Executor has spent the money in the estate in a frivolous legal case

QuimbusFlestrim

My Aunt died 4 years ago. She was childless and did not have any living siblings. She left the bulk of her estate to her grand nieces and nephews. There are 11 beneficiaries. She was in a care home for the last 5 years of her life which was paid partially through her pension and partially via the state. When she went into the care home, my Uncle was suffering from mental impairment and when the means assessment was made, he stated that she did not own a house (which was partially true as he had purchased it in his name only as my Aunt never worked). This meant that the state paid most of her care fees. My Uncle died 6 months after my Aunt went into a care home and left the house to her. We did not know what happened after this as my Uncle's and Aunt's affairs were managed by their local solicitor who was the executor of the estate. 

Once my Aunt died, the care home took legal action to retrieve the fees after the sale of the house. Even in a dilapidated state the house sold for over £650,000. The executor decided without consulting any of the beneficiaries to contest the case and his firm spent 3 years fighting the matter. They charged over £100,000 in legal fees including barristers' advice, mediation with the care home and then finally settled out of court to pay the care home £180,000. The first I heard of this matter was when the executor's firm (the solicitor has since died) sent me the accounts last week and asked me to sign them off to issue payment to my children. After death duties, debts and legal fees each beneficiary will get less than £19k. 

I asked the law firm why they spent more than 50% of the cost of the debt, contesting it and they advised me that the executor in charge has subsequently died. They told me that they contested the care home fees based on the advice of my estranged brother who's children are also beneficiaries. They did not consult any other beneficiaries. Does the executor have to take the advice on behalf  

QuimbusFlestrim

of the beneficiaries or should they manage the estate to the best of their abilities ?

What questions should I ask to understand whether they acted in the bets interests of the beneficiaries rather than to line their own pockets? I feel something is wrong in this matter. I have a feeling that the solicitor in this case used it to bulk up the feeds for their small law firm rather than in the best interests of the beneficiaries. My brother will not speak to me as we had a falling out several years ago. 

Keep_pedalling

We’re any your brother’s children minors at the time?

was the £180k paid to the care home less than they were originally claiming?

QuimbusFlestrim

My brother's children were all minors, however, my brother was only acting on behalf of a few beneficiaries. Shouldn't the executor act on behalf of the whole estate? I cannot speak to my brother as to the circumstances and am relying solely on my communication with the executor's law firm. 

I have not seen the original care home bill prior to the court case but have asked for it as well as the grounds in which they felt they could contest the payment of fees. Are the law firm required to perform a cost/benefit analysis? Let's say the original bill was £200k, they know that they have a 50% chance of winning the case but this would cost £100k, should they contest on these grounds? 

QuimbusFlestrim

I believe the care home should be paid what is due but cannot understand why they chose to contest as there are fees and these have not been paid. Is there a conflict of interest on the part of the executor, appointing his own law firm to handle contesting the case ?

JamoLew

How much were the actual care home fees ?

Settled out of court for 180k would indicate they were probably higher

xylophone

When she went into the care home, my Uncle was suffering from mental impairment and when the means assessment was made, he stated that she did not own a house (which was partially true as he had purchased it in his name only as my Aunt never worked).

If the house stood in his sole name and he had paid for it, then it was perfectly true?

My Uncle died 6 months after my Aunt went into a care home and left the house to her. 

Then the house became her  asset at this point  and could be taken into account from then onwards in the fees assessment.

Did the exor of your uncle's will not advise the LA/the Care home at this point? If not, why not?

Nobody was living in the property and therefore it could have been sold once probate was granted  and the capital used to pay her fees?

Or did the exor fail in his duty to advise the LA of the inheritance (you've said that it was paying the fees) or indeed the Care Home?

If so, presumably the LA  was continuing to pay her fees to the care home so why did the Care Home sue for payment rather than the LA?

Or are you saying that the LA demanded a refund from the Care Home and having paid up, the Care Home sued for payment from your Aunt's exor?

I asked the law firm why they spent more than 50% of the cost of the debt, contesting it and they advised me that the executor in charge has subsequently died. They told me that they contested the care home fees based on the advice of my estranged brother who's children are also beneficiaries. 

But power lay with the exor who was acting for the estate and  should have acted in the best interests in the best interests of all the beneficiaries?

And the maths is puzzling - if the solicitor was paid £100,000 and the Care Home was paid £180,000, there should have been some £370,000 left over.

11 x £19,000 = £209,000.

Where is the rest of the money?

Keep_pedalling

QuimbusFlestrim said:

My brother's children were all minors, however, my brother was only acting on behalf of a few beneficiaries. Shouldn't the executor act on behalf of the whole estate? I cannot speak to my brother as to the circumstances and am relying solely on my communication with the executor's law firm. 

I have not seen the original care home bill prior to the court case but have asked for it as well as the grounds in which they felt they could contest the payment of fees. Are the law firm required to perform a cost/benefit analysis? Let's say the original bill was £200k, they know that they have a 50% chance of winning the case but this would cost £100k, should they contest on these grounds? 

The problem is a executor cannot at for all beneficiaries if they are in disagreement as what to do. The other beneficiaries or their parents certainly should have been consulted about how to proceed, but I think you need professional advice if you wish to challenge why your children should be responsible for a portion of those costs.

first off I would ask the solicitors for some details on the finances including the level of fees the care home were originally asking for. Without that information you can’t really asses how much this has cost each beneficiary.

getmore4less

Did anyone have POA for the Aunt.

The administration of the uncles estate should have updated whoever was in charge of the aunt affairs.

When was the house sold relative to the 2 deaths.

QuimbusFlestrim

xylophone said:

When she went into the care home, my Uncle was suffering from mental impairment and when the means assessment was made, he stated that she did not own a house (which was partially true as he had purchased it in his name only as my Aunt never worked).

If the house stood in his sole name and he had paid for it, then it was perfectly true?

My Uncle died 6 months after my Aunt went into a care home and left the house to her. 

Then the house became her  asset at this point  and could be taken into account from then onwards in the fees assessment.

Did the exor of your uncle's will not advise the LA/the Care home at this point? If not, why not?

Nobody was living in the property and therefore it could have been sold once probate was granted  and the capital used to pay her fees?

Or did the exor fail in his duty to advise the LA of the inheritance (you've said that it was paying the fees) or indeed the Care Home?

If so, presumably the LA  was continuing to pay her fees to the care home so why did the Care Home sue for payment rather than the LA?

Or are you saying that the LA demanded a refund from the Care Home and having paid up, the Care Home sued for payment from your Aunt's exor?

I asked the law firm why they spent more than 50% of the cost of the debt, contesting it and they advised me that the executor in charge has subsequently died. They told me that they contested the care home fees based on the advice of my estranged brother who's children are also beneficiaries. 

But power lay with the exor who was acting for the estate and  should have acted in the best interests in the best interests of all the beneficiaries?

And the maths is puzzling - if the solicitor was paid £100,000 and the Care Home was paid £180,000, there should have been some £370,000 left over.

11 x £19,000 = £209,000.

Where is the rest of the money?

The estate had to pay death duties/taxes/conveyancing/administration of the estate/resolve a land issue related to access/debts and additional monies which swallowed up the rest of the monies above the 100k legal and 180k care home fees. In total the solicitor's firm took 1/3, the care home 1/3, the exchequer a small amount and the beneficiaries were left with a tiny amount. My husband says we should just take the money as we did not earn it, but this seems really unfair that the solicitor's firm acting as the executor has spent most of the cash.

I know very little at this point. Just a brief letter with the accounts and the assets to be distributed,

theoretica

My understanding is that executors need to act in the best interests of beneficiaries but this does not necessarily mean asking them - or their guardians - what they would like.  I suggest that you ask them for documentation that they assessed starting - and continuing - with the case was in the best interest of all minor beneficiaries.