Being named as a beneficiary in someone’s will, trust, or insurance policy is both an honor and a responsibility. But many people don’t realize they have specific legal rights that protect their interests. I’ve seen countless situations where beneficiaries simply accept whatever information they’re given without questioning – and sometimes that leads to problems.
As someone who has helped many clients get through this tricky area, I think it’s important that you know your rights as a beneficiary. If you’re a beneficiary now or might be in the future, it can make a big difference to know what you’re legally entitled to.
What Exactly Is a Beneficiary?
Before diving into rights, let’s clarify what a beneficiary actually is. A beneficiary is any person or entity named in a legal document like a will, trust, insurance policy, or retirement account to receive assets after someone passes away.
Beneficiaries can include:
- Family members
- Friends
- Charities or organizations
- Trusts
The Core Rights of Beneficiaries
Regardless of whether you’re a beneficiary of a will, trust life insurance policy, or retirement account you have several fundamental rights. These rights are designed to protect your interests and ensure the person managing the assets acts appropriately.
1. The Right to Information
One of the most important rights beneficiaries have is the right to information. This includes:
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Right to Official Notice: When someone dies, the executor or trustee must officially let all named beneficiaries know about their part in the will or trust.
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Right to Look at Documents: You can ask for and get full copies of the will or trust agreement to find out exactly what rights you have.
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Right to Accounting: You’re entitled to detailed financial reports showing all activity within the estate or trust. This includes initial assets, income earned, expenses paid, and distributions made. Trustees often need to provide this information annually.
As a beneficiary, I’ve found that requesting regular updates about the estate administration helps prevent misunderstandings and ensures transparency.
2. The Right to Timely Distributions
Beneficiaries have the right to receive their inheritance in a reasonable timeframe. However, “timely” doesn’t necessarily mean “immediate.” The executor or trustee must complete several administrative tasks first:
- Identify and inventory all estate assets
- Pay the deceased’s final debts and taxes
- Settle administrative expenses
For a simple estate, distribution might happen within 6-12 months. More complex estates can take several years. The timeline depends on factors like:
- Need to sell real estate
- Filing final tax returns
- Settling outstanding debts
The fiduciary must ensure all liabilities are paid before distributing assets. Distributing too early could make them personally liable for any unpaid estate debts.
3. The Right to Proper Asset Management
The person managing the estate or trust (the fiduciary) has a legal obligation to manage assets with a high standard of care. This “fiduciary duty” requires them to act in the best interests of beneficiaries and includes several specific obligations:
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Duty of Loyalty: The fiduciary must only do what’s best for the beneficiaries and not for their own gain. Self-dealing is prohibited.
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Duty of Impartiality: The fiduciary cannot favor one beneficiary over another and must treat all beneficiaries equitably.
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Duty of Prudence: Often defined by a state’s version of the Uniform Prudent Investor Act, this requires managing and investing assets as a careful person would, considering the purposes of the trust and appropriate risk levels.
4. The Right to Enforce Fiduciary Duties
If a fiduciary fails to meet their obligations, beneficiaries can take legal action. This might be necessary if an executor or trustee:
- Refuses to provide information
- Mismanages assets
- Causes unreasonable delays
Enforcement methods include:
- Petition to Compel Accounting: Asking a judge to order the trustee to produce financial records
- Petition for Removal: In cases of serious misconduct, beneficiaries can ask the court to remove the fiduciary and appoint a successor
- Surcharge: The court may order a removed fiduciary to repay financial losses they caused
Specific Rights Based on Asset Type
Different types of assets come with slightly different beneficiary rights:
Rights in Wills and Trusts
In addition to the core rights above, beneficiaries of wills and trusts have:
- Right to Challenge: If you believe a will or trust is unfair or biased, you have the right to challenge it in court. This should be done with legal counsel.
Rights in Life Insurance Policies
For life insurance beneficiaries:
- Right to Claim Proceeds: You can claim the policy proceeds upon the policyholder’s death, usually through a straightforward process.
- Right to Change Beneficiary Designation: If the policyholder allows it, you may be able to change the beneficiary designation.
- Right to Assign Policy Benefits: You may assign your benefits to another individual or entity if the policyholder permits it.
Rights in Retirement Accounts
Beneficiaries of retirement accounts like IRAs and 401(k)s have:
- Right to Receive Required Minimum Distributions (RMDs): These ensure the account is distributed in a timely manner according to federal regulations.
- Right to Rollover Inherited IRA: You can roll over an inherited IRA into your own IRA or a new inherited IRA in your name.
- Right to Disclaim: You can disclaim (refuse) an inherited retirement account if you don’t wish to receive it.
What Beneficiaries Cannot Do
While beneficiaries have important rights, there are also limitations. Beneficiaries cannot:
- Force immediate distribution: Executors and trustees must follow legal processes before distribution.
- Dictate how assets are managed: While you can request information, the fiduciary makes the management decisions.
- Remove an executor without cause: There must be valid reasons like misconduct, criminal conviction, or incapacity.
Common Beneficiary Scenarios and Solutions
Scenario 1: Lack of Communication
If the executor isn’t communicating:
- Send a formal written request for information
- Set a reasonable deadline
- If unsuccessful, consult an attorney about petitioning the court
Scenario 2: Suspicion of Mismanagement
If you suspect asset mismanagement:
- Request a detailed accounting
- Compare with any previous accountings for discrepancies
- Consider hiring a financial professional to review the documents
Scenario 3: Significant Delays
For unreasonable delays in distribution:
- Ask for a written timeline and explanation
- Request updates on remaining tasks
- If delays continue without justification, legal action may be necessary
How to Protect Your Rights as a Beneficiary
To ensure your rights are protected:
- Stay informed: Request regular updates about the estate administration
- Keep records: Maintain copies of all communications and documents
- Ask questions: Don’t hesitate to seek clarification about anything you don’t understand
- Know the timeline: Understand what’s reasonable for your specific situation
- Get professional help: Consult with an attorney who specializes in estate law if needed
When to Seek Legal Help
Consider consulting an attorney if:
- You’ve been denied access to information
- You suspect mismanagement or fraud
- Distribution is taking unreasonably long
- The executor or trustee is unresponsive
- You need to challenge a will or trust
Understanding your rights as a beneficiary empowers you to ensure fair treatment during the estate administration process. While most executors and trustees fulfill their duties ethically, knowing what you’re entitled to provides an important safeguard.
The most crucial rights include access to information, timely distribution, proper asset management, and the ability to take action if these rights aren’t respected.
If you’re currently a beneficiary and have concerns, don’t hesitate to ask questions and seek professional guidance. Your inheritance rights are protected by law, and you deserve to have them respected.
Disclaimer: This information is for educational purposes only and should not be considered legal advice. Please consult with an attorney for guidance specific to your situation.
What Are Beneficiaries of an Estate or Trust?
Beneficiaries are people named in a will, trust, or other estate document, designating them as someone to receive assets from the estate. In a trust, the beneficiary is the person who gets something good from the trust’s assets, sometimes by having a trustee give money to them.
Beneficiaries are not the same thing as heirs. Heirs are people who can be beneficiaries and would also get money from an estate even if there is no will or other legal document. This is because they meet the requirements of state intestacy laws. Those are the laws that govern how assets are disbursed among relatives should someone pass away without a will.
Beneficiaries have legal rights within the context of an estate. That includes the right to be informed about their beneficiary states and to question or challenge certain things related to the estate.
The Right to Be Informed
In general, beneficiaries have the right to information about the will or trust and their relationship to it. With wills and other probate matters, this is straightforward, as notice of probate is required by law. When an estate is probated, the law in New Jersey requires that the next of kin and any named beneficiaries (or any known heirs) are notified:
- When and where the will was probated
- Who the personal representative or executor is and where they live was asked for.
- That a copy of the will is available upon request
The executor of the estate typically handles this duty. They must mail a notice with this information to all named beneficiaries and the next of kin. In cases where the executor does not have a mailing address for someone who needs to receive this notice, the notice must be published in an appropriately circulating newspaper.
Beneficiaries to estates and trusts also have a right to ongoing information regarding the estate. The law and the terms of a trust may decide what information is important to a beneficiary. Also, trusts don’t go through probate, so notification rules are different.
What rights do beneficiaries have?
FAQ
What are the powers of a beneficiary?
What Beneficiaries Can Do in Court: If beneficiaries think a trustee has broken their duty, they can go to court against the trustee. This can include actions such as refusal to provide financial information, misappropriation of trust assets, or failure to manage investments properly.
Can an executor ignore a beneficiary?
An executor can override a beneficiary when they are acting in accordance with state statutes, the terms of a will and the level of legal authority they’ve …May 21, 2025.
Can an executor withhold money from beneficiaries?
Yes. Executors can withhold money from a beneficiary in certain circumstances, if withholding complies with applicable legal standards and fiduciary duties.
What does a beneficiary have access to?
… can be designated for all of your important assets, including property, insurance policies, retirement accounts, brokerage accounts, bank accounts, and more.