Not enough liquid assets in estate for beneficaries

Yankee1971

Hi, I have posted on here previously however have a new question which I would value an opinion on please.
I already understand that once the executors have paid the liabilities of the estate, then the distribution of gifts of specific sums of money will be made from the residuary estate.
I have been left a significant cash gift. There are 2 other beneficiaries who each have been left smaller amounts. I am informed by the executors that there may not be enough liquid cash to cover the legacies and I feel they are focusing the shortfall on my legacy only as mine is the largest. The estate also includes significant property which the executors would prefer to leave separate as there are minors living in it.
The executors have mentioned that they will be able to give me an good interim proportion of my legacy. I do not believe they have mentioned the same to the other 2 beneficiaries, I think the beneficiaries are under the impression they will receive their full amount as their legacies are much smaller. I would challenge this if it came to it on a pro rata reduction.
The executors are reluctant to sell the property until the minors are of age (in 12 years) although have talked of obtaining a small mortgage to release equity.
It is reasonable to have to wait this long or can they be made to get a mortgage? Also am I within my rights to ask for interest if they exceed the 'executors' year'?
Thanking you in advance.

Yorkshireman99

Yankee1971 wrote: »

Hi, I have posted on here previously however have a new question which I would value an opinion on please.
I already understand that once the executors have paid the liabilities of the estate, then the distribution of gifts of specific sums of money will be made from the residuary estate.
I have been left a significant cash gift. There are 2 other beneficiaries who each have been left smaller amounts. I am informed by the executors that there may not be enough liquid cash to cover the legacies and I feel they are focusing the shortfall on my legacy only as mine is the largest. The estate also includes significant property which the executors would prefer to leave separate as there are minors living in it.
The executors have mentioned that they will be able to give me an good interim proportion of my legacy. I do not believe they have mentioned the same to the other 2 beneficiaries, I think the beneficiaries are under the impression they will receive their full amount as their legacies are much smaller. I would challenge this if it came to it on a pro rata reduction.
The executors are reluctant to sell the property until the minors are of age (in 12 years) although have talked of obtaining a small mortgage to release equity.
It is reasonable to have to wait this long or can they be made to get a mortgage? Also am I within my rights to ask for interest if they exceed the 'executors' year'?
Thanking you in advance.

The executor need to be told, politely but firmly, that they must treat all beneficiaries equally. Unless the will says otherwise the house has to be sold without undue delay. Interest would be payable if the executors delayfor an un reasonable time. The executor are unlikely to be able to get a mortgage.

jackyann

Yorkshireman is, I am sure, correct, legally (he usually is).
However, this involves the home of young children, who have suffered some sort of bereavement. In my book, their well-being should be paramount.
Exectors have specific duties regarding the estate, they may, depending on their relationship to the deceased, feel some obligation to the family apparently housed by them.

You don't say what your relationship is to the children, how important they are to you, or why they are in the house. I wonder where the family would go if the sale of the house is enforced?

I would suggest some sort of round table discussion: executors, beneficiaries, the children's parent / guardian, and all of the information laid out for all to see. Once you all know where you stand, you may be able to arrive at a helpful compromise. I realise that may not be what you want.

Yorkshireman99

jackyann wrote: »

Yorkshireman is, I am sure, correct, legally (he usually is).
However, this involves the home of young children, who have suffered some sort of bereavement. In my book, their well-being should be paramount.
Exectors have specific duties regarding the estate, they may, depending on their relationship to the deceased, feel some obligation to the family apparently housed by them.

You don't say what your relationship is to the children, how important they are to you, or why they are in the house. I wonder where the family would go if the sale of the house is enforced?

I would suggest some sort of round table discussion: executors, beneficiaries, the children's parent / guardian, and all of the information laid out for all to see. Once you all know where you stand, you may be able to arrive at a helpful compromise. I realise that may not be what you want.

Whilst I appreciate the points you make the executors must not allow their personal feelings overide their legal obligations. It sounds harsh but I would suggest those concerned get some paid for legal advice to help matters. For example it might be possible to buy a smaller property though trust law may prevent this.

theoretica

Who is inheriting the portion of the estate that includes the house? Could they buy it off the estate by paying the remainder of your inheritance?

Yorkshireman99

According to the OP the hosue has been left to two 12 year olds so not possible.

jackyann

I'm not sure that the house has been left to the children (or even their parent/ guardian). OP simply says that they are living there.
It sounds like a sadly complicated situation, and either a poorly drawn-up, or not updated will.
But I cannot think that anyone's interests are served by delaying tactics or partial explanations. The executors should at least lay it out clearly - OP doesn't say if they are solicitors, if not, they should maybe seek legal advice.

Yankee1971

Thank you both.
The Will is legal, perfectly written and up to date. The house is in trust and has been left to the children. It can be sold when the youngest comes of age in 12 years time. They are currently living in it with their guardian. The guardian is one of 3 executors/trustees, the other 2 are another family member and family friend. The house has been valued at approx £500K and is mortgage free.
I understand the executors' obligations, I am an understanding, reasonable person and it's because of this, I find myself in a dilemma. If there is a shortfall, could they get a mortgage and not have to sell the house as I believe the shortfall although large to me would be relatively small to them?
Thank you again.

Yorkshireman99

Are you saying the house was already in trust before the death? The wording of the will is crucial.

badmemory

I have to say that this sounds like a really badly written will or at least ill-advised/badly informed of writers circumstances & anyone not prioritising the security of their underage children - well words fail me (a rare occurance). Could 2 underage children get a mortgage? If they did was there enough pension left to them to pay it? Sounds like an executors nightmare, so glad I'm not one of them! Could an executor get a mortgage on their behalf? Seems unlikely though they may as their guardian, if they are their guardian?

I would have thought that if they have a guardian, then that guardian is unlikely to agree to a mortgage, that they will have to pay presumably, if they don't actually have to. I certainly know that if I was their guardian there is no way I would agree to that unless I had absolutely no choice.

Having said that I do believe that all residual legatees should get the same %. So no saying one gets 100% and another gets 80%, but do you actually have proof of that?

Yorkshireman99

badmemory wrote: »

I have to say that this sounds like a really badly written will or at least ill-advised/badly informed of writers circumstances & anyone not prioritising the security of their underage children - well words fail me (a rare occurance). Could 2 underage children get a mortgage? If they did was there enough pension left to them to pay it? Sounds like an executors nightmare, so glad I'm not one of them! Could an executor get a mortgage on their behalf? Seems unlikely though they may as their guardian, if they are their guardian?

I would have thought that if they have a guardian, then that guardian is unlikely to agree to a mortgage, that they will have to pay presumably, if they don't actually have to. I certainly know that if I was their guardian there is no way I would agree to that unless I had absolutely no choice.

Having said that I do believe that all residual legatees should get the same %. So no saying one gets 100% and another gets 80%, but do you actually have proof of that?

The OP needs to tell us exactly what the will says regarding the house otherwise it is impossible to give clear advice regarding the house other than to say it is essential the executors get paid for professional advice without delay. If there is not enough cash to pay all the legacies then they ALL have to reduced pro-rata. If the executors favour some then they can be sued.