Using estate funds to sell a property - conflicting advice

tigertrio

I took some legal advice from a solicitor and they have stated that under the Administration of Estates Act 1925, the executer can sell a property and use funds of the estate to sell the property - estate agent fees etc.

This is contradictory to advice received on this board. I understand that advice on here is not official legal advice, and I am very grateful for the advice being given, I really think it's helpful and I want to respect the people who are giving it to me - for free!

I'm just confused, as multiple people have told me that if a house is left in a will then the costs of selling the house must be paid by the beneficiaries of the house and the costs cant be taken from estate funds.

For background a Will leaves a house to certain people, and residual funds after expenses, funeral, debts etc to another set of people.

So - I don't know who to believe, multiple people have told me one thing and a solictor has told me another - help!

Hoenir

tigertrio said:

I'm just confused, as multiple people have told me that if a house is left in a will then the costs of selling the house must be paid by the beneficiaries of the house and the costs cant be taken from estate funds.

If the asset such as a property is specfically left in a will to a beneficiary. Then yes the beneficiary should bear the costs of selling the property if they so decide to do so. Be the same if a beneficiary were left say a painting, classic car or piece of jewellery. 

If the asset simply forms part of the deceased's estate. Then yes. Costs incurred in liquidatating will be borne by the Estate prior to distribution to the beneficiaries. 

The wording of the will is paramount. 

p00hsticks

The scenario you have described in previous posts is not the common one where a will instructs the executors to sell property, liquidate assets and then distribute the total proceeds of all assets among a set of beneficiaries. If it were, then it would be perfectly ok for the executor to use other assets to pay for the house sale rather than it be taken directly from the sale of the house as the end result would be exactly the same for all beneficiaries. 

But in your rather unusual case, you have told us that the will specifically says that one set of beneficiaries A are to inherit the house, and all other assets are to be divided between another set of beneficiaries B. In such a case then I believe that the executors should just transfer the house over to beneficiaries A and if and when they then wish to sell it they should pay the estate agent fees etc themselves - if the expenses are taken out of the estate then it is unfairly and incorrectly reducing the amount that beneficiaries B will inherit. 

I'm not an expert, but I'd suggest that the solicitor you asked misinterpreted your question as relating to the more common scenario and not the one you have. Did you actually give them sight of the will in question ?  

tigertrio

Hoenir said:

tigertrio said:

I'm just confused, as multiple people have told me that if a house is left in a will then the costs of selling the house must be paid by the beneficiaries of the house and the costs cant be taken from estate funds.

If the asset such as a property is specfically left in a will to a beneficiary. Then yes the beneficiary should bear the costs of selling the property if they so decide to do so. Be the same if a beneficiary were left say a painting, classic car or piece of jewellery. 

If the asset simply forms part of the deceased's estate. Then yes. Costs incurred in liquidatating will be borne by the Estate prior to distribution to the beneficiaries. 

The wording of the will is paramount. 

The asset (house) was left to certain beneficiaries - but i thought the Administration of Estates Act 1925 allowed the executor to sell the property? 

Hoenir

tigertrio said:

Hoenir said:

tigertrio said:

I'm just confused, as multiple people have told me that if a house is left in a will then the costs of selling the house must be paid by the beneficiaries of the house and the costs cant be taken from estate funds.

If the asset such as a property is specfically left in a will to a beneficiary. Then yes the beneficiary should bear the costs of selling the property if they so decide to do so. Be the same if a beneficiary were left say a painting, classic car or piece of jewellery. 

If the asset simply forms part of the deceased's estate. Then yes. Costs incurred in liquidatating will be borne by the Estate prior to distribution to the beneficiaries. 

The wording of the will is paramount. 

The asset (house) was left to certain beneficiaries - but i thought the Administration of Estates Act 1925 allowed the executor to sell the property? 

If the beneficiaries don't want the property (i.e. transferred into their names) then yes. The executor has the powers to sell it. As it's still within the Estate. Instead receive the proceeds. 

tigertrio

p00hsticks said:

The scenario you have described in previous posts is not the common one where a will instructs the executors to sell property, liquidate assets and then distribute the total proceeds of all assets among a set of beneficiaries. If it were, then it would be perfectly ok for the executor to use other assets to pay for the house sale rather than it be taken directly from the sale of the house as the end result would be exactly the same for all beneficiaries. 

But in your rather unusual case, you have told us that the will specifically says that one set of beneficiaries A are to inherit the house, and all other assets are to be divided between another set of beneficiaries B. In such a case then I believe that the executors should just transfer the house over to beneficiaries A and if and when they then wish to sell it they should pay the estate agent fees etc themselves - if the expenses are taken out of the estate then it is unfairly and incorrectly reducing the amount that beneficiaries B will inherit. 

I'm not an expert, but I'd suggest that the solicitor you asked misinterpreted your question as relating to the more common scenario and not the one you have. Did you actually give them sight of the will in question ?  

Thanks again for your input. To clarify a set of people get the house, and any residual funds from bank accounts, sale of a car etc. go to residual funds which are then dispersed between another set of people.

tigertrio

I have some more clarity now...

When a will leaves a property to several beneficiaries without explicitly mentioning selling it, the executor still has authority to sell the property and cover the selling costs from the estate for these key reasons:

1. Practical necessity: When multiple beneficiaries inherit a single property, physical division is impossible. Unlike your example with model cars (which can be physically handed over to one person), a property often needs to be sold to fulfill the will's intention of benefiting multiple people equally.
2. Legal authority: Under UK law, executors have implied powers to sell property to fulfill their duties. Section 39 of the Administration of Estates Act 1925 gives executors the power to sell property for the purpose of administration, even when not explicitly authorised in the will.
3. Executor's duties: The executor has a fiduciary duty to distribute assets according to the will's intentions. When multiple beneficiaries are entitled to shares of a property, selling it and distributing the proceeds often represents the most practical way to fulfill this duty.
4. Distinction from personal chattels: Your comparison to other items is relevant but different because:
   • Personal items like paintings can be physically given to their named beneficiary
   • The named beneficiary can then choose whether to keep or sell them
   • Any selling costs would be their personal expense
5. Beneficiary agreement: If all property beneficiaries agreed to sell (rather than co-own the property), the selling costs are typically considered a necessary expense of administering that part of the estate.

p00hsticks

How many beneficiaries were left the house ?

tigertrio

p00hsticks said:

How many beneficiaries were left the house ?

5 people...

Person A: 33.34% Person B: 16.67% Person C: 16.67% Person D: 16.67% Person E: 16.67%

p00hsticks

tigertrio said:

Hoenir said:

tigertrio said:

I'm just confused, as multiple people have told me that if a house is left in a will then the costs of selling the house must be paid by the beneficiaries of the house and the costs cant be taken from estate funds.

If the asset such as a property is specfically left in a will to a beneficiary. Then yes the beneficiary should bear the costs of selling the property if they so decide to do so. Be the same if a beneficiary were left say a painting, classic car or piece of jewellery. 

If the asset simply forms part of the deceased's estate. Then yes. Costs incurred in liquidatating will be borne by the Estate prior to distribution to the beneficiaries. 

The wording of the will is paramount. 

The asset (house) was left to certain beneficiaries - but i thought the Administration of Estates Act 1925 allowed the executor to sell the property? 

I thoguh the issue was not whether the executor had the authority to sell the property (following the instructions of the beneficiaries), but rather who pays the selling costs ? And I'd argue that with the will written as it is it should specifically  deducted from the house proceeds (and last time I sold a house as executor, the conveyancer both deducted their own fees and paid the estate agent before sending the remaining proceeds to me, so the point may be moot anyhow)...

tigertrio

p00hsticks said:

tigertrio said:

Hoenir said:

tigertrio said:

I'm just confused, as multiple people have told me that if a house is left in a will then the costs of selling the house must be paid by the beneficiaries of the house and the costs cant be taken from estate funds.

If the asset such as a property is specfically left in a will to a beneficiary. Then yes the beneficiary should bear the costs of selling the property if they so decide to do so. Be the same if a beneficiary were left say a painting, classic car or piece of jewellery. 

If the asset simply forms part of the deceased's estate. Then yes. Costs incurred in liquidatating will be borne by the Estate prior to distribution to the beneficiaries. 

The wording of the will is paramount. 

The asset (house) was left to certain beneficiaries - but i thought the Administration of Estates Act 1925 allowed the executor to sell the property? 

I thoguh the issue was not whether the executor had the authority to sell the property (following the instructions of the beneficiaries), but rather who pays the selling costs ? And I'd argue that with the will written as it is it should specifically  deducted from the house proceeds (and last time I sold a house as executor, the conveyancer both deducted their own fees and paid the estate agent before sending the remaining proceeds to me, so the point may be moot anyhow)...

The issue revolves around who pays the costs to sell the property, Persons A-E who are inheriting the property? The will states no mention of selling it.

Or the other set of people, Persons X, Y and Z who are to inherit residual funds from the sale of the car and whatever was in the bank accounts, after funeral and other testamentary expenses have been paid.