Time limit on executors realising assets?

maple41

Basically, relative died 6 years ago leaving will naming the 2 surviving daughters as executors. Assets were a house which was left jointly to the daughters and a small amount of cash in bank accounts to be divided amongst grandchildren when 18.
Grant of probate issued without involving solicitors etc and cash assets divided and put into individual bank accounts for each grandchild.
Problem is, house is occupied by one daughter who wants to remain in the property (who cannot afford to increase the mortgage to pay out the other). Property deeds still in the name of the "executors of the estate of..." as is the small mortgage. Executors have applied for and gained planning permission for a building plot on the back garden, hoping to sell plot for enough to achieve a profit of half the value of the house to then pay out other executor / daughter. But due to property slump plot can't sell the plot.

Major question, - Is there a time limit by which the estate assets must be distributed? Well under CGT limit in total so HMRC not involved. How long will Building Society (A&L) go along with deeds / mortgage in name of exectutors? Don't want to ask them as this may alert them that this should have been sorted years ago!!!
Secondary question - Will daughter currently in residence now become legally entitled to remain in property for ever?

Thanks for any advice.

TonyMMM

I think it will be for the non-resident daughter, as a beneficiary who hasn't received her inheritance, to start proceedings against the executor. She could also potentially be due rent on her half of the property from the resident daughter.

Don't forget she already owns half the value of garden plot, so the planning permission scheme, whilst increasing the value of the property, also increases the amount due to her.

She should get some good independant legal advice.

John_Pierpoint

There is probably some nasty CGT in there somewhere. It might be argued that a trust owns the house with the two daughters as trustees.
Trusts get a 5050 CGT nil rate band.
It is now beginning to look like someone will be paying legal costs too.
If both sisters are joint executors it could get very messy - I ask this question because when my sister and I were joint executors, the court of probate tried to get one of us to drop out.

I think the sister who has had no benefit should be able to claim interest.
Was there any valuation of the house as at the date of death.

maple41

Thanks for the replies.
With the daughters being both sisters and the only executors, they don't want to fall out, but time has gone on with one daughter effectively enjoying the benefit of her inheritance (living in the house) and the other not. Initially both went to the same solicitor for advice, who agreed to act for both thinking it would be a simple property sale / transfer matter. Now it is difficult for that solicitor to act for one against the other, and they don't really want to fall out.
Therefore I needed to know if anyone is aware of any statutory requirement to wind up an estate within x years?
And would the daughter occupying the house gain legal title by way of staying in the property?
Do building societies continue with a mortgage in these circumstances?

Many thanks in advance for any further advice.

John_Pierpoint

I don't think the sister in the house can acquire "adverse possession" (squatter's rights) becasue:
1. She is a trustee and a trustee has to act for a beneficiary even if to their disadvantage.
2. A squatter has to serve notice of their occupation on the legal owners (the two trustees) after 10 years for registered property; thus giving them two years to legally sort out the situation.

However, that said I think the sister in possession should be paying legalised registered tenancy rent to the other, even if it is relatively "pepercorn".

Where in the country is this building site? How hard have you both tried to sell it? Why won't it sell?
If you think about it in many places the land is worth more than the house built on it, so plot prices change much more than local house prices - are you being realistic?
http://www.plotfinder.net/

maple41

Plot is in Leicestershire, in a small village. Priced by a couple of local agents, given to 1 to sell. Local nuilder put in a relistic offer but then withdrew prior to exchange, citing recession and difficulty financing the build, probably realistically true.
Also realistically suspect the sister in residence doesn't want to part with part of the garden so tries to put off any prospective purchasers.
As mentioned before sister in residence has effectively got more than her half at the moment. So looking for a nice way to legally enforce her pay up for the other half of the value of the house. The building plot seemed the answer pre recession.

John_Pierpoint

Yes it feels like buying a house, when the couple in residence are getting divorced - as a buyer you get that "I don't want to get involved in this hassle" feeling.
I remember once making a 120 mile round trip for a second look at a house I'd decided I almost certainly wanted to buy; only to find that those supposedly wanting to sell had changed their minds and gone AWOL, rather than tell me to my face.
(Did me a favour because a few weeks later a similar house with a better standard of decoration and garden came up in the same area).