Executor's out of pocket expenses

Tara*_2 · 20 July 2014 at 2:26PM

Hello,

I have done my own initial research on this and unfortunately I am still non the wiser on the role of executor. What is deemed reasonable out of pocket expenses and do they have to provide evidence of it? I am hoping for someone that has experienced this or knows the law to help me have a better understanding before I seek legal advice next week (appointment is on Thursday)

Background: My grandmothers estate took a long time to be finalised (nearly 4 years) and the beneficiaries have received their equal amounts of the estate. The executor had to deal with a lot of rubbish (from what I understand) so I am appreciative to her for that. She also cared for my grandmother so received a substantial amount more (from the bank account) which again I have no problem with.

I asked whether a statement of accounts would be sent alongside the cheque, this was just a general question based on the limited information I have on how probate work. She took great offence to this and I apologised, I was not trying to accuse her of anything. Anyway the accounts sent by the solictor are a poor standard to me, there is no inventory, no dates and basically not transparent so I have nothing to compare it with. The majority of the account details the expenses i.e council tax, utility bill. which is fine however there are a lot of out of pocket expenses. I calculate this to be £7,500 which is more than the solicitor cost!!! There is no detail on what the out of pocket expenses relates to. Can I question this?

Another concern is that the solicitor appears to have applied VAT three times on their fee. Once on the full amount, another on the interim amount and then another on the final amount. That's at £600 a pop. I don't like confrontation, this is money I never had and I have no sense of entitlement, but something doesn't add up.

Please offer any advice in the interim of my legal advice, just so that I have a better understanding. These situations are always sensitive and I have no intentions of accusing anyone, it is just not clear to me and when I last asked questions which I thought were reasonable I upset the executor.

Tara*_2 · 20 July 2014 at 2:33PM

Just to be clear and if it helps; the estate was not liable for inheritance tax. It was a small and straight forward estate with the exception of how long it took to sell the property.

g6jns_2 · 20 July 2014 at 2:52PM

Tara* wrote: »

Just to be clear and if it helps; the estate was not liable for inheritance tax. It was a small and straight forward estate with the exception of how long it took to sell the property.

An executor can claim actual expenses reasonably incurred. It is not unknown for executors to cheat. All expenses should be accompanied by receipts. If the executor can't/won't provide them then I would raise it with the solicitor. Accurate accounts should be available to beneficiaries. £7,500 sounds like a rip off. You should also query the VAT issue. Don't be put off by the executor objecting. An honest executor should be quite happy to provide the information. Don't let them fob you off.

Tara*_2 · 20 July 2014 at 3:23PM

Yes I understand there would be out of pocket of expenses perhaps for the estate agent and the solicitors interim payment but it still doesn't add up, and we have paid for the solicitors payment out of the estate so again I am confused. I agree that everything should be transparent, not because I think she is dishonest, just because we all have the right to know where the legacy has gone. Thanks again.

PippiShortsock · 20 July 2014 at 3:56PM

I'm the executor for my late relative and the case has dragged on for over 18 months now. My out-of-pocket expenses are standing at around £3k - this includes the wake, memorial plaque, hotel accommodation and mileage (he lived 100 miles from me), vacant building insurance, gardener, household contents valuation, first instalment towards conveyancing, house clearance, post redirection and small amounts for stationery and postage. I provided my solicitor with receipts for all these items except for the mileage.

My solicitor has drawn up estate accounts which will be sent to all the beneficiaries and they include details of all my expenses, those incurred by the solicitor, as well as his fees and the amounts realised from the sale/redemption of each of the estate assets. There is no inventory of household goods as the valuation was very low for the whole contents and there were no single items of value.

I hope this helps to suggest the sort of expenses the executor in your case may have legitimately incurred. I think you are entirely within your rights to see a detailed breakdown.

Tara*_2 · 20 July 2014 at 4:50PM

Yes I appreciate she would incur costs up front, my grandmother paid for her funeral herself so there was nothing to be paid for in that respect.

Also, the bills that I expect may have cost the executor are listed in the accounts. I think the general consensus is that I have a right to ask for clarification and evidence if it comes to it.

Thanks again.

Mojisola · 20 July 2014 at 4:56PM

PippiShortsock wrote: »

I'm the executor for my late relative and the case has dragged on for over 18 months now. My out-of-pocket expenses are standing at around £3k - this includes the wake, memorial plaque, hotel accommodation and mileage (he lived 100 miles from me), vacant building insurance, gardener, household contents valuation, first instalment towards conveyancing, house clearance, post redirection and small amounts for stationery and postage. I provided my solicitor with receipts for all these items except for the mileage.

I didn't count any of those things as executor expenses and didn't list them as such. Anything like that I paid was reimbursed from the estate and listed individually on the estate accounts.

"Expenses" were only things like phone calls, postage and mileage.

Crabapple · 20 July 2014 at 6:04PM

If a Solicitor has prepared these accounts they should be explaining them as well.

Just putting a figure of £7500 isn't good enough in my opinion, I would expect it to be broken down so you can see if it is reasonable. It sounds like an awful lot of money and I struggle to see how it could be incurred in postage/telephone calls/travelling.

Where expenses are large it should be run by the beneficiaries too. For example I have seen largish claims for travelling where the executors were not local and this was explained before distribution. Loss of earnings might also be considered, but again should be discussed. There may be many ways of minimising such a huge claim on the Estate.

I'd go back to the Solicitor first to be honest, rather than to the executor herself, and ask them to explain. They've been paid to produce an account and should be able to explain it to you. Although to be honest, if it was done well it shouldn't need those kind of explanations!

getmore4less · 20 July 2014 at 9:35PM

Loss of earning would be very dubious that would be getting paid for the job which is not allowed.

Expenses need a breakdown and justification for everything, single items that cost a lot should be itemised, low cost but many like mileage and postage need details.

if expenses were £50 I would let it go but over that I would be wanting a breakdown and receipts to back up most of it.

Tara*_2 · 31 July 2014 at 9:20PM

Thanks for the initial advice. To update you; I spoke with the lawyer who advised I write to the Solicitors. It was not a solicitor who administered the estate but a Probate Manager.

I requested a break down of out of pocket expenses with the probate manager who said she had no reason to doubt the executor and that a lot of the out of pocket expenses were cash in hand. The wording in the reply, to me seemed a little bullish, by implying there is nothing I can do as the 'file is closed' were her exact words. I do not want to clog up the boards by starting new threads, but what legal RIGHTS do the Beneficiaries have?

This just does not sit right with me. As I said, it is not about the money but the fact information is being purposefully withheld, they do not have anything to hide so why make it difficult for me? The probate manager also caused me a lot of distress by stating in her reply that my nan wanted to change her will to make the executor the sole beneficiary but died before she could get to the hospital to take instruction. I intend to complain but please give me some advice on legal rights to the beneficiaries.

Thanks

g6jns_2 · 31 July 2014 at 10:37PM

Tara* wrote: »

Thanks for the initial advice. To update you; I spoke with the lawyer who advised I write to the Solicitors. It was not a solicitor who administered the estate but a Probate Manager.

I requested a break down of out of pocket expenses with the probate manager who said she had no reason to doubt the executor and that a lot of the out of pocket expenses were cash in hand. The wording in the reply, to me seemed a little bullish, by implying there is nothing I can do as the 'file is closed' were her exact words. I do not want to clog up the boards by starting new threads, but what legal RIGHTS do the Beneficiaries have?

This just does not sit right with me. As I said, it is not about the money but the fact information is being purposefully withheld, they do not have anything to hide so why make it difficult for me? The probate manager also caused me a lot of distress by stating in her reply that my nan wanted to change her will to make the executor the sole beneficiary but died before she could get to the hospital to take instruction. I intend to complain but please give me some advice on legal rights to the beneficiaries.

Thanks

This not an acceptable way for a member of the solicitor's staff to behave. I suggest that you make a formal written complaint. All solicitors are obliged to have specific procedure to deal with complaints.

Executor's out of pocket expenses

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