inheritance not received, executor has passed and funds have been spent

bubs3110

Hi all, hoping for clarity on an issue

My late FIL was executor to his late mother's will, in which she left a sum to her grandchildren to be received on their 21st birthday.  My FIL was to hold these monies until such time arrived for each child, however it seems he used this money for one thing or another.
He has now passed away and my husband is assisting his mum with sorting pensions and whatnot, and she is due to receive a lump sum which would cover what is owed, and then some.

My question is, is she now liable to replace those funds, can the children who are rightfully owed that money make a claim against her.

She was a traditional wife in that she left all finances to him, and gave me the impression she has no intention of giving the grandkids the full sum they were to inherit 😪. Sadly my FIL didn't trust to parents of the children to hold it for them, he thought they would spend it, ironic huh?

She has no income of her own but she does have savings, is now in receipt of funds from a second pension as well as Bereavement Allowance. The house is owned outright, and she hasn't yet reached state pension age.

Linton

My non-lawyer take on the situation: 

If the original bequest was documented as being held by FIL for the grandkids then it is surely a debt that should  have been paid by FIL's executor from FIL's estate before anything wass passed to FILs beneficiaries.  So your husband's Mum should never receive the money in the first place.

Keep_pedalling

Agree with the above, these bequests are debts owed by his estate and after any secured debts and funeral costs are the first thing that needs to be payed before any bequests are distributed. 

bubs3110

Thank you

This is what I thought, but she feels it's not her responsibility  😪

She is his sole beneficiary, and she was also the executor.

My husband has been assisting her as ahe doesn't do a lot of online things 🙃  and hasn't got a clue (imo)

As and when the kids come of age, the soonest being in approx 4 years, could they make a claim against her?

mebu60

As executor your MIL needs to produce final accounts for the estate which need to include settlement of any debts. She has legal obligations as executor, it is very much her responsibility. There are implications in not adhering to them, your husband needs to drum this into her. 
I don't think the children even need to wait, if there has been no provision from the estate for what they are owed they could probably initiate a claim now. Is this really what your MIL wants? 

bubs3110

I don't think she realised they could make a claim, which is why I asked as I wasn't 100% sure myself

She's not very clued up on these things

 

My husband is to speak with her tomorrow

As far as in aware the debts that he had are still being processed. Some have agreed go wipe them entirely; some are wanting to claim against the estate

The only thing he has to his name, was the home he jointly owned with his wife, his car, and approx 4k in an account, which the bank have now placed in her name 😳

His state pension has gone: there was no option for her to inherit it due to the rules changing.

His private pension one has been settled and they have stated she entitled to £x for the remainder of her life.

The other she is entitled to a lump sum which they are still in the process of dealing with.

With the debts; is she liable to pay them if they are not written off from any money she is due to get

GrumpyDil

If the house was owned as a joint tenancy then it would have become his wife's automatically on death and would not technically form part of his estate.

Similarly any lump sum pension payment is likely to again not form part of his estate. 

That means his estate sounds like 4k in a bank account plus a second hand car which I assume after paying for a funeral and other debts will leave pretty much nothing.

In that basis it sounds likely the estate was insolvent if you accept the bequests as debts of the estate and that gets you into a different conversation but in the circumstances not one I think will take you too far. 

That answer does differ if the house was owned as tenants in common as his half would then form part of his estate but that would need to be checked.

mebu60

There are two entities here:
- your MIL as the executor;
- your MIL as the beneficiary.

As executor she has a legal duty to administer the estate including settlement of any debts. It is not 'her' per se who has to pay them but the estate of which she is the executor, she pays them acting in that role. One of the people she will also pay is herself as the beneficiary after all expenses, debts, other bequests etc are sorted. 

Good luck! Look forward to hearing how your husband gets on tomorrow :-) 

molerat

The only thing he has to his name, was the home he jointly owned with his wife

On what basis was the home owned - joint tenants or tenants in common ?  If the former she owns all of the property, if the latter then his half is part of the estate.

bubs3110

They were joint tenants as far as I am aware

There was no funeral as such. He had a prepaid direct cremation. The family then organised from personal funds a gathering to honour his memory.

The car is worth £1k at best, and that's being generous 🙃

I asked MIL yesterday what she intended to do, and she said she would see the kids got some money but only about half of what they were originally left.

However, I feel she should ensure they are left everything they were given, and I jist wanted to know the legal position so we could advisw her correctly.

GrumpyDil

In which case it looks like technically FIL's estate was insolvent.

There are rules about dealing with insolvent estates but given the realities of the relationship and the fact that your husband was helping I'd say those are not helpful.

That means you are really left with the moral position that she should give the children their money as it should not have been spent in the first place.