Will split 3 ways with charities

Gramps80

I was wondering if anyone can help with a question about an estate being split between a family member and 2 charities? I've done a fair bit of research online, but can't find anything which fits this situation.


So, by way of background...

My uncle and aunt have named me and my aunt's sister as the executors of their will. The main beneficiaries of the estate (aside from me and my aunt's sister having first pick of any possessions, with the remainder to be sold and put into the estate) are my 4-year-old son, the local church and another charity, with each to receive an equal share.

The main asset involved would be my uncle and aunt's flat, but my question is, as an executor, am I required to sell the flat to give the charities their share of the estate? The will states that my son wouldn't receive his share until he reaches the age of 21, so I would be inclined to keep the flat at least until then so he can make up his own mind about what he wants to do with it. What would happen if he gets to 21 and decides he wants to live in it? If he rented it out I'm sure it would just be a case of splitting the rental income 3-ways, but is he entitled to live there as the only 'named' individual in the will?

Also, would the charities be liable for their share of any council tax bill until he's 21 and beyond if they want to maintain their interest in the property?

Thankfully this is just a hypothetical situation as my aunt and uncle are both alive and well, but as it's quite an unusual set of circumstances I wanted to do some research beforehand. Most other wills I've come across usually just leave the majority of the estate to family, with smaller amounts going to charity.

I suspect I may have to get some legal advice, but just wanted to see if anyone had come across anything similar?

Jenniefour

Yes, when the time comes, the property will need to be sold to give the charity and the church their shares of the estate, and the share for your son will be held in trust.

Essentially, the duties of executors are to ensure any/all debts get paid, funeral expenses get paid, and the estate is distributed according to the will.

Keep_pedalling

If they both fit and well now there is little point in over thinking this now. Yes by the time the second of them dies you will have no choice but to sell the flat, assuming they have not already done so themselves, but this sound fairly simple and you should not need the services of a solicitor for probate purposes.

FreeBear

Jenniefour wrote: »

Yes, when the time comes, the property will need to be sold to give the charity and the church their shares of the estate,

If the specified charities are anything like the RSPCA (and a few others), they will be harassing the executors for their share once the will has been submitted for probate. They certainly wouldn't entertain any contribution towards council tax nor would they want to wait for the minor to come of age.

Yorkshireman99

The will may say 21 but the child can insist on payment at 18.

securityguy

There is no way the charities would accept anything other than outright sale, and as the two-thirds owner (collectively) they would have no trouble to enforce it. It would be possible for the charities to be beneficiaries of a trust, or for the will to explicitly leave them two thirds of the income, or a variety of other arrangements, but if they are two-thirds residual beneficiaries the executors will have to sell (unless the remaining beneficiary is able to buy them out) and if they are left as two-thirds owners of a house then they can easily force a sale, and would. Most charities have no interest in being landlords.

The tldr answer to "The will states that my son wouldn't receive his share until he reaches the age of 21, so I would be inclined to keep the flat at least until then" is "you can't".

Malthusian

Gramps80 wrote: »

The main asset involved would be my uncle and aunt's flat, but my question is, as an executor, am I required to sell the flat to give the charities their share of the estate?

Yes, because when the time comes,

a) The charities will want their money now in cash, not a part-share in a flat until the nephew turns 21 (or 18 if he's a very legally clued-up teenager and asserts his rights earlier)

b) Your son's inheritance will need to be invested sensibly until he turns 21 (or 18), in accordance with how a prudent person of business would invest their own money. Exactly what "sensibly" means will depend on how old your son is on the second death and how much time there is until he can inherit. However, "sensibly" does not mean having his entire inheritance invested in a single residential property.

If your son was the sole heir then you would probably get away with keeping his inheritance as the flat, as long as you managed to keep it rented out to reliable tenants and it went up in value (not all flats will go up in value, regardless of what house price indices may say). But the fact that two-thirds of the flat will be inherited by charities and they will want cold hard cash make that a moot point. It will be sold.

The chances that he will want to live in that particular flat in that particular area when he turns 21 are too slim to be worth considering. Would you have wanted to move into your aunt and uncle's house when you were 21?

If your aunt and uncle both pass on then you would sell the flat, invest your son's third in a diversified portfolio of stockmarket funds, and by the time he can or wants to inherit it will be a very nice start towards affording a property of his own choice. (This assumes that when the time comes there are at least 5 years before he inherits.)

getmore4less

If they are still alive review with the testator(s) their will(s) and your ideas/suitability as an executor.

TBagpuss

As others have said, you would not have the right to delay the sale. It may help you to thin of it not as your aunt and uncle leaving your son 1/3 of their flat, but 1/3 of their residual estate - money, which happens to currently be invested in a flat, not the flat itself.

eddyinfreehold

This is a typical example of why it is inadvisable to leave fractions or percentages of an estate to charities in your will. Major charities will not only press for payment following Grant of Probate but can also be particularly fussy about valuations of property and chattels beforehand. It is, after all in their interests. I was given good advice several years ago to leave a fixed sum to charities and not a fraction or percentage. The sum can of course be adjusted up or down in the future with alterations to the will.

Yorkshireman99

FreeBear wrote: »

If the specified charities are anything like the RSPCA (and a few others), they will be harassing the executors for their share once the will has been submitted for probate. They certainly wouldn't entertain any contribution towards council tax nor would they want to wait for the minor to come of age.

A fiend who was a sole executor had this sort of treatment from a large charity. He wrote a polite but firm letter to the CEO of the charity pointing out that he was doing the job because the deceased was a close friend. He told them that in view of their eagerness he was not prepared to be treated in this way and would hand the whole thing over to a solicitor and that as residuary beneficiary they would effectively bear all the extra costs. He got a very rapid apology and they asked him to carry on which he did.