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  • FIRST POST
    • maximumgardener
    • By maximumgardener 19th May 17, 10:31 AM
    • 229Posts
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    maximumgardener
    Conflict of interest query
    • #1
    • 19th May 17, 10:31 AM
    Conflict of interest query 19th May 17 at 10:31 AM
    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
Page 1
    • securityguy
    • By securityguy 19th May 17, 10:37 AM
    • 2,322 Posts
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    securityguy
    • #2
    • 19th May 17, 10:37 AM
    • #2
    • 19th May 17, 10:37 AM
    Non-professionals cannot be paid as executors. What do you mean by "executor duties"?
    • getmore4less
    • By getmore4less 19th May 17, 10:40 AM
    • 28,357 Posts
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    getmore4less
    • #3
    • 19th May 17, 10:40 AM
    • #3
    • 19th May 17, 10:40 AM
    this amounts to 300 pounds per week which seems excessive for executor duties

    lay executors cannot be paid
    • maximumgardener
    • By maximumgardener 19th May 17, 10:46 AM
    • 229 Posts
    • 94 Thanks
    maximumgardener
    • #4
    • 19th May 17, 10:46 AM
    • #4
    • 19th May 17, 10:46 AM
    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
    • By maximumgardener 19th May 17, 10:58 AM
    • 229 Posts
    • 94 Thanks
    maximumgardener
    • #5
    • 19th May 17, 10:58 AM
    • #5
    • 19th May 17, 10:58 AM
    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
    • By pollypenny 19th May 17, 11:16 AM
    • 21,473 Posts
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    pollypenny
    • #6
    • 19th May 17, 11:16 AM
    • #6
    • 19th May 17, 11:16 AM
    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.
    Member #14 of SKI-ers club

    Words, words, they're all we have to go by!.

    (Pity they are mangled by this autocorrect!)
    • Yorkshireman99
    • By Yorkshireman99 19th May 17, 12:32 PM
    • 2,300 Posts
    • 1,840 Thanks
    Yorkshireman99
    • #7
    • 19th May 17, 12:32 PM
    • #7
    • 19th May 17, 12:32 PM
    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
    Originally posted by maximumgardener
    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
    • By maximumgardener 19th May 17, 12:48 PM
    • 229 Posts
    • 94 Thanks
    maximumgardener
    • #8
    • 19th May 17, 12:48 PM
    • #8
    • 19th May 17, 12:48 PM
    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
    • By maximumgardener 19th May 17, 1:05 PM
    • 229 Posts
    • 94 Thanks
    maximumgardener
    • #9
    • 19th May 17, 1:05 PM
    • #9
    • 19th May 17, 1:05 PM
    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.
    Originally posted by pollypenny
    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
    • By Yorkshireman99 19th May 17, 2:06 PM
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    Yorkshireman99
    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
    • By Malthusian 19th May 17, 2:17 PM
    • 1,961 Posts
    • 2,815 Thanks
    Malthusian
    there are two members of staff retained and paid (as before) they are more than capable
    Originally posted by maximumgardener
    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.
    • maximumgardener
    • By maximumgardener 19th May 17, 2:19 PM
    • 229 Posts
    • 94 Thanks
    maximumgardener
    Thank you.
    Yes .....recipient is paying NI and a small amount of income tax (11500 personal allowance)

    we believe this has all been arranged as matter of convenience for two of the 4 executors (one of whom lives in America). All rather unsatisfactory.
    She should probably stand down as she is limited in involvement that far away.

    all other executors and beneficiaries are in UK

    we don't really want to go legal rather try convince them the error of their ways
    • maximumgardener
    • By maximumgardener 19th May 17, 2:21 PM
    • 229 Posts
    • 94 Thanks
    maximumgardener
    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.
    Originally posted by Malthusian

    Thanks. yes its a going concern at present but its being wound up and then sold with vacant possession
    • Yorkshireman99
    • By Yorkshireman99 19th May 17, 2:23 PM
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    Yorkshireman99
    No need to go hard legal as yet but setting out your position politely, but firmly, in writing, to all the executors may work. Don't threaten but be quite firm. In particular state that lay executors are not allowed to be paid.
    • maximumgardener
    • By maximumgardener 19th May 17, 2:49 PM
    • 229 Posts
    • 94 Thanks
    maximumgardener
    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.
    Originally posted by Malthusian

    thanks.meant to add...
    re the two employees - one is general manager. oversees and pretty much runs everything.
    the second - is general labourer. does feeding cleaning and some transport duty.

    the ex partner rather assumes the mantle but other than ordering some consumables , tends to not contribute very much. Difficult situation really .
    Unfortunately, the General manager and my brothers ex partner do not see eye to eye.
    • Malthusian
    • By Malthusian 19th May 17, 4:37 PM
    • 1,961 Posts
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    Malthusian
    the ex partner rather assumes the mantle but other than ordering some consumables , tends to not contribute very much. Difficult situation really .
    Unfortunately, the General manager and my brothers ex partner do not see eye to eye.
    Originally posted by maximumgardener
    This IMO makes doing nothing not an option. From the sound of it the general manager should have been left to get on with it, possibly with the help of the accountants, to value and sell the business. Not only is the 300 per week paid to the partner superfluous, but it may damage the value of the estate's investment if the general manager decides to walk away or their disagreement otherwise harms the business.

    Agreed that a letter to both executors pointing out that for the partner's own sake, it would be better to avoid any appearance of charging fees she is not allowed to charge, and to preserve the value of the business by leaving it in experienced hands, would be in order. Since the money in the business will come to her eventually anyway, this is in her interests as well. (There is no need to mention that for every she takes out of the business as a fee she only takes 22p out of her inheritance, it's beside the point.) If she needs money to live on she doesn't need to risk breaking the law to get it.
    • maximumgardener
    • By maximumgardener 19th May 17, 6:30 PM
    • 229 Posts
    • 94 Thanks
    maximumgardener
    This IMO makes doing nothing not an option. From the sound of it the general manager should have been left to get on with it, possibly with the help of the accountants, to value and sell the business. Not only is the 300 per week paid to the partner superfluous, but it may damage the value of the estate's investment if the general manager decides to walk away or their disagreement otherwise harms the business.

    Agreed that a letter to both executors pointing out that for the partner's own sake, it would be better to avoid any appearance of charging fees she is not allowed to charge, and to preserve the value of the business by leaving it in experienced hands, would be in order. Since the money in the business will come to her eventually anyway, this is in her interests as well. (There is no need to mention that for every she takes out of the business as a fee she only takes 22p out of her inheritance, it's beside the point.) If she needs money to live on she doesn't need to risk breaking the law to get it.
    Originally posted by Malthusian
    Thanks.
    yes . agreed 100%.
    its very important to keep the General manager onside. he is very supportive of the family and loyal . he stands to gain 40000 and the other employee 10000 when everything completed (redundancy) . valuations all completed so business side well advanced
    land is about 550000
    house 250000
    fish farm tanks & all equipment 150000

    main unknown is departure plan of the ex partner but we believe solicitors now pushing for answers from her as probate seems imminent
    • badmemory
    • By badmemory 20th May 17, 12:56 AM
    • 416 Posts
    • 390 Thanks
    badmemory
    Surely if the business was a going concern then your late brother was taking out more than 300 and therefore the business accounts should be in a better state than they were before, so she is probably not reducing anyones actual inheritance. As his ex sister maybe you should just spend a moment wondering why your oldest sibling living abroad was made executor and not a UK based sibling, which is what most of us would do to make things simpler. Also a cousin & a niece. That would seem to be an unusual arrangement in view of all the siblings which would not be anyones first thought. Have you considered that this payment may have been discussed with the other executors by your late brother and that they are fulfilling his wishes for his (not ex) partner.
    Last edited by badmemory; 20-05-2017 at 1:01 AM.
    • Yorkshireman99
    • By Yorkshireman99 20th May 17, 3:59 AM
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    Yorkshireman99
    Whatever the deceased's intent in the absence of instructions to that in a will then they have no relevance. It is not the executor(s) function to deal with such a situation by not administrating the estate lawfully.
    • getmore4less
    • By getmore4less 20th May 17, 7:46 AM
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    getmore4less
    no idea of the demand for a fish farms but is the place not worth more as a business rather than asset stripped.

    The will would need some very specific clauses to stop the place being sold to the same entity along with the goodwill.


    Might not make the general manager and assistant happy as they would get TUPE to the new owner.


    point is you are quibbling over a few 100 a week when there could be 10,000s being thrown away.
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