Can an executor withhold money from a beneficiary UK?

The answer to can an executor withhold money from a beneficiary UK is ‘yes’, though only for certain reasons.

  • Executors can withhold monies from beneficiaries, though not arbitrarily.
  • Beneficiaries may be unable or unwilling to receive a gift by a will.
  • The executor’s job is onerous and the time taken to execute a will may vary greatly.

Whilst, at the highest level, the role of an executor is to ensure that wishes laid out in a will are fulfilled, doing so correctly places significant duty and obligation on those appointed.

It’s important to differentiate an executor’s withholding money from a beneficiary, from an executor’s simply: ‘doing the job of an executor’.

The time it takes to execute a will may vary enormously. It is not uncommon for the process to take 9-12 months. Moreover, executors owe a statutory duty (2000 Trustee Act) to carry out their functions with due skill and care. They are required to act in the best interests of the beneficiaries of the will and to not harm the estate in any way. This demands precision, diligence and often, delicacy. Executors risk personal liability for failure to follow procedure.

The law recognises the demands placed on an executor and does not allow beneficiaries to force an executor pay out during the first 12 months of their role (the ‘executor’s year).

 

Can an executor withhold money from a beneficiary UK?

Yes, but their reasons for doing so matter!

Firstly, it’s worth noting that an executor’s withholding of money from a beneficiary may arise from the beneficiary’s inability to receive it, or a desire on the latter’s part not to receive it.

Minors are unable to ‘give receipt’ for gifts by a will. In such a situation, executors may be required to retain a minor’s gift (e.g. under a bereaved minor’s trust) until they come of age. Some wills make provision for ‘parental receipt’, whereby an executor may accept receipt from the parent of the intended beneficiary, though this is at the discretion of the executor.

An executor may not force a gift on a beneficiary and so may withhold it. Beneficiaries may agree to refuse gifts by a will, where they wish to so vary for e.g. tax efficiency.

Other scenarios in which money might be withheld from beneficiaries, are limited but include:

  1. Situations in which unspecified creditors come forward. In such cases, settlement of the will may be delayed by up to 6 months as this situation is resolved.

 

  1. Where there are safety concerns. In the case of a child, these are likely to be around parental issues, in which case settlement may be withheld until the child reaches 18.

 

  1. In the case of an adult, concerns over issues such as addiction or mental capacity may lead to a beneficiary’s gift passing into a trust established for their protection.

This article doesn’t cover every situation, and depending on the detail of yours, you may only have a limited time to act. If you suspect you are being treated unfairly, you should contact Dr Simon Pearce at Confidence Wills immediately, who will be able to direct you – 0121 202 4714