Not enough liquid assets in estate for beneficaries

Yankee1971

Thank you for your confirmation re pro-rata legacies.
The house went into trust following the death. The guardian has moved into the house. The guardian still owns their own property.
The other 2 beneficiaries are a family friend and this guardian.
The children are very well provided for with a healthy annual pension from the deceased until they leave full time education (including university) which, whilst the other trustees/executors can advise how it is spent, the guardian has access to only (whilst the children are minors I presume).
There are other assets available in the trust that could be sold which I am confident would make up the shortfall.
I have remained dignified and quiet with the executors/trustees - the children's needs are absolutely paramount. However just wanted to know where I (including the other beneficiaries) would legally stand if there was a shortfall.
Thank you again.

Keep_pedalling

Yankee1971 wrote: »

Thank you for your confirmation re pro-rata legacies.
The house went into trust following the death. The guardian has moved into the house. The guardian still owns their own property.
The other 2 beneficiaries are a family friend and this guardian.
The children are very well provided for with a healthy annual pension from the deceased until they leave full time education (including university) which, whilst the other trustees/executors can advise how it is spent, the guardian has access to only (whilst the children are minors I presume).
There are other assets available in the trust that could be sold which I am confident would make up the shortfall.
I have remained dignified and quiet with the executors/trustees - the children's needs are absolutely paramount. However just wanted to know where I (including the other beneficiaries) would legally stand if there was a shortfall.
Thank you again.

From what you say there the house has been left in trust to specific people, so even if it it sold sometime in the future then the proceeds cannot be used to make up for shortfalls in liquid assets for cash bequests.

If the will does not actually say what should happen under these circumstances, then these cash bequests should be reduced proportionally amongst those specific beneficiaries.

Yorkshireman99

Yankee1971 wrote: »

Thank you for your confirmation re pro-rata legacies.
The house went into trust following the death. The guardian has moved into the house. The guardian still owns their own property.
The other 2 beneficiaries are a family friend and this guardian.
The children are very well provided for with a healthy annual pension from the deceased until they leave full time education (including university) which, whilst the other trustees/executors can advise how it is spent, the guardian has access to only (whilst the children are minors I presume).
There are other assets available in the trust that could be sold which I am confident would make up the shortfall.
I have remained dignified and quiet with the executors/trustees - the children's needs are absolutely paramount. However just wanted to know where I (including the other beneficiaries) would legally stand if there was a shortfall.
Thank you again.

When you say the house went into trust does the will actually say that or does it say that the two minors are the residuary beneficiaries? The reason I ask is that upon death ALL the estate assets are held in trust by the executors. The difference is absolutely critical.

theoretica

The wording of the will is absolutely crucial. Do you have it? If someone writes a will leaving more than they own something has to give and the will could have been written to protect the house.

Yankee1971

Thank you again.
I do not have a copy of the Will but I know I could get this from probate.
The two minors are residuary beneficiaries although they are unable to sell the house until they come of age.
Thank you.

Jenniefour

As Yorkshireman and others have said, the precise wording is the key to this. Exactly how (and where) the word "trust" has been used will determine it's legal meaning/interpretation. That will determine how the will itself should be legally understood, and what the executors should be doing. So why not get a copy of the will so that the meaning of the wording can be explained accurately. If you do that, and post the wording on here just leave out the names.

PasturesNew

The money needs to be raised somehow. Options include:
- you getting your portion, but in the future by have a charge put over the house in some way so you get it in the future when it's sold.
- the adults in the household could pay "rent" for living there, to settle the inheritance
- somebody could raise a mortgage to pay off the inheritance.

It is wrong for you to accept a lower pay off - and a disproportionate pay off.

You shouldn't be out of pocket and "robbed" of your intended inheritance simply because somebody pulls out the emotional card and does the sad eyes.

The house doesn't need to be sold, but others need to man up to their obligations to getting everybody correctly "paid their dues".

unholyangel

Yankee1971 wrote: »

Thank you again.
I do not have a copy of the Will but I know I could get this from probate.
The two minors are residuary beneficiaries although they are unable to sell the house until they come of age.
Thank you.

I think you perhaps need to get the exact wording of the will to get any sort of clear answer.

A residual beneficiary is where they are entitled to whatever is left in the estate once all other financial obligations (debts, expenses and specific bequests) have been settled.

Or do you mean that the children have been both given specific bequests and also named residual beneficiaries?

Yorkshireman99

Yankee1971 wrote: »

Thank you again.
I do not have a copy of the Will but I know I could get this from probate.
The two minors are residuary beneficiaries although they are unable to sell the house until they come of age.
Thank you.

Thanks for that. You really need to get a copy of the will to solve the conundrum. Without it nobody can tell what the options are. Has it been admitted to probate? If so you can get a copy for £10 online. The link below shows you

https://www.gov.uk/search-will-probate

silvercar

Is your question whether the children have to have their share of the house reduced in order that all the beneficiaries suffer a pro-rata reduction as opposed to only the other benficiaries suffer the pro-rata reduction?

eg house worth 500k, kids live there for the moment, then it can be sold and they get 250k each. 3 adult beneficiaries were left say 600k/ 200k/200k but there is only 800k in the pot rather than 1m,

scenario 1 : cash divies up as 480k/ 160k/ 160k each and the kids still get to live in the house and eventually get 250k in full.

scenario 2: total (house + cash) = 1.3m so cash divies up 520k/ 173k/ 173k to adults and kids eventually get 217k each. (With the complication that the kids are in a house worth to them 250k each.)

scanario 3: kids only get what's left after the other legacies paid so adults get 600k/ 200k/ 200k. Kids get 150k from eventual sale of the house (with complication that they are living in it now.)