Maintenance costs on a deceased estate

trainride

My dad died several years ago, he had a will trust.  The beneficiaries of this are different to those on the estate of my, now, late mother.
The percentage of the estate going the beneficiaries of those on the will trust are higher than those on the half now relating to my mother's estate.
The beneficiaries on my mother's estate are insisting that all expenses (Council Tax, Energy etc) are split in percentage terms in equal measures to the percentage of the estate that we will eventually inherit.
My understanding is that the percentages only kick in when the all assets are realised and distribution is to occur.
Can anyone provide guidance here?
Many thanks

RAS

What sort of will trust did your father's will create? Immediate Post Death Interest trust allowing your mother to live there until her death?

And with respect to CT and utilities, the creditors expect to be paid out of the estate once probate is granted. Speak to their bereavement departments.

trainride

Many thanks for your prompt reply - much appreciated.
Yes - that is the sort of trust that was created - they were tenants in common.
The utilities are being paid out of estate funds, but the beneficiaries of Mum's estate believe that as a 60% overall beneficiary of the estate, I should be paying 60% of all council tax, utilities, insurance etc until property is sold.  Again, my understanding of the percentages is that they only come into effect on distribution of realised assets.  There is nothing in Dad's Will Trust about the Trust being liable for on-going costs.
Hope that helps?

RAS

Who are the executors?

trainride

The executors on Mum's estate are myself and my sister.  The beneficiaries of Dad's Will Trust are my sister, myself and her three children.  The Trustees of the Trust are myself and a good friend of Dad's.  Sadly, my sister's relationship with her dad and her children is estranged, hence their share of the Will Trust is lower.  Therefore, her 'annoyance' with this is leading her to try and ensure that my advantage of my greater share is equally disadvantaged by having to pay a greater share of maintenance costs.
 

RAS

Who were the executors of dad's will? 

Your sister has a legal duty to complete probate in line with the will(s). She can't just make things up.

Just ring the respective suppliers and the CT and advise that your parents are dead and you need to get probate for both parents. They'll wait for those to be granted.

Suggest to sister that the quickest way to sort things out is to co-operate and DIY. If she doesn't feel able to do that, then it might be better to appoint a solicitor, which will be paid for out of the estate and take a lot longer, because they need to cover their backs by waiting for any inheritance challenges.

By the way, it makes not one jot of difference to whether you end up paying more through paying utilities up front, or whether you pay the amount deducted from the estates, the cost to you will be very similar. But you should both be managing the estate finances transparently, which means collect the assets, deduct the debts and then distribute the remainders in line with the wills.

trainride

We have been paying the utilities from the residual funds in the client account for some time - it is only now that she has raised this issue of the costs for same to be apportioned in line with the percentage inheritance from the total estate.
Probate was granted successfully some time ago.
Sadly, as the time has progressed, she has become less and less communicative and only now brings up this matter of the costs.
It is only the matter of whether she is correct in her assumption on the point she raises.  At the end of the day, I will remain professional at all times and execute my responsibilities as Executor and Trustee without prejudice.

FlorayG

I don't believe that percentages even come into it at this point - bills for the property are paid out of the estate or held until the estate is liquidated, then all creditors are paid off THEN you apportion the remainder according to the will. Until the estate is realised as cash then there is no 'apportionment' surely?
When my mother died she left her estate to me and my sister in very unequal shares (her decision) but the amounts were not given out until all debts were settled. There was no argument over who pays what amount before apportionment ( and I did use a solicitor because I don't speak to my sister)

J63320

Err, if the expenses are paid from the estate, and then what remains is apportioned according to the will, then the reductions in each person’s share will be in the same proportion as the amounts they actually receive - so they will have contributed to the expenses in proportion to the sizes of their inheritances. It’s just maths. Or am I missing something?

FlorayG

J63320 said:

Err, if the expenses are paid from the estate, and then what remains is apportioned according to the will, then the reductions in each person’s share will be in the same proportion as the amounts they actually receive - so they will have contributed to the expenses in proportion to the sizes of their inheritances. It’s just maths. Or am I missing something?

Yes f course you are absolutely correct but the sister is saying that the person getting the larger share should pay MORE of the expenses than her, because they are getting a larger share. Not a legal or mathematical argument

Bigphil1474

I think the complication is that it's two different sized estates paying the estate costs, separate deaths over a few years. It's easy with one estate to solve these issues.

Very messy, and I'm not an expert on trust wills. In principle, if dad died first his estates liabilities would have ceased at some point (presumably mum continued to live in the property etc.?) so in fairness, any current estate costs would be covered by the mums estate as she was bearing the cost before her death? The fairest approach would be to cover the costs equally from both estates until they are all sorted, and all beneficiaries get their share minus the costs from both wills, but if it comes down to it, I'd expect mums estate to bear the larger burden given the time line, which would make your sister worse off? 

Having said that, when I did the whole job on my dad's estate a couple of years ago, the ongoing costs were less than £2k for the entire year it took, which was about 0.5% of his estate - really not worth getting into an argument about. Family can be weird though when there's money involved.