What is a beneficiary?

When your loved one passes away, it can be an incredibly emotional time for you and anyone else close to the deceased. Issues of beneficiaries and inheritance only makes this process more sensitive, stressful and drawn out. 

This guide to beneficiaries and Wills can help you be prepared with the information you need when becoming a beneficiary, or before appointing your own beneficiary.

Definition of beneficiary 

A beneficiary is the person or people named in a Will, to be gifted items, or receive an inheritance, from an estate when someone dies. A beneficiary does not need to be an individual – it can be a person, group of people, or an organisation.

What happens if I am a beneficiary?

You’ll be made aware that you are a beneficiary if you are not already, most likely by the executor of the Will. Beneficiaries are entitled to receive their gift or benefit within 12 months of the deceased’s death. If there is a delay in receiving the inheritance, the executor must provide a reason for this.

If you need help with the estate administration process, chat with our estate lawyers on 1800 343 119 or visit our Estate Services page here.

Writing my own Will

When it comes to writing out your own Will, it’s important to note down all your assets and anyone you would like to leave your estate to.

Who can be my beneficiary?

If you’re in the process of estate planning, making a Will and nominating a beneficiary, you’ll need to include some clear identifying information about them, including their full name and address. This will help the Executor of the Will find them when handing over their inheritance.

Your beneficiaries can be people or organisations who are important to you in life. Most people choose family and friends, however some people will also choose to bequeath some or all of their estate to a cause, organisation or charity they would like to give to after their passing. 

Choosing a beneficiary is a deeply personal decision and shouldn’t be rushed into. Think about who or what you value and who you would like to financially take care of after your passing.

If a beneficiary predeceases you (dies before you), the common approach is to make a new Will naming a different beneficiary. Otherwise, any items gifted to a deceased beneficiary forms part of the remainder of your estate, known as your residuary estate.

If you are including minor children in your Will, you may want to add provisions for somebody to be a caretaker of the assets until the children are 18 years old. Alternatively, you can leave funds in a trust that the children cannot touch until they are of legal age. 

Changing my beneficiary

If your circumstances change or your original beneficiary passes away before you, you may amend your Will to change your beneficiary. Amending a Will can be a cumbersome process, as you’ll have to make an official alteration, known as a codicil. These changes must be witnessed and signed just like a Will, and if you make multiple codicils over time, they must be kept with the Will.

It’s often safer to make a new Will altogether, as additional codicil pages may be become misplaced or separated from the original Will, particularly if you are adding multiple codicils as years go by. Additional codicils also leave room for error if they include conflicting bequests or instructions. A new Will immediately revokes all Wills made before it.

When should I update my Will?

Wills and estate plans shouldn’t be a ‘set and forget’ approach, but reviewed every few years or whenever there is a significant change to your personal or financial circumstances. For example, make a new Will, as soon as possible, if there is a change in your relationship: if you marry, divorce, separate, have children, or enter into or end a de facto relationship.

You should also update your Will if you buy or sell a major asset like a house or car. Any items that you’ve listed as specific bequests will need to be updated if they are no longer in your possession.

If you, or anyone else named in your Will changes their name or contact details, you should update your Will. Ensuring information is current and correct makes it easier for your executor to carry out your wishes.

How to disinherit relatives (by accident and intentionally)

If you want to disinherit a close relative or dependant out of your Will, such as a child or spouse, it’s not as easy as simply leaving their name out. Dependants who are left out of a Will, or who aren’t left as much as they expect, are able to apply for a proportion of your estate for their maintenance.

To discourage your Will being challenged, you should include a supplementary statement to explain that you are not providing for a dependant or close relative, for example: “I leave my son/daughter/spouse nothing in this Will”. Acknowledging you have intentionally left a close relative or dependent out of your Will won’t prevent that person from challenging the Will, but it means they can’t argue that they have simply been overlooked or forgotten.

Can an Executor change a beneficiary?

The Executor doesn't have authority to make any changes to a deceased person's Will, including changing a beneficiary. However, a Will can be contested if someone feels they have been unfairly left out as a beneficiary.

Can my Will be contested?

If somebody believes they should have been a beneficiary of your will and have been unfairly left out, they may be able to contest your Will.

To discourage your Will being challenged or contested, you can include a statement to explain that you are not providing for a dependant or close relative, such as: “I leave this person nothing in this Will”. Acknowledging you have intentionally left this person out of your Will won’t prevent them from challenging the Will, but it means they can’t argue that they have simply been overlooked or forgotten.

The validity of a Will can also be challenged if there is a good reason. This can be based upon a number of factors including if the situation is grossly unfair; financial dependence; undue influence or a lack of mental capacity.

Regular reviews ensure a Will remains current and that the beneficiaries and assets remain correct. A review of your Will at least every five years is the common approach, to ensure that all details are current and correct.

To learn more, visit the Bare Law website or chat with our estate team for a free consultation, on 1800 343 119

You can also read our articles: What can be paid out of a deceased estate account and How to make a Will.

Disclaimer: This article provides general information only and does not constitute professional advice. Please consult a qualified expert for guidance specific to your situation.