Probate and executor concerns

longwalks1

Please bear with me. As many of you will know I’m helping my partner sort out her late mums estate, IHT and probate. 

There are 3 named executors (mums 3 children) and my partner has spent the last 3 or 4 (more like 5 or 6) weeks sorting out IHT400 practically on her own (ok, with help from you on here).  We are now waiting the 20 working days to apply for probate online after all 3 executors verbally agreed. 

also, there was a life assurance payout to one executor for approx £77k 4 weeks ago that was originally going to be divided among the 3 named beneficiaries (the 3 executors), but then it was decided it wouldn’t be ‘just in case’.  The executor that decided this happens to be the one who’s personal bank account it went into. 

So, in summary, our questions are:

Can one executor sit on £77k of the estate indefinitely, in their own personal bank account, claiming it needs to be kept for 10 months after probate is finally granted ‘just in case’ for emergencies?   This doesn’t sound right, or sit right. 

Probate application is almost complete online (we have an application ref number but are waiting for other 2 executors to read and approve the legal statement that was emailed to them last week).  Can one or both of the other executors submit a paper application and completely leave the 3rd executor off? 

What if 2 executors close ranks and fully exclude the 3rd executor (my partner)?  As in not tell her when probate is granted, or even distribute mums estate as per her wishes on the will?

I know a lot of ‘what ifs’ but we want to know the next steps just in case.  What should be a simple process is turning into stress and worry, which is the last thing my partner needs right now.  

Thank you all for your help and advice.

p00hsticks

I think you'll need to confirm if the life assurance actually forms part of the estate or not, and if not who the named beneficiaries of the policy were.

I've never had life insurance myself but thought that when you took it out you named who you wanted to be the benficiary of it on your death, and that (like pensions) it would usually fall outside the estate ? 

longwalks1

It does form part of the estate as there are no named beneficiaries on the life assurance policy, it was in mums name so was payable to her.  One executor who informed the policy provider of mums passing death with it and has now taken it upon themselves to keep it safe and secure in their own personal bank account.

poppystar

I think this may be a case where ensuring there is an executor bank account would be preferable. This may be a logistical nightmare if executors don’t live close but worth it if it puts everyone on the same page.

I’d sincerely hope that if two probate applications happened HMCTS would pick it up - but nothing there would surprise me. If one application was online though and you sent the original Will off with the correct reference then it seems pretty sewn up. Unless you think there may be another Will somewhere? 

If trust between executors has broken down this could become a nightmare sadly.

jlfrs01

I've been an Executor to my late parents' Estate so may be able to offer up some information based on my own experience. Reading through the post I sense there is mistrust between the Executors. That was the case with me and my sister and it soon spiralled into accusation and acrimony.

My best advice is to engage a Solicitor, it's not only going to dispel any potential finger-pointing but they'll be able to advise on matters such as a Statutory Notice and be a safe haven for the Estate's assets. They'll draw up Estate accounts and ensure everything is correct and above board.

Your Partner's sibling has acted improperly in my view - they clearly applied for her late mother's policy to be paid without consultation and have said it should be sat on for 10 months? There is no legal requirement for specifying 10 months, though it is sensible to keep some funds in reserve to cover any debts. This sibling should also know that in unwisely requesting the policy be paid to themselves, the company will produce a "Taxable Event Certificate" which will be sent to HMRC and they will most likely appoint an investigator to assess whether any tax is due by the sibling. As it forms part of the Estate, income tax should not be due but this Executor is going to have to provide chapter and verse to prove it. I know because I made this exact same mistake!

As for Executors not discharging their duties properly, I would strongly recommend you read up on the legal responsibilities Executors must observe to carry out their duties in line with the deceased's Will. Any shortfall by an Executor could mean they are personally liable to make good and/or at worse find his or herself in Probate Court.

I honestly think to offload the whole process to a Solictor is the best way forward for the family given the concerns mooted in the original post.

p00hsticks

longwalks1 said:

Probate application is almost complete online (we have an application ref number but are waiting for other 2 executors to read and approve the legal statement that was emailed to them last week).  Can one or both of the other executors submit a paper application and completely leave the 3rd executor off? 

Who actually has possession of the original will ? That needs to be sent as a follow up to the probate application, so only one application is only going to be able to be processed, although submitting more than one application for the estate is invariably going to complicate, confuse  and delay things.... 

If the will specifies three executors then the probate office may chase up if they don't see all the names on the probate application and there is no indication that the missing ones have stepped down or reserved powers. 

longwalks1 said:

What if 2 executors close ranks and fully exclude the 3rd executor (my partner)?  As in not tell her when probate is granted, 

Assuming we're talking England and Wales, and that probate is actually required, then anyone can check to see whether probate has been granted or not, and once it has get to see a copy of both the will and grant of probate for a small price - you can't keep it hidden (unless you are the monarchy). 
Search probate records for documents and wills (England and Wales) - GOV.UK (www.gov.uk)

longwalks1 said:

 or even distribute mums estate as per her wishes on the will?

I assume you meant to say 'not distribute mums estate as per her wishes in the will' ?

Unfortunately, as you'll see from past threads on this board ,although there is a legal obligation on executors to carry out the wishes of the will exactly as specified (and they'll sign to say they accept this as part of the probate process), in practice if they fail in that obligation there is little that can be done to force them to without a potentially costly legal battle. 

If you genuinely think that this might happen ,then I agree with jlfrs01 that you may be best handing the whole lot over to a solicitor to deal with - it will cost the estate money, but you can be confident that it will be distributed in accordance with the will. 
Pointing that out to the other two executors may make them think twice .....  

Runner_Duck

If you apply for Probate on line then in my case, both executor's got sent any emails from the HMCTS. There is some logic in not distributing all funds immediately, just in case more IHT is demanded if you manage to get a better than expected offer on a house sale but I wouldn't leave £77k undistributed.  We did not find an Executor's account that paid interest so that's another reason for distributing most of the funds asap.  If that £77k is sitting in one person's account not only are they going to have a tax bill but if it was me I'd be wanting my share plus interest when they do hand it over.

NannaH

Life insurance payments aren’t taxable for beneficiaries, if they take the estate over the IHT threshold,  IHT would be paid from the estate. 

Normally, a large policy is written in trust to keep it outside the estate.  

longwalks1

good good afternoon everyone, and thank you all for your replies.

my partner penned a long message explaining how she was feeling, and that any conflict would cause added stress, delay and problems and miraculously it seems to have worked.  

Probate application was submitted online today after the other 2 executors approved the emailed legal documents.  Had a letter back regarding IHT and said the summary (IHT421) had been passed on to probate office.  So hopefully now, a 3 or 4 month respite from paperwork and stress.

thank you all again and hopefully I won’t be back for a while! (Crosses fingers)