Pecuniary legacy interest payments

GoingUnderground

My father's will left a set amount to my late brother's wife, who lives overseas. We have been trying to pay her the money but she is not returning the necessary papers to my solicitor to confirm identity etc.  I have spoken to her, messaged her and emailed her.  My solicitor has done the same, but for some reason she refuses to engage with us.  My solicitor has told me that we must pay interest on the money due until she claims it, which to my mind is wrong, as it's not that we're the ones delaying payment, she is (and benefitting from it). So my question is, can interest be stopped, legally?  

Keep_pedalling

This is one of the problems in using a solicitor to administer the estate. Do you really need her to prove who she is? 

flaneurs_lobster

Are you paying the interest? Just put the amount in an interest paying account, why would you want to stop this cash earning interest?

poseidon1

GoingUnderground said:

My father's will left a set amount to my late brother's wife, who lives overseas. We have been trying to pay her the money but she is not returning the necessary papers to my solicitor to confirm identity etc.  I have spoken to her, messaged her and emailed her.  My solicitor has done the same, but for some reason she refuses to engage with us.  My solicitor has told me that we must pay interest on the money due until she claims it, which to my mind is wrong, as it's not that we're the ones delaying payment, she is (and benefitting from it). So my question is, can interest be stopped, legally?  

The following article sets out the strict legal position pertaining to the circumstances where fixed pecuniary legacies should accrue simple interest at  specific statutory interest rates. I believe the rigour of this provision will come as a significant  surprise to all DIY executors -

https://www.thegazette.co.uk/all-notices/content/104327#:~:text=Is statutory interest payable on,until the legacy is paid.

The problem with this requirement in the 'real world' is

1)  Finding a bank that will set up an executors savings account accruing a reasonable rate of interest.

2) If the legacy cash is held on a solicitors client account, those arrangements only pay low rates of interest attributable to business accounts

3) As the interest is taxable  It appears the executors are required to account for  and pay basic rate tax on the interest prior to remitting to the legatee.


The rules related to interest being chargeable presuppose that executors were responsible for the delay beyond the 1 year required for legacy  payment.

 In OP's case it appears delay is due to the intransigence of the beneficiary in refusing to provide relevant proof of ID etc, but as the rules stand that does not appear to be a reason not to apply interest until payment.

Finally to add insult to injury, if executors cannot find a deposit account accruing interest at the current statutory rate ( see the table in The Gazette article), the interest either diminishes estate residue if residue has not yet been fully distributed or worse case scenario the executors find themselves personally liable.

Hopefully, the pecuniary  legacy in question is a low 4 figure sum so that simple interest accruing is relatively modest, but all in all a real pain in the rear.

GoingUnderground

Thanks Poseidon.  Id seen that Gazette page and I fully understand that interest payments are designed to stop executors delaying payment of pecuniary legacys.  What grates is that i have been trying to get this settled for 8 months, since probate was granted.  The issue of ID has been raised as my father referred to her using our surname, rather than hers, which she legally kept after marriage.  We have asked her to sign a form stating that she is the person referred to but for some reason she won't engage.  I don't have much of a relationship with her as she and my brother lived abroad and didnt visit the uk. My solicitor will pay but wants me to sign a disclaimer saying that I'll be responsible should any issue arise (claim of non payment, etc.).  I'm not sure i want to do this, but maybe it's the only way.  The sum is a fairly low 4 figure sum, so its not breaking the bank to pay the interest but it just seems unjust.  poseidon1 said:

GoingUnderground said:

My father's will left a set amount to my late brother's wife, who lives overseas. We have been trying to pay her the money but she is not returning the necessary papers to my solicitor to confirm identity etc.  I have spoken to her, messaged her and emailed her.  My solicitor has done the same, but for some reason she refuses to engage with us.  My solicitor has told me that we must pay interest on the money due until she claims it, which to my mind is wrong, as it's not that we're the ones delaying payment, she is (and benefitting from it). So my question is, can interest be stopped, legally?  

The following article sets out the strict legal position pertaining to the circumstances where fixed pecuniary legacies should accrue simple interest at  specific statutory interest rates. I believe the rigour of this provision will come as a significant  surprise to all DIY executors.

The problem with this requirement in the 'real world' is

1)  Finding a bank that will set up an executors savings account accruing a reasonable rate of interest.

2) If the legacy cash is held on a solicitors client account, those arrangements only pay low rates of interest attributable to business accounts

3) As the interest is taxable  It appears the executors are required to account for  and pay basic rate tax on the interest prior to remitting to the legatee.


The rules related to interest being chargeable presuppose that executors were responsible for the delay beyond the 1 year required for legacy  payment.

 In OP's case it appears delay is due to the intransigence of the beneficiary in refusing to provide relevant proof of ID etc, but as the rules stand that does not appear to be a reason not to apply interest until payment.

Finally to add insult to injury, if executors cannot find a deposit account accruing interest at the current statutory rate ( see the table in The Gazette article), the interest either diminishes estate residue if residue has not yet been fully distributed or worse case scenario the executors find themselves personally liable.

Hopefully, the pecuniary  legacy in question is a low 4 figure sum so that simple interest accruing is relatively modest, but all in all a real pain in the rear.

poseidon1

You have my commiserations,  the human capacity for wholly irrational behaviour often baffles me. An executor's job can be hard enough without having to put up with this kind of nonsense.