Beneficiary rights in relation to deceased estates are limited primarily to what is known as the “due execution of the estate”.

This means, basically, that a beneficiary has to stand back and let the legal representatives of the estate get on with its administration, before the distribution of a benefit.

The general rule in regard to when an estate may be distributed is when the beneficiary’s interest “vests”, that is, after the legal representatives have called in all the assets, and paid our any liabilities.

Sometimes gifts are made contingent upon a person reaching a certain age, or doing a certain thing, but depending upon the wording of the gift, the gift may vest in the beneficiary, or the beneficiary’s estate, if the beneficiary dies before the contingency occurs. Once the gift “vests, then the beneficiary can call for the immediate transfer.

A recent Queensland case illustrates the principles involved when a gift on money made in a will to a grandchild to be held upon trust, together with any interest earned by the investment, to be paid to the grandchild upon him reaching the age of 21, and a process to have the gift paid, if the trustee fails to do so.

In Serong v Rixon [2016] QDC 278, the District Court of Queensland was asked to make orders that the executor of an estate pay a specific bequest made to a grandson in his deceased grandmother’s estate. The gift in the will was payable when he turned 21, which occurred in May 2105. The application was brought under a section of the Queensland Trusts Act, which enables the Court to make orders in relation to trusts. Deceased estates are a form of trust, and in any event, the making of the gift to the executor to hold “on trust”creates a further trust, thus invoking this legislation.  The judgment suggests that the executor was refusing to pay the gift to the grandson.

The Court readily found that failing to pay the gift was a breach of the trustee’s duty, and that the payment ought to be made. The Court also ordered that interest calculated in accordance with general civil proceedings calculated from the date the gift should have been paid to the grandson, and proposed that his legal costs also be paid to the grandson by the executor.

The case shows that an executor cannot simply hold on to gifts made in a will for as long as they wish, but that once the gift vests in the sense that a condition is fulfilled, the beneficiary has a right to the immediate transfer of the gift. Simple, sensible and straightforward.