The process in which assets from an estate are distributed to heirs, called probate, is typically a slow one—taking six- to 12-months on average in the UK, but there are even further delays today as HMRC struggles to clear the backlog following the pandemic. The average has now risen to closer to 17 months.
With this in mind, some beneficiaries are looking at ways of receiving their inheritance faster, especially those with debts to clear, or whose life decisions depend on getting the money or property to which they are entitled. This is where an inheritance advance can play an important role.
If you are the beneficiary of an estate, chances are you are not the only one, as most inheritances are divided between multiple beneficiaries or heirs. The key question is, does getting an advance on my inheritance have any effect on the other beneficiaries? Conversely, do the actions of other beneficiaries have any effect on my inheritance?
In most cases the answer is simple: no. The inheritance advance transaction is between the company giving the advance and the specific heir who receives it. The estate as a whole, including other ‘pieces’ within it—the shares of other beneficiaries—are not affected whatsoever. The heir who applied for the advance gets it quickly, and when the probate process reaches the point at which it distributes funds, the inheritance advance company is paid.
If there is no Will or trust in place, the Will is not valid, or some beneficiaries of the Will have died, the estate will be distributed according to the legal rules of intestacy.
Under these rules only married or civil partners, or some close relatives can inherit.
1. Married or civil partners without children inherit the whole estate. Divorced or cohabiting partners are not entitled to inherit.
2. If there is a surviving spouse and children, the spouse will inherit the deceased’s personal property and belongings, up to £322,000 of the estate. The spouse also receives half the remaining legacy, and the rest is distributed equally among all the children.
3. Children of the deceased will inherit the whole estate if there is no surviving married or civil partner. The estate will be divided equally among the number of children.
4. Parents receive the estate of the deceased if there is no surviving spouse or children
5. Siblings who share both parents with the deceased, receive the estate when there are no surviving parents, spouse, or children. If there are no siblings who share the same two parents, the estate is distributed to those who share one parent.
6. Grandparents inherit the person’s estate if there are no surviving parents, spouse, children, or siblings
The next in line to receive the inheritance in equal shares are aunts and uncles, then cousins, then half aunts and uncles and then half cousins.
Those who cannot inherit according to intestacy rules are partners who are unmarried partners, or not in a civil partnership, unless any property is owned under joint tenancy. In this case the surviving partner automatically inherits the deceased person’s share of the property.
With either legal process, probate or intestacy, inheritance advances can be made to one or all the heirs, without any effect on the other beneficiaries.
