Will Disbursement Questions - Money Used to Renovate/Estate Agent Fees

tigertrio

A Will I am benefiting from divides the deceased assets with the property going to one set of beneficiaries and the remaining cash (residual funds) going to another set of beneficiaries.

I would be grateful for some advice on the following.

For ease, let’s refer to the property as 10 King Street.

1 . The Will gives 10 King Street to certain beneficiaries. The Will then goes on to state the following:

GIVE DEVISE AND BEQUEATH all my property whatsoever and wheresoever not hereby otherwise disposed of (including both entailed and all other property over which I shall have any power of disposition by Will) subject to and after the payment of my funeral and testamentary expenses and debts and all duties and taxes payable on or by reason of my death in respect of my estate or any part thereof (or any gift made by me during my lifetime or the property for the time being representing the same are referred to below as "my residuary estate") to my Trustees UPON TRUST to sell the same or any part thereof or to retain the same or any part thereof in its actual state of investment or condition at the time of my death without being liable for Loss.

So the property - 10 King Street would have already been disposed of earlier in the will - “wheresoever not hereby otherwise disposed of”. However, does the clause above mean that the estate agent fees should be payable from the sale of 10 Kings Street, or should the estate agent fees come from the residual funds. For example, 10 Kings Street sold for £300K, £5K fees, do the house beneficiaries receive £300K or £295K? The will does not state that the property should be sold either, it is just supposed to be given to certain beneficiaries, surely it is those beneficiaries who should brunt the cost of any disposal costs?

2. 10 Kings Street has been renovated with new carpets, an electric fireplace has been taken out, and there has been new light fittings and other minor improvements. The cost of these has been taken from residual funds. The will states: 

My TRUSTEES shall have power to invest trust monies (irrespective of whether any income is thereby produced) and to vary investments in the same full and unrestricted manner in all respects as if they were absolutely entitled thereto beneficially and I DECLARE that the retention or purchase at any time and from time to time of any freehold or leasehold property or any interest or share therein of whatever nature proportion or amount (which shall be held upon trust to retain or sell the same) as a residence for any beneficiary is an authorised investment and in the event of any such retention or purchase my Trustees shall have power to apply trust monies in the erection alteration improvement or repair of any building as aforesaid including one where there is any such share or interest and I DECLARE that my Trustees shall have power to decide according to the circumstances generally) the terms and conditions in every respect upon which any such person or persons may occupy and reside in any such property (or have the benefit of the said share or interest therein)

Does “of any building as aforesaid” include 10 Kings Street, or does this just refer to the fact that an investment can be made into more properties? If that is the case then I presume residual funds cannot be used to renovate 10 Kings Street?

Alternatively, if it does mean that residual funds can be used to renovate 10 Kings Street, does “my Trustees shall have power to apply trust monies in the erection alteration improvement or repair of any building” only include the building, maintaining the garden, and putting new carpets (fixture and fittings) would not be covered?

3. Skip hire and house clearance costs. The property 10 Kings Street, was given to certain beneficiaries, along with it’s contents. Surely it is those beneficiaries who should brunt the cost of dealing the the asset and clearing it out, and not the residual funds? Or does the following statement in the will cover it:?

GIVE DEVISE AND BEQUEATH all my property whatsoever and wheresoever not hereby otherwise disposed of (including both entailed and all other property over which I shall have any power of disposition by Will) subject to and after the payment of my funeral and testamentary expenses and debts and all duties and taxes payable on or by reason of my death in respect of my estate or any part thereof

4. Ongoing costs. The estate has taken over two years to settle, residual funds were held on to whilst the trustee sold 10 Kings Street. It’s reasonable to assume that certain costs such as energy, water, and council tax should be paid from residual funds whilst probate is ongoing, but the residual funds have been used to cover all these costs whilst 10 Kings Street is being sold. Is this okay?

5. Interest. The residual funds were not placed in a high interest account and have only gathered a minimal amount of interest - £150. Should this be dispersed as residual funds? Am I able to claim mismanagement of the estate? Although does this clause negate it:

My TRUSTEES shall have power to invest trust monies (irrespective of whether any income is thereby produced)

Residual funds were held on to for so long with no reason, after probate was finished could I argue that they should have been dispersed? During probate the trustee could argue it’s down to them to invest (or not invest). As residual funds were held back for over another year could I claim that I could have received them and earned my own interest?

6. Do any of these clauses negate any of the above issues:

I DECLARE that in addition to all other powers conferred by law or under this my Will my Trustees shall have power so long as any beneficiary has a life or contingent interest in any property to raise capital out of such property and pay the same to or for the benefit of such beneficiary andlor to loan the same to such beneficiary with or without interest andlor security and generally upon such terms as my Trustees shall think fit and I DECLARE that my Trustees shall not be liable for any loss suffered as a result of such action and shall disregard the interests of any other beneficiaries in the property

MY TRUSTEES may exercise the power of appropriation given them by Section 41 of the Administration of Estates Act 1925 without obtaining any other consent required by that Section and even though one or more of them may be beneficially interested

I DECLARE that section 33 of the Wills Act 1837 and sections 11 and 19 of the Trusts of Land and Appointment of Trustees Act 1996 shall be excluded in this Will and in any trusts arising under it.

p00hsticks

I was going to say that there was a previous recent thread on this very subject, but then realised that it was actually from the OP - presumably they have since had sight of the will and so can add more detail. 
House in will, using estate cash to improve? — MoneySavingExpert Forum

AS I think I said there, my (non-expert) opinion is that if the named property was specifically left to certain beneficiaries then neither the improvement or selling costs should come out of the estate, it should just be transferred into the names of those beneficiaries as soon as probate has been obtained and it's then up to them to  do what they want with it. 

As an aside for others - it's almost always a bad idea to name a specific property in a will. If the deceased had moved from '10 king street' elsewhere, or had had to go in care and sell it, and had failed or been unable to update the will due to lack of capcity, the consequence would be that what they intended when initially writing the will was not at all in line with what actually happened by the time it was executed. 

tigertrio

p00hsticks said:

I was going to say that there was a previous recent thread on this very subject, but then realised that it was actually from the OP - presumably they have since had sight of the will and so can add more detail. 
House in will, using estate cash to improve? — MoneySavingExpert Forum

As an aside for others - it's almost always a bad idea to name a specific property in a will. If the deceased had moved from '10 king street' elsewhere, or had had to go in care and sell it, and had failed or been unable to update the will due to lack of capcity, the consequence would be that what they intended when initially writing the will was not at all in line with what actually happened by the time it was executed. 

Yes I have since been able to supply more information. i would be grateful for advice on any points.

Alderbank

tigertrio said:

So the property - 10 King Street would have already been disposed of earlier in the will - “wheresoever not hereby otherwise disposed of”. However, does the clause above mean that the estate agent fees should be payable from the sale of 10 Kings Street, or should the estate agent fees come from the residual funds. For example, 10 Kings Street sold for £300K, £5K fees, do the house beneficiaries receive £300K or £295K? The will does not state that the property should be sold either, it is just supposed to be given to certain beneficiaries, surely it is those beneficiaries who should brunt the cost of any disposal costs?

As far as administration of the will goes, no money changes hands.

The will specified whether shared ownership will be joint tenants or tenants in common. Once the administrator has probate they use a form called an Assent to tell the Land Registry who the new owners are and what proportion each owns.

No estate agent or fees involved. After transfer it is entirely up to the new owners what they do with their shared property.

The beneficiaries can ask the administrator to sell the house on their behalf (and at their expense) rather than transfer ownership and they will just receive the funds left from the sale after estate agent costs, conveyancing costs, any repairs or improvements, etc. If so, that transaction is between the parties involved only and is separate from the will.

tigertrio

Alderbank said:

tigertrio said:

So the property - 10 King Street would have already been disposed of earlier in the will - “wheresoever not hereby otherwise disposed of”. However, does the clause above mean that the estate agent fees should be payable from the sale of 10 Kings Street, or should the estate agent fees come from the residual funds. For example, 10 Kings Street sold for £300K, £5K fees, do the house beneficiaries receive £300K or £295K? The will does not state that the property should be sold either, it is just supposed to be given to certain beneficiaries, surely it is those beneficiaries who should brunt the cost of any disposal costs?

As far as administration of the will goes, no money changes hands.

The will specified whether shared ownership will be joint tenants or tenants in common. Once the administrator has probate they use a form called an Assent to tell the Land Registry who the new owners are and what proportion each owns.

No estate agent or fees involved. After transfer it is entirely up to the new owners what they do with their shared property.

The beneficiaries can ask the administrator to sell the house on their behalf (and at their expense) rather than transfer ownership and they will just receive the funds left from the sale after estate agent costs, conveyancing costs, any repairs or improvements, etc. If so, that transaction is between the parties involved only and is separate from the will.

So what your saying is that residual funds should not be used to pay estate agent fees? The property was not transferred to new owner, it was retained in the estate until it was sold - took over two years to sell.

p00hsticks

tigertrio said:

Alderbank said:

tigertrio said:

So the property - 10 King Street would have already been disposed of earlier in the will - “wheresoever not hereby otherwise disposed of”. However, does the clause above mean that the estate agent fees should be payable from the sale of 10 Kings Street, or should the estate agent fees come from the residual funds. For example, 10 Kings Street sold for £300K, £5K fees, do the house beneficiaries receive £300K or £295K? The will does not state that the property should be sold either, it is just supposed to be given to certain beneficiaries, surely it is those beneficiaries who should brunt the cost of any disposal costs?

As far as administration of the will goes, no money changes hands.

The will specified whether shared ownership will be joint tenants or tenants in common. Once the administrator has probate they use a form called an Assent to tell the Land Registry who the new owners are and what proportion each owns.

No estate agent or fees involved. After transfer it is entirely up to the new owners what they do with their shared property.

The beneficiaries can ask the administrator to sell the house on their behalf (and at their expense) rather than transfer ownership and they will just receive the funds left from the sale after estate agent costs, conveyancing costs, any repairs or improvements, etc. If so, that transaction is between the parties involved only and is separate from the will.

So what your saying is that residual funds should not be used to pay estate agent fees? The property was not transferred to new owner, it was retained in the estate until it was sold - took over two years to sell.

Yes, if the estate sells it then the estate agent fees and any other costs taken from the estate to improve the property should be deducted from te proceeds of the sale before passing on to whoever inherited the house.