Abatement of pecuniary legacies

userrobert

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.

There is a clause in the Will stating I can use my discretion but I’m wanting to do it by the book rather than force it.


Thanks,


Robert

userrobert

Thanks for everyone who contributed to my topic. All this has helped me greatly

troubleinparadise

So what method of distribution have you arrived at?

I had a quick scan of the abatement document - so glad I haven't had to deal with that myself!

nom_de_plume

Bumping an old thread rather than starting a new one as my question is relevant to the topic.

I'm in the early stages of executing a relative's estate. The estate basically comprises of 2 properties and a sum of cash. The will instructs what is to happen to the 2 properties and specific sums of cash.

The outline wording of the will is thus and in this order:

I give the sum of ... to each of them X,Y and Z free of all tax payable by reason of my death.
I give the following further pecuniary legacies free of all tax payable by reason of my death.
To A the sum of...
To B the sum of...

I give the following specific devises free of all tax payable by reason of my death.
To ..... all my estate and interest in the property.....
To ......all my estate and interest in the property.....

There is also a residual clause but this will not come into play.

Some quick sums suggest the value of the estate in total and after IHT equates to around 80% of the sum total of the above legacies. Does the wording of the will suggest that each beneficiary should receive 80% or does the fact that the properties are described as specific devises have any bearing?

getmore4less

nom_de_plume wrote: »

Bumping an old thread rather than starting a new one as my question is relevant to the topic.

I'm in the early stages of executing a relative's estate. The estate basically comprises of 2 properties and a sum of cash. The will instructs what is to happen to the 2 properties and specific sums of cash.

The outline wording of the will is thus and in this order:

I give the sum of ... to each of them X,Y and Z free of all tax payable by reason of my death.
I give the following further pecuniary legacies free of all tax payable by reason of my death.
To A the sum of...
To B the sum of...

I give the following specific devises free of all tax payable by reason of my death.
To ..... all my estate and interest in the property.....
To ......all my estate and interest in the property.....

There is also a residual clause but this will not come into play.

Some quick sums suggest the value of the estate in total and after IHT equates to around 80% of the sum total of the above legacies. Does the wording of the will suggest that each beneficiary should receive 80% or does the fact that the properties are described as specific devises have any bearing?

IT would apear that the properties come under the specific legacies and the rest are general

I think you will need pro advice on what class each is and if the order makes a difference or if the following is of relevance

note here that the tax free part may be a differentt class to the actual gift.
http://www.hmrc.gov.uk/manuals/ihtmanual/IHTM12082.htm

nom_de_plume

Thanks. I am similarly of the opinion that I need a pro. to look through this and convert it to plain english for me. I 'think' I know the answer but naturally want and need to get it right. Sadly I think the answer may differ from the deceased intentions for the estate. The difference to the cash legacies reduces them to nearer 30% rather than the above 80% if the specific legacies take 'priority'.

The learning curve continues.....

getmore4less

nom_de_plume wrote: »

Thanks. I am similarly of the opinion that I need a pro. to look through this and convert it to plain english for me. I 'think' I know the answer but naturally want and need to get it right. Sadly I think the answer may differ from the deceased intentions for the estate. The difference to the cash legacies reduces them to nearer 30% rather than the above 80% if the specific legacies take 'priority'.

The learning curve continues.....

There are always other ways if the benificiaries that would get affected are agreed.

The problem with intention is you need to leave enough to pay them, by making all the gifts tax free and nont leaving enough to pay the tax kind defeats the intentions.

Any gifts prior to death will complicating things further.