Executors Dillemma..or not?
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Inadilemma
Posts: 67 Forumite
Hi All, after a little advise/wisdom please. So late last year my mum passed away and as her only son I am the executor and main beneficiary of the will.
Bit of history....she was married a couple of times and divorced a couple of times but spent around 20 years with the love of her life who sadly passed away around 10 years ago. This man moved in to my mums flat that she owned and pretty much moved in with a few bags...no real financial input and when he passed away his estate was dealt with.
My late mum’s will states that everything comes to me aside from a property that they bought during their time together which is to be split 50/50 between myself and his 4 children but any IHT on the entire estate is to be taken from their share. The house in question has a sitting tenant who has been there since 1959 and currently 97 years old, the house has been valued at 140K at date of death due to tenant and 200Kish if empty, currently gets around 500 per month rent which i have been paying 50% to other party.
The IHT bill is around £28K so I guess in theory if we go by the stated will then I should offer them £42K (70K less the IHT) and sign the house to myself and stop the 50% monthly payments at an agreed date...or is the nicer option to somehow get the house signed into joint names and draw up an agreement that when it gets sold eventually for 200KISH then they owe me £28K from their share and means they get more money but guess I then have to pay CGT on my share too? The other option is I waive the IHT as its already paid and we sell and go 50/50 but again I guess then i’ve paid IHT and will then be hit for CGT too....bloody taxman!
I don’t want to do them out of any money but if my mums will stated a desire then should I simply just follow the will?
Bit of history....she was married a couple of times and divorced a couple of times but spent around 20 years with the love of her life who sadly passed away around 10 years ago. This man moved in to my mums flat that she owned and pretty much moved in with a few bags...no real financial input and when he passed away his estate was dealt with.
My late mum’s will states that everything comes to me aside from a property that they bought during their time together which is to be split 50/50 between myself and his 4 children but any IHT on the entire estate is to be taken from their share. The house in question has a sitting tenant who has been there since 1959 and currently 97 years old, the house has been valued at 140K at date of death due to tenant and 200Kish if empty, currently gets around 500 per month rent which i have been paying 50% to other party.
The IHT bill is around £28K so I guess in theory if we go by the stated will then I should offer them £42K (70K less the IHT) and sign the house to myself and stop the 50% monthly payments at an agreed date...or is the nicer option to somehow get the house signed into joint names and draw up an agreement that when it gets sold eventually for 200KISH then they owe me £28K from their share and means they get more money but guess I then have to pay CGT on my share too? The other option is I waive the IHT as its already paid and we sell and go 50/50 but again I guess then i’ve paid IHT and will then be hit for CGT too....bloody taxman!
I don’t want to do them out of any money but if my mums will stated a desire then should I simply just follow the will?
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Comments
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Inadilemma wrote: »she spent around 20 years with the love of her life who sadly passed away around 10 years ago.
My late mum’s will states that everything comes to me aside from a property that they bought during their time together which is to be split 50/50 between myself and his 4 children but any IHT on the entire estate is to be taken from their share.
That doesn't seem fair - if the property was bought between them, why should his children's share be reduced by the IHT bill?
I'd pay that out of my share.
Discuss with them how they would like to proceed. Maybe they could buy you out of your half of the property and then you wouldn't have to worry about CGT in the future.0 -
That doesn't seem fair - if the property was bought between them, why should his children's share be reduced by the IHT bill?
I'd pay that out of my share.
Discuss with them how they would like to proceed. Maybe they could buy you out of your half of the property and then you wouldn't have to worry about CGT in the future.
Hence my dilemma, thats what the will states and i have no idea how much he put into the purchased of this property so who knows what’s ‘fair’.
Do you mean they pay me 70K to and I just sign over to them and forget about it?0 -
Inadilemma wrote: »Do you mean they pay me 70K to and I just sign over to them and forget about it?
Yes, instead of you buying them out - although they may prefer the cash from you and let you carry on being the LL.0 -
You will only pay CGT if the house sells for quite a bit more than £140k and you will have your annual CGT allowance plus cost you can deduct before paying CGT at 18% or 28%.
If the house had been vacant there would have been 40% tax on the extra £60k value so paying CGT is a lot cheaper.
Since you mother could have left everything to you if she wanted I don't think you should feel any obligation to pay the IHT out of your share but you may choose to do so or split the IHT bill pro-rata with the assets.
Why not offer them the choice, a cash sum now or retain their share of the property.
If you go for the 2nd option and you want the equivalent of the IHT or some other figure to come out of their share you will probably need some advice on how to achieve that because if you just collect an extra £28k from the disposal proceeds that would normally form part of your sale price for CGT purposes.0 -
I really don't understand why you think strangers have an opinion which is somehow more 'valid' than your mother's very clearly expressed views.
You don't have a dilemma at all: follow the will.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!0 -
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As executor you are responsible for maximising or realising the full value of any assets. This could mean evicting the sitting tenant, if that is possible. Or waiting the older gentleman out, if the other beneficiaries agree to that.
Be very careful anywhere your duties as executor comes into conflict with your role as one of the beneficiaries. You may well find you need to make decisions that are not in your own best interests IYSWIM.Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️0 -
He almost certainly has a protected tenancy and even if he did not anyone with a shred of decency would not evict a 97yr old.As executor you are responsible for maximising or realising the full value of any assets. This could mean evicting the sitting tenant, if that is possible. Or waiting the older gentleman out, if the other beneficiaries agree to that.
Be very careful anywhere your duties as executor comes into conflict with your role as one of the beneficiaries. You may well find you need to make decisions that are not in your own best interests IYSWIM.0 -
He almost certainly has a protected tenancy and even if he did not anyone with a shred of decency would not evict a 97yr old.
My wording allowed for that.
Unfortunately the legal duties of an executor, attorney or deputy do not always dovetail with what seems fair, decent or reasonable.Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️0 -
It might not seem fair but the answer to your question should be "Because that's what the will stipulated".That doesn't seem fair - if the property was bought between them, why should his children's share be reduced by the IHT bill?loose does not rhyme with choose but lose does and is the word you meant to write.0
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