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Messy probate situation with children fighting with stepmother!

edited 30 November -1 at 1:00AM in Deaths, Funerals & Probate
100 replies 14.1K views
carledcarled Forumite
143 posts
edited 30 November -1 at 1:00AM in Deaths, Funerals & Probate
Trying to understand if a solicitor is offering best advice here, I'll try and summarise.

Widow (W) is married to Deceased (D) for 17 years. It's a second marriage. D has two children (D1 & D2), Widow has two children (W1 & W2). Relationships between all are good until after death of D.

D's will appoints W and friend (F) as "executors and trustees" as the basic thrust of the will is that it will all end up in a discretionary trust (DT).

W along with D1 & D2 are named as potential beneficiaries of DT.

At funeral of D, Friend F announces that he has moved out of the area and has no wish to be part of probate, etc and will renounce.

Unknown to W, D had (some months after original will) added a codicil which appointed D1 & D2 as "executors in addition to those executors named in the will".

W starts to act as sole executor, shutting down some accounts belonging to D and putting them into a new account opened for estate funds. She uses some of the funds to pay for funeral expenses and other testamentary bits & pieces.

As the will is complex, W is advised by financial adviser to visit a solicitor for advice, which she does. At this point she is made aware of D1 & D2 being added as executors.

W immediately ceases acting alone and speaks to D1 & D2 to advise them what she has done so far. Initially she is told (in an email) that she has done nothing wrong and there is no problem.

Things quickly sour. There are disputes over how to handle the estate and the discretionary trust. W is visited several times by D1 & D2 and put under pressure to agree to formation of new trust in which they would have more control. She refuses. Around this time, D1 draws a diagram of the estate assets, once again clearly stating (W still has diagram) that W can keep the money already in the estate fund and the remainder will go into the discretionary trust.

Relationships break down, solicitors get involved and over a period of months things sour completely. Friend F has by now legally renounced position as executor.

D1 & D2 now engage new solicitor and start demanding back payment of the money initially declared to be ok for W to keep and use. As W has now carried out expensive planned maintenance to property (arranged before his death by D) she is unable to pay the money back and disputes that she has to anyway as all three executors (her, D1 & D2) had agreed (with evidence) that she could keep the money.

W is advised by her solicitor that she should threaten D1 & D2 with IHA claim as existing will leaves her nothing (all goes to DT, from which she is not guaranteed to inherit). D1 & D2's solicitor refers to money W has already had (approx 1/3 of estate) and asks "what more does she want?" which is at odds with them demanding that she pays this amount back anyway.

D1 & D2 continue to delay grant of probate and instead launch legal action to remove W as an executor as they feel she has acted without their authority or consent in appropriating estate funds (this is the money D1 & D2 agreed she could keep).

At directions hearing, judge immediately removes W as executor, apparently taking at face value D1 & D2's claim that they did not consent to W keeping the money.

D1 & D2's solicitor attempts to use the order to ALSO remove W as a trustee, but W's solicitor sees this and argues that they applied only to remove as executor as executor so cannot do this.

D1 & D2's barrister argues but loses the argument and judge declares the order as removal of executor only.

Up until this stage, all involved have acted and referred to D1 & D2 also being trustees of the DT. It is at this point that W1 realises the will & codicil actually only appoint them as executors, not trustees.

Friend F is now told he is still involved as trustee but announces he wants nothing to do with it and will sign deed of resignation as his intention was not to be involved with the estate at all.

As things stand at this point, we are in a strange position whereby D1 & D2 as remaining executors will get probate and have to pay it into the DT, which is managed solely by W, who they just had removed as executor. as it's a discretionary trust, no beneficiary has a right to benefit, so in theory W could decide to keep all the money for herself and D1 & D2 would have no grounds for complaint.

W's solicitor is convinced that D1 & D2 will now apply to have W removed as a trustee as they failed to do so explicitly last time. He feels that they will almost certainly succeed because of what W did with the estate funds.

That's pretty much where we are to date. W is very stressed as she feels she's done nothing wrong. We're amazed that the judge ignored the fact that all executors had agreed to her having that money (and evidence exists of this), then lied about that in a court claim and got away with it, leading us to believe W's solicitor did not present this information to the court. He has yet to confirm or deny whether he did.

The next concern is his firm belief that she will be removed as a trustee as it was only a technicality that stopped this last time. Even though probate is yet to be granted, apparently the DT HAS already arisen as W has spent some of the funds on non-estate things (she paid for oil heating in house for one thing). His contention is that as the will trust has arisen, W has committed the same misdeed against the trust as she did against the estate, therefore it's obvious she will also be removed as trustee, leaving no trustees at all and the court will have to appoint one/some. Obviously D1 & D2 are angling to have themselves appointed as trustees so they control everything themselves.

W's main contention is that all executors of the estate consented to her having the money already in the estate account (evidence exists showing this to be the case) so how can she have been held to have committed a misdeed against either the estate or the trust? Some 80-90% of the amount has been spent on the property anyway (half of which D1 & D2 will inherit in future) and much of that was something their own father committed to prior to his death.

If anyone has managed to get this far and has any experience or comments on this, it'd be great to hear some other points of view - even if you agree with W's solicitor! I'm too close to the action to view it objectively. As D1 & D2 can be proven to have lied and have also stolen paperwork from W (police did nothing as it was a civil matter as far as they were concerned!) it seems at the moment that cheats do prosper.
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Replies

  • edited 28 May 2016 at 12:18PM
    Tuesday_TenorTuesday_Tenor Forumite
    998 posts
    edited 28 May 2016 at 12:18PM
    VERY messy.
    Very clearly explained.
    Very sad, as without all the mistakes, hopefully all would have agreed to the repairs on the house as necessary, and already planned by D.

    It will be hard for anyone to comment with any confidence as we don't have the details of the 'complex will' or the terms of the discretionary trust. Therefore no real sense of the bigger picture or what D intended.

    But stepping back from that, I'll reflect back my take on things contributing to the mess, in different words, in case it helps you see anything differently:

    - An incorrectly worded codicil (Can you see any sense in making D1 and D2 executors but not trustees of the DT? I can't , so would view this as an oversight.). Seems a BIT odd to appoint 2 more executors when you already have 2, but probably made sense to D as his daughters became adults? And/or had he become concerned about Fs likelihood to act at all, and/or W's competence to act alone if necessary? But in which case, also vital to not leave F and W as the only trustees ...
    I guess the codicil wasn't draw up with a solicitor ...

    - F who wanted out of it all but was technically a trustee of the DT for a while after he was no longer executor.

    - A widow who from the will is only provided for by a discretionary trust. But we don't know if she has her own income, own savings and other assets, has benefitted from any death in service/pension/life insurance payouts ....

    - W who has spent substantial money on the house from the estate/DT BEFORE PROBATE WAS GRANTED. I think she was very unwise to do this. As trustee of the DT and (at that moment) executor this may be legally allowed but was imprudent before returns to probate office and HMRC had been done. It does cast doubt on her understanding of the role of executor, and seems to have provided the grounds for getting her removed as executor.

    - Thus is nothing to do with being in ignorance of the other 2 executors, that was just unfortunate. But she shouldn't have acted before probate was granted.

    - W who has spent estate/trust money on things other than the repairs planned by D. Again, REALLY not wise to do this before probate was granted. I understand that at that point she THOUGHT she alone had control of the DT, and possibly those were the ONLY liquid funds she had access to to ensure her winter heating needs.

    - D1 and D2 seem to have really changed their tune, from accepting that W was acting in good faith, and use of the DT was reasonable, to meanly saying that the money has to be repaid. At the time, though, due to a technicality, they themselves actually had no control over the DT (and at the moment still don't).

    - D1 and D2 have, as it stands at the moment, been put in the unenviable position of being executors, responsible for gathering in the assets, reporting to HMRC etc, but with no control of anything else beyond normal expenses of administering the estate. I suppose that's no different to any executor though, regarding the executor role, per se.

    - Assuming D1 and D2 are young and inexperienced, they may reasonably have reacted one way when faced with the 'fait accompli' of the expenditure on the house, but with growing understanding of the executor's role, may have realised that W's actions possibly made her unfit to act as executor, and that they could not work with her. ETA: And realised, that had they known about and sanctioned the expenditure BEFORE PROBATE, then they too would have been deemed imprudent executors. Not so surprising that they are backtracking .... Possibly they're not so concerned about the money per se, just about getting the legal process right ....?

    - If W really is reliant on the DT for her heating needs, then the solicitor may be right about a claim as a dependent under the IHA and/or ensuring that the terms of the DT make such use easy for her. I don't know enough to comment further.

    I hope the court processes and lawyers letters will allow some space for mediation and discussion of all the mistakes, twists and turns, what D really intended, and the real financial needs of W.

    The only ones to profit from this will be the lawyers.
  • edited 28 May 2016 at 12:10PM
    Yorkshireman99Yorkshireman99 Forumite
    5.5K posts
    edited 28 May 2016 at 12:10PM
    carled wrote: »
    Trying to understand if a solicitor is offering best advice here, I'll try and summarise.

    Widow (W) is married to Deceased (D) for 17 years. It's a second marriage. D has two children (D1 & D2), Widow has two children (W1 & W2). Relationships between all are good until after death of D.

    D's will appoints W and friend (F) as "executors and trustees" as the basic thrust of the will is that it will all end up in a discretionary trust (DT).

    W along with D1 & D2 are named as potential beneficiaries of DT.

    At funeral of D, Friend F announces that he has moved out of the area and has no wish to be part of probate, etc and will renounce.

    Unknown to W, D had (some months after original will) added a codicil which appointed D1 & D2 as "executors in addition to those executors named in the will".

    W starts to act as sole executor, shutting down some accounts belonging to D and putting them into a new account opened for estate funds. She uses some of the funds to pay for funeral expenses and other testamentary bits & pieces.

    As the will is complex, W is advised by financial adviser to visit a solicitor for advice, which she does. At this point she is made aware of D1 & D2 being added as executors.

    W immediately ceases acting alone and speaks to D1 & D2 to advise them what she has done so far. Initially she is told (in an email) that she has done nothing wrong and there is no problem.

    Things quickly sour. There are disputes over how to handle the estate and the discretionary trust. W is visited several times by D1 & D2 and put under pressure to agree to formation of new trust in which they would have more control. She refuses. Around this time, D1 draws a diagram of the estate assets, once again clearly stating (W still has diagram) that W can keep the money already in the estate fund and the remainder will go into the discretionary trust.

    Relationships break down, solicitors get involved and over a period of months things sour completely. Friend F has by now legally renounced position as executor.

    D1 & D2 now engage new solicitor and start demanding back payment of the money initially declared to be ok for W to keep and use. As W has now carried out expensive planned maintenance to property (arranged before his death by D) she is unable to pay the money back and disputes that she has to anyway as all three executors (her, D1 & D2) had agreed (with evidence) that she could keep the money.

    W is advised by her solicitor that she should threaten D1 & D2 with IHA claim as existing will leaves her nothing (all goes to DT, from which she is not guaranteed to inherit). D1 & D2's solicitor refers to money W has already had (approx 1/3 of estate) and asks "what more does she want?" which is at odds with them demanding that she pays this amount back anyway.

    D1 & D2 continue to delay grant of probate and instead launch legal action to remove W as an executor as they feel she has acted without their authority or consent in appropriating estate funds (this is the money D1 & D2 agreed she could keep).

    At directions hearing, judge immediately removes W as executor, apparently taking at face value D1 & D2's claim that they did not consent to W keeping the money.

    D1 & D2's solicitor attempts to use the order to ALSO remove W as a trustee, but W's solicitor sees this and argues that they applied only to remove as executor as executor so cannot do this.

    D1 & D2's barrister argues but loses the argument and judge declares the order as removal of executor only.

    Up until this stage, all involved have acted and referred to D1 & D2 also being trustees of the DT. It is at this point that W1 realises the will & codicil actually only appoint them as executors, not trustees.

    Friend F is now told he is still involved as trustee but announces he wants nothing to do with it and will sign deed of resignation as his intention was not to be involved with the estate at all.

    As things stand at this point, we are in a strange position whereby D1 & D2 as remaining executors will get probate and have to pay it into the DT, which is managed solely by W, who they just had removed as executor. as it's a discretionary trust, no beneficiary has a right to benefit, so in theory W could decide to keep all the money for herself and D1 & D2 would have no grounds for complaint.

    W's solicitor is convinced that D1 & D2 will now apply to have W removed as a trustee as they failed to do so explicitly last time. He feels that they will almost certainly succeed because of what W did with the estate funds.

    That's pretty much where we are to date. W is very stressed as she feels she's done nothing wrong. We're amazed that the judge ignored the fact that all executors had agreed to her having that money (and evidence exists of this), then lied about that in a court claim and got away with it, leading us to believe W's solicitor did not present this information to the court. He has yet to confirm or deny whether he did.

    The next concern is his firm belief that she will be removed as a trustee as it was only a technicality that stopped this last time. Even though probate is yet to be granted, apparently the DT HAS already arisen as W has spent some of the funds on non-estate things (she paid for oil heating in house for one thing). His contention is that as the will trust has arisen, W has committed the same misdeed against the trust as she did against the estate, therefore it's obvious she will also be removed as trustee, leaving no trustees at all and the court will have to appoint one/some. Obviously D1 & D2 are angling to have themselves appointed as trustees so they control everything themselves.

    W's main contention is that all executors of the estate consented to her having the money already in the estate account (evidence exists showing this to be the case) so how can she have been held to have committed a misdeed against either the estate or the trust? Some 80-90% of the amount has been spent on the property anyway (half of which D1 & D2 will inherit in future) and much of that was something their own father committed to prior to his death.

    If anyone has managed to get this far and has any experience or comments on this, it'd be great to hear some other points of view - even if you agree with W's solicitor! I'm too close to the action to view it objectively. As D1 & D2 can be proven to have lied and have also stolen paperwork from W (police did nothing as it was a civil matter as far as they were concerned!) it seems at the moment that cheats do prosper.
    From what you have said W did act improperly in spending estate funds and is liable to repay them. I am not surprised that the judge removed W as executor as W had clearly acted wrongly. What the executors appointed by the codicil may have said does not excuse W's actions. Likewise it seems that W had no legal authority to spend money on heating oil from the estate funds. Because of W's actions W is clearly not a fit person to act as a trustee as well and I would expect an action to remove W as one to succeed. If W does make a claim as a dependent I would expect if such a claim succeeded then the funds W has misappropriated to be deducted from any award. W has nobody but themself to blame for the situation.
  • edited 28 May 2016 at 12:36PM
    Tuesday_TenorTuesday_Tenor Forumite
    998 posts
    edited 28 May 2016 at 12:36PM
    I would be very careful about calling D1 and D2 'cheats'.

    They have not cheated any fund, person or process.

    They did not start this mess nor did they compound it by imprudent action.

    Unless you believe they coerced father to write the codicil, which HAS muddied the waters by being probably incomplete, as well as coerced. And THAT would be a whole new ball game. Not a fun one.


    What is the actual ownership if he house now?
    I'm guessing W50%, D1+D2 50%, W has life interest?


    I hope the outcome is that the third of the estate that W has spent is deemed within the terns of the trust, and a reasonable expense as intended by D.

    All the best in sorting it out.
  • I would be very careful about calling D1 and D2 'cheats'.

    They have not cheated any fund, person or process.

    They did not start this mess nor did they compound it by imprudent action.

    Unless you believe they coerced father to write the codicil, which HAS muddied the waters by being probably incomplete, as well as coerced.


    What is the actual ownership if he house now?
    I'm guessing W50%, D1+D2 50%, W has life interest?


    I hope the outcome is that the third of the estate that W has spent is deemed within the terns of the trust, and a reasonable expense as intended by D.

    All the best in sorting it out.
    Surely the is no way that the money that W spent can be be considered reasonable since W had no authority whatsoever to do so? The fact that a judge removed W as executor supports this.
  • carledcarled Forumite
    143 posts
    Thanks for the input. Interesting technical point raised about the early spending of funds on things other than the estate - D1 & D2 had no input to give as they are not trustees (I take the point about the codicil possibly being incorrectly worded, but that's life and surely only the facts can be used as opposed to trying to argue "surely D intended THIS even though he actually wrote THAT..." As it stands, they simply aren't trustees and the only other trustee, F, has resigned.

    The codicil was drafted by the same solicitors who did the will and only two months after the will was done. D1 & D2 knew nothing about it either. Arguing it's "incomplete" is pointless as we can only go on what is written down, not what we think the intentions may have been, surely?

    They certainly contributed strongly to the mess. W offered at the outset to give D1 & D2 the remainder of the money from the estate after her third. So pretty much a 3-way split. D1 & D2 refused this and argued to set up a new trust of some sort. We have no idea why. It just got nasty after that.

    As to "cheats" - I just thought it a better term than "liars" as we have that evidence in black and white at least. As to whether they've cheated any person - I'd argue (I'm biased, of course) that in telling W she could have and keep the money (to clarify again, we have written evidence of this, this is not merely "he said, she said" hearsay) and then changing tune and demanding it back is certainly close, in spirit, to cheating a person.

    House ownership is pretty much exactly as you have described.

    D1 & D2 are late 40s/early 50s age-wise. Both well off with good jobs.

    W does have decent pension income that just about covers monthly outgoings, but there is no "rainy day" sum anywhere.

    Apart from the CH oil, W only spent the money on things other than estate expenditure several months after being told she could keep the money by the other two executors and before D1 & D2 started demanding it be paid back. She did not spend it at the outset - I didn't make that clear, sorry.

    At the time, the only liquid funds W had for the heating oil were the ones in the estate account. This was spent before she realised she was not the only executor.

    Terms of her life interest in the house say she has to keep it properly maintained and insured. In total out of the 1/3-ish of the estate she has, she has spent perhaps 10-20% on things other than funeral, testamentary or property maintenance - around £3,000 in all. She was willing to pay this back but was shot down by D1 & D2 saying that she shouldn't have spent the money on the property maintenance (that their father had already arranged for the early summer) and that needed to be paid back too. Clearly a bit ridiculous when considering everything.
  • cte1111cte1111 Forumite
    7.4K posts
    If all the estate was meant to go into a discretionary trust, then the only items that should have been paid out of the estate would have been debts of the deceased and funeral expenses.

    Once probate is granted, then the assets should go into a trust as stated in the will. However you mention other minor bequests and talk about the house being split in thirds, so maybe the will is more complicated than you first stated?

    Assets that are meant to go into trust can't just be spent, even if the executors agree on this. The executors have to carry out the will of the deceased, not make their own decisions on what they really meant.
  • Surely the is no way that the money that W spent can be be considered reasonable.

    Well, if D had instigated major work on the house and then died without leaving his widow any funds to pay the builder, and left her no funds to pay her winter heating, she was left in a difficult position. Any trustee of a discretionary trust who would refused such claims would, in my eyes, be most UNreasonable.

    She was wrong to jump the gun and use funds before probate. She should have stalled the builders saying 'waiting for probate' , [tough on them] , .... ?and gone without heating??!!!?? .... And got on with applying for probate ASAP.

    I do understand where W was coming from, though she was wrong not to get probate sorted first.
    - No intention of defrauding estate, had all figures at date of death, will complete probate forms correctly
    - believes she is now sole executor
    - believes she is now sole trustee
    - believes discretionary trust is intended for exactly such things
    - knows there is no inheritance tax to pay (I'm assuming)
    - thinks best to use the funds she believes she can grant to herself rather than unnecessarily troubling her children or getting into debt to pay builder and winter heating.

    Misguided, but understandable.
    And deemed wrongful action for an executor in a court of law.
  • carled wrote: »
    Thanks for the input. Interesting technical point raised about the early spending of funds on things other than the estate - D1 & D2 had no input to give as they are not trustees (I take the point about the codicil possibly being incorrectly worded, but that's life and surely only the facts can be used as opposed to trying to argue "surely D intended THIS even though he actually wrote THAT..." As it stands, they simply aren't trustees and the only other trustee, F, has resigned.

    The codicil was drafted by the same solicitors who did the will and only two months after the will was done. D1 & D2 knew nothing about it either. Arguing it's "incomplete" is pointless as we can only go on what is written down, not what we think the intentions may have been, surely?

    They certainly contributed strongly to the mess. W offered at the outset to give D1 & D2 the remainder of the money from the estate after her third. So pretty much a 3-way split. D1 & D2 refused this and argued to set up a new trust of some sort. We have no idea why. It just got nasty after that.

    As to "cheats" - I just thought it a better term than "liars" as we have that evidence in black and white at least. As to whether they've cheated any person - I'd argue (I'm biased, of course) that in telling W she could have and keep the money (to clarify again, we have written evidence of this, this is not merely "he said, she said" hearsay) and then changing tune and demanding it back is certainly close, in spirit, to cheating a person.

    House ownership is pretty much exactly as you have described.

    D1 & D2 are late 40s/early 50s age-wise. Both well off with good jobs.

    W does have decent pension income that just about covers monthly outgoings, but there is no "rainy day" sum anywhere.

    Apart from the CH oil, W only spent the money on things other than estate expenditure several months after being told she could keep the money by the other two executors and before D1 & D2 started demanding it be paid back. She did not spend it at the outset - I didn't make that clear, sorry.

    At the time, the only liquid funds W had for the heating oil were the ones in the estate account. This was spent before she realised she was not the only executor.

    Terms of her life interest in the house say she has to keep it properly maintained and insured. In total out of the 1/3-ish of the estate she has, she has spent perhaps 10-20% on things other than funeral, testamentary or property maintenance - around £3,000 in all. She was willing to pay this back but was shot down by D1 & D2 saying that she shouldn't have spent the money on the property maintenance (that their father had already arranged for the early summer) and that needed to be paid back too. Clearly a bit ridiculous when considering everything.
    The bottom line is that W was in a position of trust and spent funds that she had no right to spend. The law treats those who abuse the position of trust severely. The fact that the expenditure on the house was planned makes no difference. In fact until probate is granted an executor has very limited powers to spend money usually just the funeral costs. from what you have said W also spent money on fuel oil rather than paying for it herself. Even if W had the right to live in the house she would still be responsible for the outgoings. D1 & D2 are correct in saying she must pay the money back.
  • Well, if D had instigated major work on the house and then died without leaving his widow any funds to pay the builder, and left her no funds to pay her winter heating, she was left in a difficult position. Any trustee of a discretionary trust who would refused such claims would, in my eyes, be most UNreasonable.

    She was wrong to jump the gun and use funds before probate. She should have stalled the builders saying 'waiting for probate' , [tough on them] , .... ?and gone without heating??!!!?? .... And got on with applying for probate ASAP.

    I do understand where W was coming from, though she was wrong not to get probate sorted first.
    - No intention of defrauding estate, had all figures at date of death, will complete probate forms correctly
    - believes she is now sole executor
    - believes she is now sole trustee
    - believes discretionary trust is intended for exactly such things
    - knows there is no inheritance tax to pay (I'm assuming)
    - thinks best to use the funds she believes she can grant to herself rather than unnecessarily troubling her children or getting into debt to pay builder and winter heating.

    Misguided, but understandable.
    And deemed wrongful action for an executor in a court of law.
    As I read it the work on the house was planned but not actually contracted for. I just get the impression that it was much more than misguided. A reasonable executor would have taken advice before acting. The fact that a judge removed her as executor strongly suggests that she was quite wrong in her actions.
  • edited 28 May 2016 at 1:34PM
    Tuesday_TenorTuesday_Tenor Forumite
    998 posts
    edited 28 May 2016 at 1:34PM
    The bottom line is that W was in a position of trust and spent funds that she had no right to spend. The law treats those who abuse the position of trust severely. The fact that the expenditure on the house was planned makes no difference. In fact until probate is granted an executor has very limited powers to spend money usually just the funeral costs. from what you have said W also spent money on fuel oil rather than paying for it herself. Even if W had the right to live in the house she would still be responsible for the outgoings. D1 & D2 are correct in saying she must pay the money back.

    But the authority to act as executor and trustee comes from the will.

    W believed she was the sole executor and trustee once F resigned.

    Probate is needed to prove to OTHERS that you are the person with the authority to act. W did not need to prove to herself or D1+D2 who she was! They all knew her and knew contents of the will! So until the appearance of the codicil, I'm not clear that she WAS abusing any trust as long as she was honouring any terms and conditions set on the DT.

    Interesting. And I'm no lawyer, just saying things that occur to me as a lay person.
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