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

doodling

Hi,

This is all a little messy.

FIL should not have spent the money for the grandchildren.  When he died, as the administration of the estate was not compete then MIL steps into his shoes.  She is not responsible for the loss of the money but is responsible for recovering it as best she can.

MIL now has a conflict of interest.  Her role as executor of his eatate, and hence FIL's mother's estate (executors roles are inheritable from executor to executor) should mean that she should be looking to realise any assets of FIL's that might be accessible - that should include consideration of whether the equity in the jointly owned house can be pursued through the courts (it is legally possible).  On the other hand, as beneficiary of FILs estate and now sole owner of the jointly owned house she has an interest in that not happening.

Overall, there is nothing to stop the children suing MIL for the money they are due.  The fact that his estate was insolvent or nearly so is irrelevant as his share of the jointly owned house was potentially available and she should have pursued that so it is her failing as executor of FILs mother's estate (for not pursuing herself for the money) that will render her liable.

I suspect that the children have six years from when the bequest became payable to claim.  I suspect that a judge probably won't allow her grandchildren to sell her house from under her but to my mind the failure to deal with it as part of the execution of FIL's estate would be an aggravating factor.  My bet is that if the grandchildren pursued it then MIL would end up with a charge against the house which would mean that the grandchildren get their money when it is eventually sold, perhaps when MIL passes away.

I am not a lawyer so recommend that MIL (or the grandchildren) takes legal advice.

bubs3110

Messy indeed. I am hopeful she will do the right thing, especially if she believes the grandkids could make a claim. However I didn't want to tell her this in case it were untrue. Whilst she may not be  cluedd up she may speak to someone out of worry who is, so I wanted to be sure of my facts. 

The wording on FILs mother's will was each grand kid wouldn't receive the funds until they were21, he probably assumed he had timet to rectify the issue he had caused, sadly he passed quite suddenly.


I will now go armed with the knowledge provided and nudge her to do theright thing. 

Thank you all for your advice, it is greatly appreciated during this difficult time. 

RAS

Regardless of what FIL's mother said in her will, it is extremely difficult to prevent beneficiaries accessing their inheritance immediately after their 18th birthday.

TBagpuss

bubs3110 said:

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?

As executor she is personally liable if she fails to admisniter the estate correctly, so yes. Ideally, FIL would have had the funds in a sepearate account so that it was clear that that was the trust money, not his personal funds, but assuming that there is sifficuient in his estate to covver what is owed then your MIL is responsible for accounting propery to all creditors, which includ the children as they each come of age.

That said, it's complicated by th fact thaat some assets, such as th payments from the pensions, don't form part of the estate, and neithr doesthe house if they owned as joint tenants, so it may be that there isn't sufficient in hs actual estate (e.fg. the bank accoutns and car ) to cover all the debts, including the debt to the beneficiary children.

Will MIL have suffficientto meet her own needs? If so, it seems strnage that she would be prepared to allow her own grandchildnre to be deptrived of their inheritancce, even though it is her husband who was at fault 

poseidon1

RAS said:

Regardless of what FIL's mother said in her will, it is extremely difficult to prevent beneficiaries accessing their inheritance immediately after their 18th birthday.

Not difficult at all with a professionally drafted will ( emphasis  on 'professionally' ), and even wills by the untutored manage to achieve this accidentally. Eg ' legacies to my grandchildren in equal shares if they survive to age 21' 

bubs3110

MIL has agreed to replace the money!! Yay!

This was the better outcome, rather than the threat of legal action, as for sure at least 2 of her children would have come after the house on their children's behalf. 

We've had advised to put a lump sum for the first grandchild in a high interest saver ( well as high as she can get)

The other 2 she has sufficient time to replace the funds over a longer period, so she wont notice the "loss"

Her sons, my husband and one of his brothers, are helping her with manage her finances and sorting out what income she will have, so they will able to monitor the situation