Can you pay instead of selling assets to cover debt?

Resurrect

Hi all,

I am the executor & beneficiary on an estate & have just started looking through paperwork.

It looks like a large debt is going to be discovered and there is only a little cash & no life assurance policy.

I am wondering instead of selling assets that I would prefer to keep whether I could put money in or pay the solicitor dealing with the probate to settle the debt? 

Can’t find any examples of this or any mention of it being possible online. Not at the point of appointing a solicitor quite yet so thought I’d ask here first! 

Thank you

xylophone

If IHT had to be paid before probate could be granted, there would be no problem in either the executor or a beneficiary's  electing to pay and being repaid after probate was granted and the estate assets accessible.
There seems little difference between that and the scheme you propose.

Dox

If you are the sole executor and sole beneficiary, yes. If you are a joint executor - yes if your fellow executor(s) agree. If there are other beneficiaries, yes if their legacies are not affected.

Resurrect

Thank you for your replies.

So crudely, see what the debt will be and discuss with the solicitor paying to make up the difference so that the estate can cover the debt? Or pay the debt with the solicitors guidance? 

There is a joint executor & beneficiary who wants to keep the assets jointly with me & would rather find the money to be able to keep them. 

Shouldn’t be any IHT. 

getmore4less

You only have to pay upto the value of the assets you want to keep. 

There are rules on self dealing with estate assets. 

Resurrect

Thanks GM4L - not heard of self dealing before.

In my case, could I put money in rather than buy an asset?

The assets we want to keep are fields which we want to remain in our family. 

As there are assets but we don’t wish for them to be sold, could this be an insolvent estate? 

Keep_pedalling

Resurrect said:

Thanks GM4L - not heard of self dealing before.

In my case, could I put money in rather than buy an asset?

The assets we want to keep are fields which we want to remain in our family. 

As there are assets but we don’t wish for them to be sold, could this be an insolvent estate? 

It is only an insolvent estate if the debts exceed the assets.

Resurrect

If you were in a similar situation, what would you do? I know it’s difficult to know my feelings etc regarding the land but if you had a debt that couldn’t be covered with cash / life assurance but didn’t want to sell any property? 

Marcon

Resurrect said:

As there are assets but we don’t wish for them to be sold, could this be an insolvent estate? 

No. If there are assets and there is no other way to pay the debts of an estate, you don't have any choice about selling, because debts need to be settled before anyone inherits anything. 

Marcon

Resurrect said:

If you were in a similar situation, what would you do? I know it’s difficult to know my feelings etc regarding the land but if you had a debt that couldn’t be covered with cash / life assurance but didn’t want to sell any property? 

You don't have a choice about selling if you can't settle the debt any other way, so don't waste time agonising.

Resurrect

I am hoping that say the debt is c£80k, I can pay this / arrange finance and then keep the land in the family rather than having to sell it to pay the debt.

Would this be a possibility?