Can I ask beneficiary to refuse part of his inheritance?

growler834

I am the executor of my MIL's will. She has left her estate to be divided 25% each to her son (my husband), me, her granddaughter & grandson. She has also left her jewellery to her granddaughter & some shares (worth approx £1800) to her grandson.

Five years ago, before MIL was diagnosed with dementia, she loaned £2000 to her grandson as he was in financial difficulties. Although there was nothing in writing it was always made plain to him that it was to be repaid when his finances improved. Due to MIL's ill health & grandson not being flush with money we have never pushed the repayment on her behalf. However, now he is due to inherit a substantial amount, would I, as executor, be able to ask him to refuse the shares part of his inheritance as repayment of the loan? He would still receive some of it because it will be added to the rest of MIL's estate & divided 4 ways. He won't want the shares transferring into his name as he lives abroad so they will be sold anyway & the proceeds would be given to him as per the will.

If I am able to do this I'm hoping he will agree to it - especially as, by not doing it, he is stopping the other beneficiaries from receiving their full entitlement from the estate.

Your advice would be very much appreciated.

rpc

growler834 wrote: »

However, now he is due to inherit a substantial amount, would I, as executor, be able to ask him to refuse the shares part of his inheritance as repayment of the loan?

You can ask.

He can refuse.

If I am able to do this I'm hoping he will agree to it - especially as, by not doing it, he is stopping the other beneficiaries from receiving their full entitlement from the estate.

Their full entitlement is exactly what the will says it is, not what any beneficiary or executor thinks that it should be. The gift/loan (unless documented as a debt or accounted for in the will) has no effect on anyone's entitlement.

pmlindyloo

Certainly your position as the executor of the will entitles you to seek money owed to the deceased.

http://www.adviceguide.org.uk/england/relationships_e/relationships_death_and_wills_e/dealing_with_the_financial_affairs_of_someone_who_has_died.htm

However, there is no written agreement/contract between the deceased and the grandson so how would you prove that it was owed?

As already said - ask - perhaps 'pressure' from family might encourage him to do the right thing.

POPPYOSCAR

Why not just suggest to him that he pays back the loan from his inheritance?

As there was nothing in writing he cannot be forced to repay and you would be wrong to withhold anything from him.

LEJC

unfortunately as the executor of the will you are just appointed at the person who distributes and closes down the estate...you are not there to distribute it in the way that you see fair ,but in the way detailed in the will.


I really do sympathise with you as a similar thing happened to us...as executors of a will we knew that the deceased would have wanted money owed to be repaid first we were powerless to do so because the will was constructed before the loan and other criteria regarding shares of amounts also camr into play following the early death of a more prominant receipient.


You can of course contact the person and remind them of the outstanding debt...we did but it caused quite a lot of friction and we were accused of "manipulation"...


Heavy heartedly we executed the will as per its contents...and have never exchanged a word with that beneficiary since...and neither has any outstanding debt been repaid.

DigForVictory

+1 for ask. It was the estate's money after all.

However, without any paperwork & a willingness to start a family feud, I wouldn't count on it.

Best of luck with the thankless task.

growler834

pmlindyloo wrote: »

Certainly your position as the executor of the will entitles you to seek money owed to the deceased.

http://www.adviceguide.org.uk/england/relationships_e/relationships_death_and_wills_e/dealing_with_the_financial_affairs_of_someone_who_has_died.htm

However, there is no written agreement/contract between the deceased and the grandson so how would you prove that it was owed?

As already said - ask - perhaps 'pressure' from family might encourage him to do the right thing.

We know that the money was placed in his bank account as my husband (his father) was the person that did this on behalf of my MIL, unfortunately though we no longer have the bank slip to prove it.

As he lives abroad we only have contact via phone and email. His father intends asking him to refuse the shares - if he doesn't agree then he will ask him to repay it out of his inheritance. The problem is that, being abroad, he knows it will be harder to get him to stick to his side of the bargain. His sister has never asked for loans from the family so we don't see why she should lose out on some of her inheritance if her brother decides to 'forget' his gran's goodwill. We don't want to cause a family upset but my husband believes his son should repay his debts.

GwylimT

If he decides to repay his loan he can do it however he likes, he would also only need to repay 75% of it as of course this £2000 would be split four ways between all beneficiaries of the will. He isn't preventing anyone from gaining their entitlement as clearly money in the bank/shares are being split, not previously defined amounts.

getmore4less

Do not try to complicate with the shares

try to recover it as a debt(to be counted in the cash distribution)

if it is well known in the family it will be his morals that determine how he deals with this.

RAS

Do not mix up a debt owed to the estate with an asset left to a beneficiary.

I presume you can access the last 6 years bank statements? The executor simply writes and indicates that they need to call in all debts to the estate. Give the date the payment was made and ask for it to be re-paid by a specific date.

Fudge it a bit with "due to her ill-health not pursued previously but debt now needs to be settled to allow the estate to be distributed".

Mojisola

growler834 wrote: »

I am the executor of my MIL's will. She has left her estate to be divided 25% each to her son (my husband), me, her granddaughter & grandson. She has also left her jewellery to her granddaughter & some shares (worth approx £1800) to her grandson.

However, now he is due to inherit a substantial amount, would I, as executor, be able to ask him to refuse the shares part of his inheritance as repayment of the loan?

RAS wrote: »

Do not mix up a debt owed to the estate with an asset left to a beneficiary.

I presume you can access the last 6 years bank statements? The executor simply writes and indicates that they need to call in all debts to the estate. Give the date the payment was made and ask for it to be re-paid by a specific date.

Fudge it a bit with "due to her ill-health not pursued previously but debt now needs to be settled to allow the estate to be distributed".

I would follow RAS's advice but, if he refuses, I wouldn't pursue it too actively.

If 25% of the estate is a "substantial amount" then the other three beneficiaries are only going to lose out on £500 each.

If I felt very strongly about the two grandchildren getting the same from MIL, I would give my daughter £2000 as a gift from my share of the estate.