Strange Clause in Will !

loiner

https://forums.moneysavingexpert.com/discussion/comment/82170998#Comment_82170998

There would be enough cash in her inheritance to facilitate the purchase.

I'm visiting her shortly to ensure she is aware of the costs involved.

loiner

https://forums.moneysavingexpert.com/discussion/comment/82171006#Comment_82171006

My sister is nowhere near that level of thinking. You wouldn't believe the delays and complications she caused during her last, very simple, house move.

loiner

https://forums.moneysavingexpert.com/discussion/comment/82171121#Comment_82171121

Good points. I checked Stamp Duty on a 2nd home of that value and it is around £10K. I certainly will be bothering to mention it to her. Her profit is rapidly diminishing.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82171417#Comment_82171417

That would only be the case if you were planning to make substantial interim cash distributions from the estate in the period prior to the granting and eventual excercise of the option, therefore excluding the house sale proceeds.

Did your father leave cash of that magnitude? If yes would such an interim distribution ( to all beneficiaries) leave you with sufficient residual cash to deal with any CGT exposure on the property sale?

I don't see you are under a duty to artificially accelerate the administration of the estate in such a way that you provide your sister with the necessary cash ( from the estate) to facilitate her purchase. Her entitlement is to residue after you have ascertained and dealt with all imaginable third party estate creditors. You can then prudently consider interim distributions on account of residue, recognising the fact that if you over distribute you leave yourself personally exposed to any creditors that come out of the woodwork.

I appreciate that you maybe handling this whole matter on a DIY basis, but I suspect you will need professional help with drafting of the option agreement and its aftermath, so get advice on the matters you should also be addressing such as The Gazette advertising for creditors and the statutory period to await an outcome.

https://www.clarkewillmott.com/insights/executors-why-you-should-advertise-for-creditors/

As you say this is your first time dealing with an estate, and your father has not made this straightforward, so best to take no shortcuts and do everything by the book.

loiner

https://forums.moneysavingexpert.com/discussion/comment/82171537#Comment_82171537

Thanks for the link. Our father lived in poverty with the assets of a king - richest body in the graveyard syndrome. I won't distribute funds just yet to ensure sister has to find the £100K herself.

I appreciate I'll need to take professional help if she exercises her option. I'm meeting her in the next few days so I'll get a better idea of her latest thoughts.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82171556#Comment_82171556

She cannot excercise an option you have not yet granted. I thought my post was clear on the chronology of events here?

All you will get from a meeting with your sister are her intentions as to what she is likely to do once you serve her with the option which you can't do until you get probate.

As to what she will actually do after you grant the option is a whole other matter, you indicate she is not very organised so she should be legally represented on her side of the agreement, and you should already be talking to a lawyer on drafting the contents of the option unless you (unwisely) think you have the competency to do it yourself.

The two of you talking to each other in ignorance of the legal niceties needed to push things along is unhelpful.

As regards probate itself how far have you actually progressed with this? No probate, no basis to issue the option.

Grumpy_chap

The OP needs to be aware of their duties and obligations as Executor.

It is not for the Executor to interpret the Will or administer the Estate in a manner that is favourable to the OP. It is the duty of the Executor to administer the Estate in an independent manner.

This means that any steps that frustrate the Sister in exercising her option would not be permitted. This includes matters such as "I won't distribute funds just yet to ensure sister has to find the £100K herself". If there are sufficient funds other than the property that stand to be inherited by the Sister, then if the Sister choses to exercise the option, any professional legal advisor that the Sister might engage to support herself in the process of the property acquisition would probably be able to ensure that the payment to exercise the option was funded by the relevant proportion of the "remainderman" Estate.

I note the OP seems not to have commented on the size of the overall Estate or whether the potential £90k that the Sister might stand to make from exercising the option is actually significant in the overall scheme of things and worth the potential family feud. Given the £90k would be split three-ways if the option is not exercised, then the potential loss to any individual is only £30k. From a large Estate that might not be considered a substantial proportion.

Also, is the Estate subject to IHT? If so, and the option is not exercised, the extra £90k that increases the value of the Estate will be immediately reduced by 40%. AIUI.

Dead_keen

Also, is the Estate subject to IHT? If so, and the option is not exercised, the extra £90k that increases the value of the Estate will be immediately reduced by 40%. AIUI.

That's not right. The value of the estate is based on the value on death and so you would just take in the normal market value of the property on death to work out the IHT. The option to be granted by the executor does not reduce the value of the estate. That would be different if the option was granted by the dad and continued to subsist after death.

loiner

Thanks to everyone who has assisted and contributed to this thread. Sadly, the issue has now become irrelevant due to my sister's advanced terminal health diagnosis.

Jemma01

https://forums.moneysavingexpert.com/discussion/comment/82174376#Comment_82174376

Oh no, I’m so sorry to hear that. I hope miracles happen and things take a turn for the better 😢