Advice re interest to be paid after 1 year by Executor

Anthear

I believe I am correct in saying that after 1 year 'post death' (???), the Executor/Administrator is obliged to pay interest on the monies they hold on behalf of the beneficiaries to them?

Is anyone able to clarify this? Many thanks.

Keep_pedalling

Depends on the circumstances, if the executor is a professional and it's a cash legacy then yes, although the interest rate will be tiny

Edit. There is a statutory intest rate payable to pecuniary legacies (e.g. £5000 to uncle Fred) which I believe is currently less than 1%. If you are a residual beneficiary that does not apply, as in theory your final payout will include interest and dividends earned on any cash or investments held within the estate, from time of death to final winding up.

Anthear

Thanks for the comment, yes the Executors are professionals - so in this case, the interest is payable one year from the DOD?

Keep_pedalling

Anthear wrote: »

Thanks for the comment, yes the Executors are professionals - so in this case, the interest is payable one year from the DOD?

Not if you are a residual beneficiary, but anyone who has been left a specific some of money is.

It took my wife's uncle's solicitor nearly 3 years to wind his estate up. She was the sole residual beneficiary so no interest was paid, they did however pay all the pecuniary legacies well within the 12 months so all in al they paid no interest.

Yorkshireman99

Keep_pedalling wrote: »

Not if you are a residual beneficiary, but anyone who has been left a specific some of money is.

It took my wife's uncle's solicitor nearly 3 years to wind his estate up. She was the sole residual beneficiary so no interest was paid, they did however pay all the pecuniary legacies well within the 12 months so all in al they paid no interest.

Unless there were very god reasons for the delay the residuary beneficiary should have been paid interest by way of compensation.

Anthear

That's interesting. DOD was in October 2014. No interest paid for 2015/16, but it HAS been paid in 2016/17 tax year, so not sure what's going on there. Nothing was paid out to the beneficiaries in the first 12 months. Taken until now to get to the end. Not happy.

Yorkshireman99

Anthear wrote: »

That's interesting. DOD was in October 2014. No interest paid for 2015/16, but it HAS been paid in 2016/17 tax year, so not sure what's going on there. Nothing was paid out to the beneficiaries in the first 12 months. Taken until now to get to the end. Not happy.

The beneficiaries have a good case against the executor. In the first instance make a formal complaint to the solicitor under their complaints procedure. Interest at High Court rate is 8%.

securityguy

"The beneficiaries have a good case against the executor."

Well, they might. It depends on the size of the legacy, the liquidity of the estate and the complexity of the situation. If you've been left a million quid by Mad Uncle Hamish, payable by an illiquid estate whose main assets are a Grade I listed building in a National Park and some land containing a scheduled ancient monument, an SSSI and what the county archaeologist now suspects to be a previously unknown Capability Brown landscape, then you have no case at all: you're going to have to wait for it to be wound up, which is not going to be quick. On the other hand, if it's a five grand legacy from Prudent Uncle Hamish who had a million quid on deposit with Nat West, then it's outrageous and you should be paid immediately with interest.

Yorkshireman99

It is all very well to phantasise but the reality is that the professional executor should have kept the beneficiaries informed. Unless there are very unusual circumstances then the solicitors are at fault in a big way. Quite why the beneficiaries should have tolerated things for so long needs to be explained.

securityguy

"the professional executor should have kept the beneficiaries informed"

I agree. That's a long way from "a good case against the executor", though. It's "hey, could you tell us what's going on? Thanks."

Keep_pedalling

Have a read of the "time limits" section of this document.

https://www.stoneking.co.uk/literature/info-sheets/probate-guide