Keystone Law Group partner Lindsey Munyer talks about the six most significant rights of estate beneficiaries. Read the complete article below for more details. Press the “Subscribe” button on YouTube to receive updates whenever new videos are uploaded.
Understanding your rights as a beneficiary is crucial to ensure that you receive the inheritance intended for you and that the distribution process is fair and transparent. This comprehensive guide will delve into the various rights beneficiaries have, including those pertaining to wills, trusts, life insurance policies, and retirement accounts.
Navigating Beneficiary Rights: A Legal Framework
Beneficiary rights are established and protected by various legal frameworks, including state and federal laws, regulations, and contractual agreements. Understanding these frameworks is essential for safeguarding your interests and ensuring that your rights are upheld.
Rights of Beneficiaries in Wills and Trusts
Wills and trusts are legal instruments designed to distribute assets after an individual’s passing. Beneficiaries of these instruments have specific rights:
- Right to Information: Beneficiaries have the right to receive information about the will or trust, including its contents, the value of the assets, and any relevant appraisals or valuations. This information should be provided promptly and transparently.
- Right to Distributions: Beneficiaries have the right to receive distributions from the asset in accordance with the will or trust’s provisions. These distributions may be made in a lump sum or over time, depending on the document’s terms.
- Right to an Accounting: Beneficiaries have the right to receive an accounting of the asset’s value and how it has been managed. This accounting should include any profits or losses incurred since the decedent’s death and should be presented transparently.
- Right to Challenge a Will or Trust: If a beneficiary believes the will or trust is unfair or biased, they have the right to challenge it in court. This process should be undertaken with legal counsel to ensure their rights are protected throughout.
Rights of Beneficiaries in Life Insurance Policies
Life insurance policies are designed to provide financial support to designated beneficiaries upon the policyholder’s death. Beneficiaries of these policies have specific rights:
- Right to Claim Proceeds: Beneficiaries have the right to claim the policy’s proceeds upon the policyholder’s death. This process should be straightforward and prompt when proper documentation is provided.
- Right to Change Beneficiary Designation: Beneficiaries have the right to change the beneficiary designation of a life insurance policy if the policyholder allows it. This can be important if the original beneficiary passes away or if the beneficiary’s circumstances change.
- Right to Assign Policy Benefits: Beneficiaries have the right to assign their policy benefits to another individual or entity if the policyholder allows it. This can be useful if the beneficiary wants to transfer the proceeds to a trust, a charity, or another family member.
Rights of Beneficiaries in Retirement Accounts
Retirement accounts, such as IRAs and 401(k)s, are designed to provide financial support to individuals during their retirement years. Beneficiaries of these accounts have specific rights:
- Right to Receive Required Minimum Distributions (RMDs): Beneficiaries have the right to receive RMDs from the account. RMDs are designed to ensure that the account is distributed in a timely manner and in accordance with federal regulations.
- Right to Rollover Inherited IRA: Beneficiaries of an inherited IRA have the right to roll over the account into their own IRA or a new inherited IRA in their name. This process should be done through the proper channels to ensure that the account is distributed in accordance with federal regulations.
- Right to Disclaim Inherited Retirement Account: Beneficiaries of an inherited retirement account have the right to disclaim the account if they do not wish to inherit it. This process should be done through legal counsel to ensure that the beneficiary’s rights are protected throughout the process.
Understanding Beneficiary Rights: Key Takeaways
As a beneficiary, understanding your rights is crucial to protecting your interests and ensuring the distribution process is fair and transparent. By knowing your rights and seeking professional guidance when necessary, you can ensure that you receive the inheritance intended for you and that your rights are upheld.
Additional Resources:
- Trust & Will: https://trustandwill.com/learn/beneficiary-rights
- Guest and Gray Law Firm: https://www.guestandgray.com/what-are-the-rights-of-beneficiaries.html
Disclaimer: This information is for educational purposes only and should not be considered legal advice. Please consult with an attorney for legal advice specific to your situation.
As a Beneficiary of a Will, What Are My Beneficiary Rights?
As an estate beneficiary, you are guaranteed certain rights. The first step to ensuring you receive the inheritance to which you are entitled is to understand your beneficiary rights. The last thing you want to do is watch helplessly as management happens. Rather, take the initiative to become aware of your beneficiary rights and make sure they are upheld throughout the entire administration process.
If you’ve been notified by the executor of the estate that you’ve been named as an estate beneficiary, you’re probably wondering what your rights are as a beneficiary of a will are: Can I see a copy of the will? Can I get information from the executor about the estate? Can I remove the executor if they act improperly or unethically?
The answer to all of these questions generally is yes. Beneficiaries of estates have rights that are crucial for safeguarding against theft of inheritance and preventing financial harm to the estate from the personal representative, interested parties, or other parties. If estate assets are threatened, beneficiaries will be able to stop misconduct by acting appropriately if they are aware of their inheritance rights.
The most important rights of estate beneficiaries include:
- the right to promptly receive the assets bequeathed to them
- The right to receive information about estate administration (e. g. , estate accountings).
- The ability to ask for an executor or administrator to be suspended or removed
- The authority to act in their best interests as an executor or administrator
Estate beneficiaries should remember that executors and administrators are fiduciaries. Stated differently, they must always act in the best interests of the estate beneficiaries.
As an example, the duty of impartiality imposed on executors and administrators prohibits them from favoring some beneficiaries over others. Additionally, there is an unwavering duty of loyalty owed to executors and administrators, who should never prioritize their own interests over those of the estate beneficiaries.
Maintaining appropriate information for estate beneficiaries is a crucial aspect of the administrator/executor’s responsibilities. Stated differently, the personal representative is required to furnish beneficiaries with the necessary information to enable them to assert their beneficiary rights. Let’s say the executor is not getting in touch with the beneficiaries or is not willing to give an accounting. Given that the beneficiaries would not have any way of learning about the decisions made by the personal representative, the decedent’s debts, or the assets to which they are entitled from the estate, this could be regarded as executor misconduct.
Estate beneficiaries should contact an estate lawyer if executors or administrators fail to fulfill the aforementioned responsibilities. The lawyer can use the legal system to force the executor or administrator to give beneficiaries accountings and information about administration. Your attorney may ask the court to remove the executor or administrator and possibly impose a surcharge if the issue cannot be resolved.
Despite their extensive rights, beneficiaries of estates should keep in mind that executors and administrators are not obligated to include beneficiaries in every decision they make. It is crucial for estate beneficiaries to actively participate in administration and remain informed at every stage of the procedure if they wish to have a say in decisions pertaining to the estate.
What Is an Estate Beneficiary?
An individual who is eligible to receive a decedent’s assets is known as an estate beneficiary, and they are typically named in the decedent’s will.
When someone dies without a will (i. e. , they pass away intestate), their possessions will go to their heirs through intestate succession, which establishes the priority of heirs’ inheritance. Heirs are close family members of the decedent (e. g. , children, and surviving spouse) who are entitled to the intestate estate of the deceased
Check out our piece on beneficiary rights in trusts if you’re inheriting from one.
What Rights do Trust Beneficiaries Have?
FAQ
What powers does a beneficiary have?
Do beneficiaries have enforceable rights?
Does a beneficiary have right to see financial statements?
What overrides beneficiaries?
What are the rights of a trust beneficiary?
The rights of a trust beneficiary depend on the type of trust and the type of beneficiary. With a revocable trust, the person who set up the trust can change it or revoke it at any time. If the trust is revocable, the beneficiaries, other than the grantor, have very few rights.
What are my rights as a beneficiary?
As a beneficiary, you have the right to a reasonable report of the following as they relate to the Trust: Current beneficiaries also have the right to petition the court to remove the Trustee if they believe the Trustee isn’t acting in their best interest.
What if I am a beneficiary of a trust?
As a beneficiary of a Trust, it is important you familiarize yourself with how distributions from your Trust work and how to claim the inheritance that you are entitled to. As a beneficiary, you are entitled to the timely distribution of payments from the Trust as outlined in the Trust document itself.
Who is a current beneficiary of a trust?
Current beneficiaries are beneficiaries who are currently entitled to income from the trust. Remainder or contingent beneficiaries have an interest in the trust after the current beneficiaries’ interest is over. For example, a wife may set up a trust that leaves income to her husband for life (the current beneficiary).