Buying flat from deceased estate

seven-day-weekend

Just another question, as I have not yet studied how to be an executor, although I have some idea:

Do the charities have to know ? Can I just administer the estate, then hand them a cheque afterwards? I know they will then get a copy of the will, but do they have to know before I have dealt with the flat?

G_M

They will see the will at some point. If you've just 'handed them a cheque' they may ask to see the Estate accounts (which you should have prepared). This will show them how much the property sold for (thus confirming that they correctly received 1/3rd).

But they may then dispute that you obtained the best price, thus deprivingg them of income owed to them, in which case

a) you could face a long court dispute and
b) you might have to find & pay them the extra amount that they should have received.

I suspect Inheritance Tax will not be an issue for you due to the likely low value of the Estate (below £325,000 there's no IHT ), but in my case, where my mother's Estate was above the threshold, and I was claiming a rebate for bequests to charities (which are tax free), I had to ask each charity for a letter proving they knew of and were expecting the bequest, to show HMRC, before HMRC would deduct that amount from the taxable value of the Estate.

Long story short - yes, charities will know. Hence a fixed amount in a will, which cannot be queried in any way, is preferable to a % of the total estate or a share of a property - both of which are variable amounts and thus open to dispute.

seven-day-weekend

Thanks for your very helpful reply. I have obviously a lot to learn, even for what appears to be a very simple will!

Mojisola

seven-day-weekend wrote: »

Do the charities have to know ?

Large charities employ firms who check all wills once they are available for any legacies.

The charities then contact the executors. Some of them have the reputation for being a total pain - they have a legal obligation to maximum all donations but some take it too far.

From experience, our solicitor said that it's best to leave a set amount rather than a percentage of the estate or a property - the executors could find themselves having to justify every single expense that might affect the charity's final lump sum.

Keep_pedalling

With such a short lease its value is only going to fall over time, so I would not dream of buying it now.

00ec25

Mojisola wrote: »

Large charities employ firms who check all wills once they are available for any legacies.

indeed. Quite an eye opener when you see just how many wills entering the public record at the probate office appear on lists sent to charities saying "you stand to benefit, so get contacting"

Mojisola wrote: »

The charities then contact the executors. Some of them have the reputation for being a total pain - they have a legal obligation to maximum all donations but some take it too far..

Reminds me of one where the charity continues to contact the vicar of the church every 10 years for written confirmation from him that "Aunt Clarissa's" grave is still "being looked after", otherwise the will clause reverting a pecuniary legacy to the charity kicks in, and the vicar would have to send the dosh to the charity.

Naturally there will come a point in time where inflation means the dosh won't even cover the cost of the stamp to write the letter, but when I last looked at that file it was still a few iterations away so the charity has a "duty" to carry on regardless. If recall correctly, they are now writing to their third vicar in succession as its been going a long time.

seven-day-weekend

One is a small local charity, (a hospice), the other is Macmillan Nurses.

I don't think we are going to bother trying to buy the flat, it will be too much hassle.

Both my husband and I have also mentioned the local hospice in our wills. Our friend died there, they gave him terrific care for the short time he was in. We have specified an exact amount however . We have also specified an exact amount for other charities - thinking about it, our solicitor advised us to do that.

I think I will ask her to change her will to an exact amount for the charities,if it will not cost her too much to do so.

00ec25

seven-day-weekend wrote: »

I think I will ask her to change her will to an exact amount for the charities,if it will not cost her too much to do so.

it's a solution, but of course does "require" the estate to have enough cash/liquid assets to cover the amount without having to sell the property anyway

I don't really follow why you think it a bad idea to try and buy the property from the other beneficiaries. It's just a bit of extra admin and time to reach an agreed figure.

seven-day-weekend

00ec25 wrote: »

it's a solution, but of course does "require" the estate to have enough cash/liquid assets to cover the amount without having to sell the property anyway

I don't really follow why you think it a bad idea to try and buy the property from the other beneficiaries. It's just a bit of extra admin and time to reach an agreed figure.

I am pretty sure won't have

As for the flat, it's not going to be a bargain if we have to pay market value based on its value with an extended lease, and then actually extending the lease, which I know from my son extending his lease on a flat in the same development is about £12k before costs :eek::eek::eek:

G_M

* do you mean you're not going to buy the flat now, or not going to buy it from the Estate in the future?

* Provided the fixed amount bequeathed to charities is lower than the total value of the Estate (property value on date of death plus any other assets, savings, personal possessions etc, less any Estate costs, debts like the mortgage etc), there will still be a 'residue' in the Estate for a any other Beneficiary to inherit.

* if the non-property assets of the Estate were insufficient to pay the charities their fixed bequests, tere would be two options:
1) The Executer could sell the property on the open market to pay the Charities, and then pass any residue to the Beneficiary
2) The Executer could sell the property to that Beneficiary to pay the Charities.

* some charities will pay the solicitor's fees for a will, in hope and expectation of getting some income in the future. macmillan offer a discount. See

https://www.macmillan.org.uk/donate/gifts-in-wills/will-writing.html