Abatement of pecuniary legacies

userrobert

I have a question I’m hoping someone can answer.

I’m winding up an estate which although solvent, the final accounts clearly show there is insufficient cash assets to pay both its debts and the two pecuniary legacies. Those specifically being one of £1000 and another of £2000. There is also no priority or special instructions between the legacies in the Will


My question is how do I divide the remaining cash assets of £1200? Should I equally divide the money beween them, or divide it on a 2-1 (£2000,£1000) basis due to the amount they were left in the will?



Advice on this would be appreciated,


Robert

ValHaller

userrobert wrote: »

.... equally divide the money beween them, or divide it on a 2-1 (£2000,£1000) basis due to the amount they were left in the will ......

The latter, if there really is no way of determining any other settlement - unless your beneficiaries agree on a different way.

getmore4less

The above includes 2 options.

the benifitiaries don't get a choice, they can howenver make gifts

troubleinparadise

In the will I'm executing, there's a line about the executors being able to make decisions - do you have that? That way the beneficiaries thoughts on the matter don't influence the outcome or lead to a dispute.

I would have thought that a split on the 2:1 ratio would be a good and fair way to divide the final amount, as it is impossible to meet the pecuniary legacies as they were written.

ValHaller

getmore4less wrote: »

The above includes 2 options.

the benifitiaries don't get a choice, they can howenver make gifts

Mis cut the quote. Meant latter. If the beneficiaries are agreed on another way of dividing, then a Deed of Variation can be used.

getmore4less

There are strict rules, you can't just make things up.

there will be other links but here is one to get you started.

http://www.hmrc.gov.uk/manuals/ihtmanual/ihtm12086.htm

getmore4less

troubleinparadise wrote: »

In the will I'm executing, there's a line about the executors being able to make decisions - do you have that? That way the beneficiaries thoughts on the matter don't influence the outcome or lead to a dispute.

I would have thought that a split on the 2:1 ratio would be a good and fair way to divide the final amount, as it is impossible to meet the pecuniary legacies as they were written.

Interested to know the exact wording and how it give discretion on the distribution of the estate.

Common to have discretion on investing the estate prior to distribution but not the distribution.

jackyann

Ask the probate office for advice

troubleinparadise

getmore4less wrote: »

Interested to know the exact wording and how it give discretion on the distribution of the estate.

Common to have discretion on investing the estate prior to distribution but not the distribution.

"I give and bequeath" (household effects) "equally between" (xxx and xxx) "... In the event of any dispute or disagreement the decision of my executors will be final and binding"

.... So not power to alter the distribution as such, but a bit of decision making power over one aspect.... A clause that still leaves lots of scope for falling out - a clear direction and decision by the testator would have been much more preferable....!

The element of "fairness" being a difficult one to define given monetary vs sentimental value! :eek:

madbadrob

If there are no other instructions you should split the residue in the same fashion as the will stated therefore 2:1

Rob

userrobert

getmore4less wrote: »

There are strict rules, you can't just make things up.

there will be other links but here is one to get you started.

http://www.hmrc.gov.uk/manuals/ihtmanual/ihtm12086.htm

Yes, this is one of the documents I had enocountered during my search. This and of course the Administration of Estates Act 1925 ( http://www.legislation.gov.uk/ukpga/Geo5/15-16/23 )

Thanks
Robert