Can an executor withhold money from a beneficiary?

An executor can withhold money from a beneficiary only if there is a legitimate reason that is based on protecting the interests of the estate. 

Reasons for withholding money may be to do with settling debts or other expenses, waiting periods related to unknown creditors, legal or will disputes or if the estate needs to wait for any assets to be sold.

At Provira, we work with families going through confusing legal processes every day and we know that experiencing this while grieving can often feel overwhelming.

But you have options. 

Our Inheritance Advance offers families the opportunity to move forward with confidence, providing access to up to 50% of their inheritance almost straight away. 

To find out more about our Inheritance Advance, click here.

When can an executor withhold money from a beneficiary? 

An executor can withhold money from a beneficiary when there is a valid reason. Often, funds are withheld while other
elements of the estate are being settled. 

An executor can withhold money when: 

Paying off estate debts

All estate debts must be settled before any funds are distributed to beneficiaries. These could range from debts the deceased owed at the time of death, probate or court fees, fees for solicitors or accountants, any estate administration costs, funeral expenses to any liabilities post death such as utility bills or rent.

Covering Inheritance Tax

Paying off Inheritance Tax is one of the first steps an executor has to take when managing an estate. HMRC requires IHT to be paid within 6 months of the date of death. If the deadline is missed, the estate is charged interest on late payments and may face possible penalties. For executors who are struggling to meet the 6-month Inheritance Tax deadline, we also offer our Estate Advance.
Find out more here.

Waiting for creditors

Part of the probate process requires the death to be publicly announced. After this, there is a period of time that must be given for creditors to come forward if they are owed money by the deceased. Many executors will allow more than the statutory 2 months as there is a risk they could become personally liable if a creditor were to come forward at a later date. 

Waiting on the sales of assets

If an estate has a large amount of varied assets, this can delay proceedings until everything has been sold or liquidated. Property sales often extend the wait time significantly. If an estate is particularly complex and has foreign assets involved, families could face a much longer wait for their inheritance. 

Finding beneficiaries

When a beneficiary is proving tricky to track down, executors need to prove they have made reasonable efforts to locate them before distributing money to the other beneficiaries. These include notices in newspapers, tracing agents or even using genealogy firms, and all can take time.

Setting up trusts

Executors may need to make alternative arrangements if a beneficiary is under the legal age of inheritance specified in the will (this can be 18 or 21) or if the beneficiary is lacking mental capacity, has mental health issues or has problems with addiction. In these circumstances, a trust is often set up to hold the money and protect it.

There are legal or will disputes

These delays are often a result of someone challenging the will, claims being made against the estate or beneficiaries disagreeing on how the estate is being distributed. 

Probate is delayed

As the estate cannot be legally distributed until probate is complete, administrative delays are the most common reason why executors withhold money from a beneficiary. This is due to the probate process taking a long time simply as a result of the many legal steps involved, not to mention the added time it takes when an estate is particularly complex. 

How long can an executor withhold money from a beneficiary?

An executor generally has up to 12 months from the date of death to distribute the estate without beneficiaries being able to object in any way or needing to provide a reason for withholding funds. 

This is a standard timeframe for the administration of straightforward estates.

However, based on the reasons we’ve outlined above, it can often take 12 months or more for beneficiaries to see their inheritance. 

If you’re a beneficiary and you’re stuck waiting for an inheritance, our Inheritance Advance is a type of loan designed to help you access part of your inheritance early. Often within days.

With Provira’s Inheritance Advance, you can access up to 50% of your inheritance with:

• No need to wait for probate to finish

• No credit checks

• No compound interest payments, only simple interest

• No monthly repayments

• No need to put down any collateral 

The loan is repaid directly from the estate when funds are released, so you don’t even need to worry about paying it
back.

Plus, one of our compassionate members of our team will be dedicated to your case to guide you throughout the entire
process. 

To explore if this loan is right for you, apply to speak with a member of our team here.

Do all beneficiaries have to be paid at the same time?

No, they do not. When beneficiaries receive their inheritance depends on a clearly defined priority order that estates are distributed in. 

Beneficiaries will be split into three types; Specific, Pecuniary or General, and Residuary. As both the items within the estate and the value of the items varies, it is key to know which category you fit into. 

Specific 

These beneficiaries receive particular items such as jewellery or furniture. As these are physical items and not cash inheritance which is based on the total value of the estate, they often receive their inheritance first. 

General or Pecuniary

If a beneficiary has been allocated a specific amount of money, they will fall into this category. The wait for their inheritance depends on all the factors listed above as they receive their funds only when the estate has been settled. The final value of the inheritance may also be affected by the value of the estate when probate is complete. For example, high levels of debt might impact how much they receive as the funds might not be available. 

Residuary

As the name implies, if you are a residuary beneficiary, you receive funds only after all other beneficiaries have received their inheritance and the estate has been fully settled. The amount received is the most likely to be affected by any debts the estate has to pay off.

Is withholding inheritance illegal?

It is only illegal when it is done for the wrong reasons. Paying off debts and expenses, waiting on sales of assets, legal or will disputes or creditor delays are all legal reasons for inheritances to be withheld.

It becomes illegal when it is done for personal benefit, gain or reason, there is no justification for withholding funds or funds have been misused. 

This is why it is always advised that executors have legal support in administering an estate, as it ensures they are compliant and that they don’t run into any issues that may lead to putting themselves at risk personally.

Can an executor override a beneficiary?

In short, no. While an executor does not have the power to override a beneficiary when it comes to terms of the will or their inheritance, they are able to make administrative decisions throughout the probate process if it is in the best interests of the estate. 

If the deceased has been thorough in their estate planning, there should only be a minimal amount of intervention involved. 

Either way, as executors are appointed to manage an estate, they are able to make certain decisions about the estate that beneficiaries might not agree with. 

These include:

• When to sell a property

• How and when to pay off debts

• Which asset to liquidate

• When to distribute inheritances (within reason)

Ultimately, they cannot change the fundamentals of the will, so the ways in which an executor can override a
beneficiary will be on administrative decisions.

How Provira can help 

While executors can only withhold money from a beneficiary for legitimate reasons, unfortunately it’s difficult to avoid delay, even in the most straightforward of cases.

And, as a beneficiary, the process is often entirely out of your control. 

That’s why we’re so proud that our Inheritance Advance offers so many families a way forward. 

We promise: 

• Access to up to 50% of your inheritance in just a few days

• To charge simple interest, not compound interest, saving you money in the long run

• No credit checks or collateral requirements

• A dedicated, supportive member of our team to guide you every step of the way.

For more information, fill out our form today. It only takes a few minutes and we’ll be in touch very soon.