Insufficient funds in estate

Multitaskmandy

Hi all,

New here and looking for a bit of advice.

I am the executor of an estate for an elderly lady who has just died.

There are 3 beneficiaries in the will.
Benef 1 = Gets the house
Benef 2 = £10K
Benef 3 = £1K

The deceased has approx. £10k in savings and bank accounts.

After the funeral costs and some small debts have been paid this will leave approx. £4k.

My question is, how will the estate be distributed. Benef 1 & 3 are family members where as Benef 2 is a friend.

Will the house have to be sold to pay Benef 2 & 3 or will they just get a pro rata percentage of what cash is left after funeral costs & debts have been paid.

Thanks in advance

getmore4less

Depends how the will is worded.

Multitaskmandy

Standard sort of will,

after my debts and funeral costs have been paid I leave the remainder of my estate ............. as described in OP

ValHaller

Multitaskmandy wrote: »

Standard sort of will,

after my debts and funeral costs have been paid I leave the remainder of my estate ............. as described in OP

You are not really answering the question. You have clarified that the will puts debts and funeral at the head of the list. But what is really at issue is the preference ordering given in the will for beneficiaries 1, 2 & 3. If you get any cut and dried answers before you have answered that question, discard them. There is no generalised rule for resolving this, it depends entirely on the text in the will.

dzug1

The house will have to be sold.

Alternatively the recipient of it can pay sufficient into the estate that all 3 receive the correct reduced percentage of their bequests. So they all get 95% (or whatever - I haven't worked it out) of what they should have done

That assumes the £10K and £1K were specific sums of cash - not the result of calculations - and the will did not specify a preference order.

ValHaller

dzug1 wrote: »

The house will have to be sold.

Alternatively the recipient of it can pay sufficient into the estate that all 3 receive the correct reduced percentage of their bequests. So they all get 95% (or whatever - I haven't worked it out) of what they should have done

That assumes the £10K and £1K were specific sums of cash - not the result of calculations - and the will did not specify a preference order.

Not necessarily. A useful link posted by getmore4less http://www.hmrc.gov.uk/manuals/ihtmanual/ihtm12086.htm

It is necessary to determine for each of the gifts whether they are specific, general or residuary. You cannot generalise and without further information form the OP on the content of the will, although you could make a fair guess, it could be wrong.

Multitaskmandy

Ok, thanks for replies so far. I don't have the will to hand at the moment but when I have a copy I will post specific wording.

I know the house and monetary values are exactly what has been left to each beneficiary if that helps. Can't remember what order they appear in the will if that has a relevance.

dzug1

It's the wording that surrounds them and joins them together that's significant - more so than just the order in which they appear

mo51

My mother made a will a few years ago, and has apparently left any funds in her accounts after her death (she pre-paid for funeral costs a few years ago) to be shared equally by all three of us (her children). My elder sister manages her finances (and her husband is the executor of the will) , so how do we know what has been drawn out prior to mum dying, and what should be left?

RAS

mo51 wrote: »

My mother made a will a few years ago, and has apparently left any funds in her accounts after her death (she pre-paid for funeral costs a few years ago) to be shared equally by all three of us (her children). My elder sister manages her finances (and her husband is the executor of the will) , so how do we know what has been drawn out prior to mum dying, and what should be left?

Duplicate post on the same forum.

You need to start your own thread - send a PM to admin and they can transfer your post to a new thread.