The Hive Law - Estate Planning - Wills - Trusts

What Happens If A Beneficiary Does Not Claim Their Inheritance (Who Gets It?)

What Happens If A Beneficiary Does Not Claim Their Inheritance

What happens if a beneficiary does not claim their inheritance?

In this article, you’ll learn about: 

  • what happens to the inheritance
  • what clauses to look for in the will
  • things an executor should know
  • the steps an executor should take

Let’s dig in. 

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Key Points About A Beneficiary Not Claiming Their Inheritance

  • The legal steps must be followed for a beneficiary to claim an inheritance.
  • Transferring an inheritance to a beneficiary requires getting a court order.
  • The executor can distribute the inheritance to the other beneficiaries (maybe).
  • Taxes must still be paid on an unclaimed inheritance.
  • The state in which the inheritance is located will determine how it is handled.

What Happens If A Beneficiary Does Not Claim Their Inheritance?

Let’s say a beneficiary does not claim their inheritance. 

The executor must hand out the inheritance according to the will.  

Let’s the beneficiary:

  • can’t get located 
  • doesn’t claim the inheritance

The executor must follow the unclaimed property laws in their state. 

When the beneficiary doesn’t claim the inheritance, the funds may get:

  • transferred to the state’s unclaimed funds department 
  • donated to charity 

The unclaimed inheritance will remain available to the beneficiary for several years. 

After a few years, the executor of the estate can distribute the inheritance per the will. 

This may involve:

  • distributing the inheritance to other beneficiaries
  • transferring the inheritance to a trust or estate
  • donating the inheritance to charity

The executor should consult with an attorney. 

This will help ensure that they:

  • understand the specific laws and regulations in their state
  • distribute the unclaimed inheritance in a legal manner

Let’s say they don’t distribute the inheritance in a legal way. 

They could be subject to:

  • criminal charges
  • civil litigation from the beneficiary

Fill out the form on this page to talk to an estate planning attorney. 

And have them make sure you’re distributing the estate properly. 

Read More: Can An Executor Override A Beneficiary

Check Your Will If A Beneifciary’s Inheritance Is Unclaimed

An executor can distribute the unclaimed inheritance to the other beneficiaries. 

But only if there are certain clauses in the will. 

Some examples of these clauses are:

  • Residuary clause. This clause says what should happen to any property not bequeathed to a named beneficiary. It can provide instructions for the distribution of unclaimed inheritances to other beneficiaries.
  • Default provision. This provision says what should happen in the event that a beneficiary does not claim their inheritance. It could specify that unclaimed inheritances should get distributed to other beneficiaries.
  • Contingent bequest. This provision outlines that a gift will only take effect if certain conditions get met. Let’s say a beneficiary fails to meet these conditions. The inheritance could get distributed to other beneficiaries.
  • Per stirpes distribution. This outlines that the inheritance will get distributed among other beneficiaries if a beneficiary does not claim their inheritance.
  • Lapse provisions. This provision states that a gift will get canceled if the beneficiary dies before the testator. Or if the beneficiary is not alive to receive the gift. In such cases, the unclaimed inheritance could get distributed to other beneficiaries.
  • Anti-lapse statute. This statute provides that if a beneficiary dies before the testator, their share of the inheritance will pass to their descendants instead of lapsing. This could result in the unclaimed inheritance getting distributed to other descendants instead of other beneficiaries.
  • Estate or trust distribution. This provision outlines that the unclaimed inheritance should get distributed to the estate or trust of the deceased. This may then get distributed to other beneficiaries according to the terms of the trust or estate.

Fill out the form on this page to have your will reviewed by our estate planning lawyers. 

We can tell you what your legal rights are.

Read More: Can An Executor Decide Who Gets What?

What An Executor Needs To Know About An Unclaimed Beneficiary Inheritance

Let’s say a beneficiary doesn’t claim their inheritance. 

The executor of the estate must be aware of several laws and regulations. 

These laws can vary depending on the jurisdiction. 

But some common ones include:

  • Probate laws. Probate is where a will gets validated and the deceased’s assets get distributed. The executor must follow the probate laws in their jurisdiction. This ensures that the distribution of unclaimed inheritance gets carried out.
  • Unclaimed property. They outline what should happen to unclaimed assets, including inheritances. The executor must be aware of these laws. And follow the required processes for transferring unclaimed inheritances. They will either go to the state or to other beneficiaries.
  • Tax laws. The executor must be aware of the tax implications of distributing unclaimed inheritances. For example, an inheritance may be subject to estate taxes or income taxes. And the executor must ensure that these taxes get paid. (Before distributing the inheritance to other beneficiaries.)
  • Trust and estate laws. The executor must be aware of the specific laws and regulations that apply to trusts and estates. This includes following the terms of the trust or estate. And ensuring that the distribution of unclaimed inheritance gets carried out correctly.

The Steps An Executor Should Take When A Beneficiary Does Not Claim Their Inheritance

What should the executor do if the beneficiary does not claim their inheritance? 

Here are the steps the executor should take:

  1. Verify the identity of the beneficiary. The executor should confirm the identity of the beneficiary. And ensure that they have not claimed the inheritance.
  2. Search for the beneficiary. If the beneficiary can’t get located, the executor should conduct a search to try to locate them. This may involve checking government records, searching online databases, and contacting relatives or friends of the beneficiary.
  3. Follow unclaimed property laws. Let’s say the beneficiary can’t get located or if they don’t claim the inheritance. The executor should follow the unclaimed property laws in their jurisdiction. This may involve transferring the unclaimed inheritance to the state’s unclaimed funds department or to another designated recipient.
  4. Notify other beneficiaries. The executor should notify other beneficiaries that the inheritance will get distributed according to the terms of the will.
  5. Follow the terms of the will. The executor should ensure that the distribution of the unclaimed inheritance gets carried out in accordance with the terms of the will. This may involve distributing the inheritance to other beneficiaries, transferring the inheritance to a trust or estate, or donating the inheritance to charity.
  6. Pay any taxes. The executor should ensure that any taxes due on the inheritance gets paid before distributing the inheritance to other beneficiaries.
  7. Keep records. The executor should keep accurate records of all actions taken in relation to the distribution of the unclaimed inheritance.

This is what an executor should do if a beneficiary doesn’t claim their inheritance. 

It’s important for the executor to consult with an attorney. 

This ensures that they understand the specific laws and regulations in their state. 

And ensures that the distribution of unclaimed inheritance gets carried out legally.

Do You Have A Beneficiary That Has Not Claimed Their Inheritance?

If you have a beneficiary that has not claimed their inheritance, fill out the form below. 

Our estate planning and probate attorneys have experience navigating:

  • complex estates
  • unclaimed property laws
  • estate taxes for unclaimed property
  • distribution disputes
  • record-keeping for the court system
  • estate accounting

Talk soon

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