Conflict of interest query

maximumgardener · 19 May 2017 at 10:31AM

My brother died in December 2016 after around two years of ill health.
he did leave a will fortunately.
His entire estate is to be divided into 9 portions according to his will.
he was unmarried , had a partner of 10 years duration (who was still married but separated)
no joint bank accounts. everything was in his name.
He made a living as a fish farmer and his estate is estimated to be around 1 million pounds
his partner was supportive during his illness but she did not have much time for his siblings.
siblings surviving our brother are his 6 sisters. I am sister number 4.
The will leaves the following proportions in his estate
2/9 to his partner and the right to reside in his home for 18 months from date of death
2/9 to sister 1 (lives and works in USA)
1/9 each to sisters 2 to 6.
partner and sister 1 are executors and beneficiaries
there are two further executors , a cousin and a niece (not beneficiaries).

The conflict of interest query surrounds a payment authorised by sister 1 to my deceased brothers partner. this amounts to 300 pounds per week which seems excessive for executor duties especially as only paid to one of the 4 executors.The monies are coming from the general estate funds (rather than her own bequeathed share) which does in effect change the ratio of settlements stated in my late brothers will.

don't want to be too picky , but welcome any thoughts ?
thanks
MG

securityguy · 19 May 2017 at 10:37AM

Non-professionals cannot be paid as executors. What do you mean by "executor duties"?

getmore4less · 19 May 2017 at 10:40AM

this amounts to 300 pounds per week which seems excessive for executor duties

lay executors cannot be paid

maximumgardener · 19 May 2017 at 10:46AM

Thanks.
we actually queried this with solicitors and were told that a "new position" had been created and agreed by executors. Ie it was not actually strictly for executry.
the new position was for general admin duties in winding up the business and allegedly providing added security. my view is this new position was never there before and is completely unnecessary.
4 executors and existing family are more than enough to provide any services required.

maximumgardener · 19 May 2017 at 10:58AM

a key reason for the 300 pound per week "job" award is probably the fact that my late brothers partner has no money of her own. she could always get a job I guess though thats unlikely.

conflict of interest? probably a hasty decision taken just after death and not fully thought through

pollypenny · 19 May 2017 at 11:16AM

If winding up the business is a big task, as seems likely, it's fair that someone is paid to do it. Maybe a time limit would be a good idea.

Yorkshireman99 · 19 May 2017 at 12:32PM

maximumgardener wrote: »

My brother died in December 2016 after around two years of ill health.
he did leave a will fortunately.
His entire estate is to be divided into 9 portions according to his will.
he was unmarried , had a partner of 10 years duration (who was still married but separated)
no joint bank accounts. everything was in his name.
He made a living as a fish farmer and his estate is estimated to be around 1 million pounds
his partner was supportive during his illness but she did not have much time for his siblings.
siblings surviving our brother are his 6 sisters. I am sister number 4.
The will leaves the following proportions in his estate
2/9 to his partner and the right to reside in his home for 18 months from date of death
2/9 to sister 1 (lives and works in USA)
1/9 each to sisters 2 to 6.
partner and sister 1 are executors and beneficiaries
there are two further executors , a cousin and a niece (not beneficiaries).

The conflict of interest query surrounds a payment authorised by sister 1 to my deceased brothers partner. this amounts to 300 pounds per week which seems excessive for executor duties especially as only paid to one of the 4 executors.The monies are coming from the general estate funds (rather than her own bequeathed share) which does in effect change the ratio of settlements stated in my late brothers will.

don't want to be too picky , but welcome any thoughts ?
thanks
MG

It sounds like a complete abuse of power. A business that size need a professional accountant to wind it up and deal with all the tax issues etc. In any case I would have thought selling it as a going concern would produce much better results than a bunch of amateurs playing with it.

maximumgardener · 19 May 2017 at 12:48PM

Indeed. there are professional accountants doing the books on an ongoing basis.
the business has been established for 30 years and is instructed to be sold (once probate granted) along with house , land, two cars and various items of equipment for the fish farm. existing stock will be sold on /realised prior to sale
there are two members of staff retained and paid (as before) they are more than capable and also have redundancy settlements specified in my late brothers will

maximumgardener · 19 May 2017 at 1:05PM

pollypenny wrote: »

If winding up the business is a big task, as seems likely, it's fair that someone is paid to do it. Maybe a time limit would be a good idea.

Thank you.
yes that makes sense.
Perhaps suggest continue payment till probate granted .?
Just trying to get the executors to realise they have perhaps" jumped the gun" here
Can see absolutely no need for the payment . Its duplication

Yorkshireman99 · 19 May 2017 at 2:06PM

I can see no valid reason at all, based on what you have said, for the payments to be made. The question of deducting them from the recipient.'s share of the estate needs to be seriously considered. Is the person paying tax and NI on it? Perhaps that might be a lever.

Malthusian · 19 May 2017 at 2:17PM

maximumgardener wrote: »

there are two members of staff retained and paid (as before) they are more than capable

It's not entirely clear whether there is still a going concern with the owner dead, or just some cars, land and fishing equipment which without the owner are worth no more than the sum of their parts. If the former, the executors have to make sure it is run competently as a going concern - at least until it is sold - to preserve its value for the sake of all the beneficiaries.

The OP says there are professional accountants but doing the books and the annual audit is not the same as running a business. If they were hired to act as administrators (if that is the right word when the business is rudderless but not insolvent) then I would expect them to charge considerably more than £300 a week.

If one of the two employees was the Finance Director or other second-in-command then I would expect them to be able to take over the running and winding up of the business, and it's dubious as to what the £300 per week paid to the partner is meant to achieve.

If on the other hand both employees are secretaries, then winding up a business is not something you would typically do for a secretary's salary.

Conflict of interest query

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