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Beneficiaries approving accounts

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  • Beneficiaries approving accounts

    I am the executor for a reasonably simple estate and I am just about to distribute the assets to five residual beneficiaries (including myself). I have prepared final accounts, sorted out taxes etc.

    I have seen conflicting advice regarding the beneficiaries approving the accounts - should I be sending the accounts out first and waiting for them all to approve them before distributing any money, or can I send the money and a letter with a copy of the accounts plus a receipt for them to return saying they approve the accounts and have received their share? If I do the latter and one of them complains then what happens next?

    What difference does preapproval actually make given that I'm responsible for any issues that my turn up anyway?
    Tags: None

  • #2
    Hiya, I'll tag Peridot for you although she likely won't be here until tomorrow. Personally I think I'd rather get everyones approval of the accounts and sums to be paid out, and deal with any issues before sending out the cheques. Easier to do a recalculation if anything is flagged up that needs dealing with and get approval for changes before paying out than try to get money back off people after the event.
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    • #3
      OK, thanks for doing that. My feeling is that I'd like to get it out ASAP as I know several of them are hard up and what with Christmas being just round the corner...

      Is it acceptable to do something like withhold £20K (net estate is £220K) 'pending approval' to cover contingencies and distribute the rest now?
      Last edited by will-i-am; 25th November 2018, 15:17:PM.

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      • #4
        Hi Will-I-am,

        As the executor/administrator the decision is yours. It is good practice to have accounts 'approved' by the residuary beneficiaries but not compulsory. If you are certain that all the liabilities and tax have been dealt with then it is up to you. You can of course give interim payments pending finalising the accounts, but from the sounds of it you seem certain the estate is finalised so this may not be necessary.

        It may be an idea to get an indemnity signed by the beneficiaries when you send their cheques/transfer the money, which would confirm that if any unknowns came up then they would be responsible for dealing with any repayment from their legacies. The other issue is whether you anticipate there being any possible claim from a potential beneficiary to the estate that may arise. Any claim under the Inheritance (Provision for Family & Dependants) Act would have to be made within 6 months of the Grant being issued so lawyers dealing with estates will often recommend waiting for that period before distributing. Again this isn't set in stone and is up to the executor/administrator. You probably know the estate and family well enough to know the likelihood of any claim coming up so again the decision would be yours.

        Maybe you could send the estate accounts for approval stating payment will be made as soon as approval is received from all the residuary beneficiaries? That way it does encourage them to respond quickly. Could this be done by e-mail to them with the accounts attached and request bank details so a transfer can be done as quickly as possible?
        I am a qualified solicitor and am happy to try and assist informally, where needed.

        Any posts I make on LegalBeagles are for information and discussion purposes only and shouldn't be seen as legal advice. Any practical advice I give is without liability. I do not represent people on the forum.

        If in doubt you should always seek professional face to face legal advice.

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