entitlement
  • tell them of any conditions or wishes attached to the bequest
  • give an indication of when they expect to make payment
  • ask them:
    • to confirm their address for correspondence
    • to provide identity documents
    • how they would like to be paid

Depending on the nature of the bequest, an ongoing dialogue with beneficiaries may be required, taking into account their needs and wishes. In particular, arrangements will need to be made to provide for dependants of the deceased. Beneficiaries may wish to consider varying their entitlement and will need adequate time to take advice and effect the changes. See the Deeds of variation guidance note and the following

More on Administering the estate: