Running costs on Property awaiting Distribution

Margot123

Another of my hypothetical questions: a property is bequeathed between 3 beneficiaries, there are a further 2 residual beneficiaries named in the will. The executors are awaiting the sale of the property. Are the standing charge utility bills, insurance etc paid from the total estate or from the residual money of the 3 inheriting the property? This is a confusing one as the property is part of the estate until distribution, signing of sale contracts etc.

FreeBear

For gas & electricity, it is always worth considering changing to a supplier that doesn't have a standing charge - Ebico would be my recommendation as there is no exit fees should the next owner want to go with one of the main suppliers.

Broadband contract can always be terminated, which is something the executors should do as a matter of course in my opinion. Certainly, the telephone would also be a candidate for termination if the sale is not imminent.

That just leaves water & council tax - The latter may well be zero for a period, but water is ongoing. I would expect these to come out of the total estate at the end of the day. This would not affect any specific bequests (such as "I leave £10K to my cook"), so it would end up reducing the residual.

Keep_pedalling

Margot123 wrote: »

Another of my hypothetical questions: a property is bequeathed between 3 beneficiaries, there are a further 2 residual beneficiaries named in the will. The executors are awaiting the sale of the property. Are the standing charge utility bills, insurance etc paid from the total estate or from the residual money of the 3 inheriting the property? This is a confusing one as the property is part of the estate until distribution, signing of sale contracts etc.

Interesting question. I would have thought that these costs should be treated like the costs in actually selling the property, and therefore be deducted from proceeds from the house sale, and not fall on the residual beneficiaries.

My wife was a residual beneficiary of a Scottish estate, there were no deductions in the accounts for anything to do with the house which was left to someone else.

Yorkshireman99

It depends on the exact wording of the will. If the will says it is to be divided between three people without being sold then the executors have no right to sell. They just have to convey it to the three beneficiaries. The estate is not liable for any costs since the date of death other than the conveyancing costs. If the will says the property is to be sold and the proceeds divided between three people then the estate bears all the costs until the house is sold.

Margot123

Thanks all.
What if the property is being held in trust for the 3 named beneficiaries to do as they please with it?

nobody999

I know that the original question is not really about the detail of what costs there may be but as they have been raised:
Insurance, which was mentioned by the OP and needs to be maintained to protect the beneficiaries interests, this will be more expensive/ restricted with the house empty and also Council Tax may well be more than standard. In my area the Council dictates that empty properties pay 150% council tax after 6 months empty apparently to persuade landlords to let properties promptly, the first 6 months is at 100%, this varies between different Councils.

Margot123

nobody999 wrote: »

I know that the original question is not really about the detail of what costs there may be but as they have been raised:
Insurance, which was mentioned by the OP and needs to be maintained to protect the beneficiaries interests, this will be more expensive/ restricted with the house empty and also Council Tax may well be more than standard. In my area the Council dictates that empty properties pay 150% council tax after 6 months empty apparently to persuade landlords to let properties promptly, the first 6 months is at 100%, this varies between different Councils.

Council Tax, as far as I am aware, is waived until date of probate and then charged at 50% for the first 6 months while the property is unoccupied.

Tom99

I think the costs should be bourne by the 3. If the house went up in value I doubt they would be willing to share that increase.

nobody999

Margot123 wrote: »

Council Tax, as far as I am aware, is waived until date of probate and then charged at 50% for the first 6 months while the property is unoccupied.

Apologies if you have already checked that with your local Council.

getmore4less

Margot123 wrote: »

Council Tax, as far as I am aware, is waived until date of probate and then charged at 50% for the first 6 months while the property is unoccupied.

Check again, you will find that is wrong.

SevenOfNine

FreeBear wrote: »

That just leaves water & council tax - The latter may well be zero for a period, but water is ongoing.

Water isn't "ongoing" but perhaps that may be dependent on which region you live in? Anglian Water stopped their charges immediately until the house was sold. What little we used in the interim was not charged for.

Council tax also ceased, no charge until probate, then a further maximum of 6 months free.