Bankrupt beneficiaries want me to commit possible fraud

Niall02

Hello,

I am an executor of an estate and about to pay out the money to beneficiaries. But 2 of the beneficiary are bankrupt and one has an IVA!

The 2 that are bankrupt have asked me to put it in their spouses bank account.

Where legally do I stand with this? As I believe i am liable for fraud if I do this?

Beneficiaries are desperate for money (I'm getting abusive emails as I delay trying to find the correct way to do this and protect myself). One is threatening action for my delay of a week!

Cheers

naedanger

Niall02 said:

Hello,

I am an executor of an estate and about to pay out the money to beneficiaries. But 2 of the beneficiary are bankrupt and one has an IVA!

The 2 that are bankrupt have asked me to put it in their spouses bank account.

Where legally do I stand with this? As I believe i am liable for fraud if I do this?

Beneficiaries are desperate for money (I'm getting abusive emails as I delay trying to find the correct way to do this and protect myself). One is threatening action for my delay of a week!

Cheers

Don't pay out the money to them or their spouses.

If the Executor of the Estate distributes an inheritance directly to a bankrupt beneficiary, then the Executor of the Estate could then be held personally liable to make payment to the Trustee in Bankruptcy, on behalf of the bankrupt person’s creditors.
Source:
https://www.co-oplegalservices.co.uk/media-centre/articles-sep-dec-2017/what-happens-if-a-beneficiary-is-bankrupt/

Edit:
possibly a better link as it covers IVA (although written from the beneficiaries' viewpoint).
https://debtcamel.co.uk/inherit-dmp-dro-iva-bankruptcy/

-taff

How long has it been since the two were made bankrupt? Did the relative die during their active bankruptcy, i.e. in the first year?

Mojisola

Niall02 said:

The 2 that are bankrupt have asked me to put it in their spouses bank account.

Where legally do I stand with this? As I believe i am liable for fraud if I do this?

Beneficiaries are desperate for money (I'm getting abusive emails as I delay trying to find the correct way to do this and protect myself). One is threatening action for my delay of a week!

If you do that, you could end up paying out of your money to the creditors!
The threat is an idle one - people who are desperate for money can't afford to pay solicitors.

Brynsam

Niall02 said:

Hello,

I am an executor of an estate and about to pay out the money to beneficiaries. But 2 of the beneficiary are bankrupt and one has an IVA!

The 2 that are bankrupt have asked me to put it in their spouses bank account.

Where legally do I stand with this? As I believe i am liable for fraud if I do this?

Beneficiaries are desperate for money (I'm getting abusive emails as I delay trying to find the correct way to do this and protect myself). One is threatening action for my delay of a week!

Cheers

Brilliant idea. They can spend money they haven't got confirming that you can't do what they want.

Niall02

Mojisola said:

Niall02 said:

The 2 that are bankrupt have asked me to put it in their spouses bank account.

Where legally do I stand with this? As I believe i am liable for fraud if I do this?

Beneficiaries are desperate for money (I'm getting abusive emails as I delay trying to find the correct way to do this and protect myself). One is threatening action for my delay of a week!

If you do that, you could end up paying out of your money to the creditors!
The threat is an idle one - people who are desperate for money can't afford to pay solicitors.

Do I ask for their creditors details and make direct payment to them rather than the beneficiary ? I very much doubt I'll get their creditor details.

I may be in the situation where my beneficiaries will refused to be paid their inheritance if it's going straight to their creidtors! With that another question appears If they refused to give me details and just hoping I hang onto the money until their issues are resolved? and allow me to pay them, i do NOT want this. I'd rather just give the money out as this has been going on for 5 years (Had to sell house and land).

naedanger

Don't pay creditors either.

You need to pay the official receivers for the bankrupts. (They will then ensure each creditor receives their fair share. If you pay some creditors but not others you could again personally be liable.)

As said already be clear on the timing.

Given you are personally at risk (for little reward) you should be considering get legal advice at the estate's expense, especially if the amounts are large. You don't want to pay the wrong party.

Niall02

naedanger said:

Don't pay creditors either.

You need to pay the official receivers for the bankrupts. (They will then ensure each creditor receives their fair share. If you pay some creditors but not others you could again personally be liable.)

As said already be clear on the timing.

Given you are personally at risk (for little reward) you should be considering get legal advice at the estate's expense, especially if the amounts are large. You don't want to pay the wrong party.

Thank you so much for your advice. One beneficiary is being cagey about being bankrupt. What if they lie to me about whether they are bankrupt or not? If lets say I was taken to court and can provide documents to show that a beneficiary lied and led me to believe they were not bankrupt ,would I still be in trouble?

Sorry to pick your brains but does paying the receiver still apply with an IVA?

Thank you!!

naedanger

I am no expert but I believe there is a register of bankrupts that needs to be checked. (You obviously cannot rely on their word.)

(On IVAs I think it is the beneficiaries' responsiblility to declare their inheritances rather than the executors.)

However I suspect you can err the other way too. For example if the beneficiary had been discharged prior to the testator's death (and had never been rebankrupted) then I suspect if you paid their official receiver you might have problems getting the money back and then the beneficiary might come after you.

Given the estate has been in administration for such a long period I would guess there might be greater scope for error.

Are you a significant beneficiary yourself?

You really want to be double sure of everything before making any payments since it seems like it could be easy to make a very costly mistake.

xylophone

https://www.gov.uk/search-bankruptcy-insolvency-register

luvchocolate

The insolvency register only shows upto 3 months post discharge.
The London Gazette however will show it for ever.
Try asking on the Bankruptcy and living with it board also