Guidance on distributing estate proceeds

shoeladyTTH

My mum recently died and we (executors) are obtaining probate ourselves as she had some cash, one lot of shares and a small house..... However, some potential issues have arisen which I would appreciate any advice on...
1. Money was left in the will to a relative, who unfortunately died a short time after my mum. Is this money paid to the deceased relatives estate or redistributed back into the estate? We would like to pay to the NOK of my relative but realise that as executors you need to follow the legal terms of the will and not your personal inclination
2. One of the beneficiaries lent mum some money to assist in the house purchase and is to receive 25% of the proceeds of the house as repayment, the remaining 75% to be divided between them and a further 5 beneficiaries. They have indicated they do not want the house to be sold as this will not recoup the money loaned. Is there a rule as to who decides whether/when the property is to be sold - executors/beneficiaries? If it is the beneficiaries, is it that all must be in agreement.
3. We have supplied final readings to utility companies and have begun receiving bills back. do we need to pay these immediately or is it best to pay ourselves and claim the money back via the estate, or will the bank be able to pay from her accounts as there is sufficient funds to cover it?

madbadrob

Take these questions in turn.
1. Because the legatee died after your mum it goes to her estate as you rightly assume

2. If the will says that the house has to be sold then yes it has to be sold. As executor the beneficiaries get no say in what you do so long as it is legal

3. The utility companies can wait or yes you can pay it yourself then recover from the estate as a debt to yourself.

Rob

troubleinparadise

On Point 3 - if you have followed normal processes, having informed the bank then the account will be have been frozen, possibly now named as the Executor's account, until you can access it following the grant of Probate.

After that you can start making payments from the account using its funds.

Until that time, you can make payments yourselves if you wish (or indeed have to in some instances), for reclaiming from the estate after Probate.

Mojisola

shoeladyTTH wrote: »

My mum recently died and we (executors) are obtaining probate ourselves as she had some cash, one lot of shares and a small house..... However, some potential issues have arisen which I would appreciate any advice on...
1. Money was left in the will to a relative, who unfortunately died a short time after my mum. Is this money paid to the deceased relatives estate or redistributed back into the estate? We would like to pay to the NOK of my relative but realise that as executors you need to follow the legal terms of the will and not your personal inclination

As the person died after your mother, his/her inheritance still stands.

2. One of the beneficiaries lent mum some money to assist in the house purchase and is to receive 25% of the proceeds of the house as repayment, the remaining 75% to be divided between them and a further 5 beneficiaries. They have indicated they do not want the house to be sold as this will not recoup the money loaned.

Is there a rule as to who decides whether/when the property is to be sold - executors/beneficiaries? If it is the beneficiaries, is it that all must be in agreement.

Follow the will unless all the affected beneficiaries want to change what happens. If the disgruntled beneficiary wants to buy the house from the estate and keep it until house prices rise, that's one option.

I don't think a house can be registered with six owners and, even if it could, agreeing to things would be a nightmare!

I would say to get the will dealt with according to the instructions. Until the estate is settled, the executors are legally liable for the way they manage it.

madbadrob

Mojisola wrote: »

Follow the will unless all the affected beneficiaries want to change what happens. If the disgruntled beneficiary wants to buy the house from the estate and keep it until house prices rise, that's one option.

I don't think a house can be registered with six owners and, even if it could, agreeing to things would be a nightmare!

I would say to get the will dealt with according to the instructions. Until the estate is settled, the executors are legally liable for the way they manage it.

No the max number is 4 Mojisola

rob

getmore4less

3. Best not to start paying out anything till the assets are known. so hold back on the utilities till you know there is enough cash to pay all debts and keep the estate running.

The main issue will be the house and contents these need securing and insuring.

if someone want to or is living there then be careful as there is allready a potential dispute. it can be handy to have someone living in a place to pick up the bills keep insurance down but they need to ne on the coperative side if the place must be sold.


Is the deal documented properly is it a gift or a loan for buying the house. it may be that the documents allow for the calling in of the loan needs to be looked at carefully in case this is a debt on the estate.

if the 25% + share of the 75% does not cover the money handed over that may be just tough for that person.

ther is the option that one of the benificiaries buys out the others with agreement or on the open market(which costs more).

Saltwater_2

As an Executor you are personally liable if you get it wrong!

As the legatee died after your mum then money has to go to their estate.

You can only have the legal title in the names of 4 people but they are effectivly Trustees for all the people with a beneficial interest in the property.

If all the beneficiaries agree you don't need to sell the house, if you have enough other assets to pay all the liabilities and legacies.

madbadrob

Saltwater wrote: »

As an Executor you are personally liable if you get it wrong!



If all the beneficiaries agree you don't need to sell the house, if you have enough other assets to pay all the liabilities and legacies.

Again not correct. If the will states the house must be sold then that is what should happen. If they wanted to vary that they would have to spend the money to get a deed of variation which is not cheap and not guaranteed either to succeed

Rob

getmore4less

madbadrob wrote: »

Again not correct. If the will states the house must be sold then that is what should happen. If they wanted to vary that they would have to spend the money to get a deed of variation which is not cheap and not guaranteed either to succeed

Rob

If all the beneficiaries are happy to assent to themselves then that satisfies the will.

They have just sold it to themselves no need for a DOV.

jackyann

Having said that you must follow the letter of the will exactly, there is (usually) no reason that the beneficiaries can't agree to gift money to someone.
I have been an executor and we did just that in similar circumstances to both of those described.
So, if you all agree, you could:
make a gift to the dead beneficiary's next-of-kin
make another gift to repay the exact amount to the beneficiary who made the loan.

The problem arises if any of you are claiming benefits, or having care home fees paid because you don't have enough money, as this could be regarded as "deprivation of assets".

madbadrob

jackyann wrote: »

Having said that you must follow the letter of the will exactly, there is (usually) no reason that the beneficiaries can't agree to gift money to someone.
I have been an executor and we did just that in similar circumstances to both of those described.
So, if you all agree, you could:
make a gift to the dead beneficiary's next-of-kin
make another gift to repay the exact amount to the beneficiary who made the loan.

The problem arises if any of you are claiming benefits, or having care home fees paid because you don't have enough money, as this could be regarded as "deprivation of assets".

Jacky that is true however if no deed of variation is taken out any one of those beneficiaries could come back at you and say they were coerced into that decision and then you as executor are liable to pay them the money back. Therefore its better to follow the letter of the will or obtain a deed of variation which will cost money which comes from the estate

Rob