Co-executor being manipulated by vindictive beneficiary

[Jesmar]

One of my siblings and I are executors dealing with our parent's estate. We have a solicitor, but my co-executor's behaviour means that no opinion on division of assets is forthcoming on the grounds that it would be advising one of us aganst the other.

We are now at the stage of dividing the assets, which seems likely to result in the estate being put on hold (not sure what the legal term is), due to my co-executor's unreasonable demands and obstinacy in the face of facts that are simply ignored and my refusal to give in. If you want an idea of the kind of logic and reasoning that I am faced with, check out Monty Python's Argument sketch on Youtube, especially the part with John Cleese and Michael Palin!

Each beneficiary now has the option of taking an equal part of an investment portfolio; either the cash value or by opening our own accounts with the same firm.

I am assuming that if we all choose to take the cash, the proceeds would remain part of the estate, and would go into the solicitor's client account until my co-executor and I agree on distribution of the entire estate. This would suit the two of my well-heeled siblings who have been causing all the problems and allow them to use it as leverage to continue pressing their demands and increase our solicitor's bill, which is already many times the original estimate.

To try and avoid this, I am considering an investment account that is classed as low risk and a stockbroker or sales person who I spoke to said that once the papers were signed and the account set up, I would have full control of it, but I have to wonder if that will really be the case in my situation. All being well, I assume that the other beneficiaries would also be entitled to their corresponding cash before the rest of the estate is agreed on.

So my question is, once my co-executor and I have signed the forms for disbursing the investment portfolio, if I choose the investment option, is there any way for my co-executor to prevent my access to the capital in it, on the grounds that we have not yet agreed on the rest of the estate or any other grounds for that matter?

Hope someone can advise - at the moment I can't even ask for my executoring expenses back without risking more arguments and I need a break!

[Peridot]

Hi Jesmar,
Welcome and sorry you're having these issues.
Just going back a step, what does the Will state? Is there a specific legacy of the investment portfolio or is it all part of the estate value to be distributed as part of the Will to residuary beneficiaries if there is no specific bequest?

[Jesmar]

Hi Jesmar,
Welcome and sorry you're having these issues.
Just going back a step, what does the Will state? Is there a specific legacy of the investment portfolio or is it all part of the estate value to be distributed as part of the Will to residuary beneficiaries if there is no specific bequest?

Many thanks for responding Peridot.
Apart from a small cash bequest to a friend, the will simply divides the estate into equal parts and does not mention anything specific.

[Peridot]

Hi Jesmar,
So one of the executors wants to keep some of the investment rather than cashing it in? If the Will is silent then usually the whole of the estate would effectively be cashed in and then divided equally between the residuary beneficiaries once the specific cash legacy, debts and testamentary expenses are paid out.
Do you have solicitors acting?
Usually you wouldn't be able to cash in part of a portfolio and transfer a part of it to one of the beneficiaries. The whole lot would be cashed in. What the beneficiaries decide to do with their share is of course their business and they could reinvest, but as I say I don't believe you can leave a beneficiaries 'part share' of an investment in, while removing the other part. Why do they wish to keep it?

[Jesmar]

Thanks Peridot

A letter from the stockbroking firm many months ago, said that when we were ready to distribute the assets, they would need a letter of authority signed by the executors to transfer the holdings, and if the beneficiaries want the assets to remain under their management and don't have an active account with them, we would need to complete a client agreement form so that they can provide advice appropriate to our circumstances.

A week ago our solicitor said that instead of cashing in the investments, "one or more of the beneficiaries may wish to take some of the shares rather than cash, in which case it may be possible to appropriate them." adding that it was important to know whether we intend to sell or transfer everything, and that the investment manager would generally deal with the sale or transfer on receipt of the signed forms. The last email a couple of days ago said "It should be possible to transfer part of the investment to a beneficiary who wishes to receive that as well as cashing in others which are to be liquidated.". We should be receiving the "forms to encash or transfer the investments" soon.

The person I talked to at the stockbroker was part of the customer services team that deals with the type of investment I am considering. He told me that once an investment account was set up for me, I would have full control over it, but it later occurred to me that he might not be familiar with procedures involved in probate admininistration, which is why I wonder if there may be some legal mechanism by which my co-executor could prevent me taking control of the investment account until the rest of the estate distribution is settled.

It is myself who is considering the investment account, as my co-executor will certainly refuse to sign off on the estate accounts out of pure malice unless I accede to the demands even though the amount in dispute is microscopic compared to the value of the investment. The reasons for this I only touched on in my first post and have more to do with my siblings wish to cover up their own misbehaviour by smearing me, so to avoid making this post too long and clouding the issue I will leave the details for another post, but basically it will give me much needed access to funds.

[Peridot]

Hi Jesmar,

If the stock brokers are able to effectively divide up the shareholding, retaining some funds (yours) for reinvestment and cashing in the rest I'm not sure what the issue is. The other option of course is to cash the whole lot in and you invest your share once you receive the funds. I appreciate this may not be the most financially astute thing to do but it may prevent a complete melt down by your executor?

The other issue a partial cash in could cause is also an issue with the tax due or interest accrued. As residuary beneficiaries you are entitled to a share of the residue which if interest has been accruing is also included. If distribution is not imminent and some stock is retained it could be that you would be receiving a larger proportion that the others if the investment does well. It may be neater to cash the whole lot and then re-invest with the broker in your own right.

Have you seen an Independent Financial Advisor to see what they would advise? It may be sensible to take some independent advice, but you can't force the other beneficiaries to accept their share of the investment is left in the portfolio or that the portfolio isn't divided equally (including interest accrued). Ultimately it would be the executors decision.

[Jesmar]

I did get some advice and there was a risk of losing some capital in the short term if there was a no deal Brexit and a larger one if interest rates went up due to the mix of UK stocks 15% and bonds 55%.

I had decided to give it a miss anyway as new problems cropped up, but the second to last paragraph of my first post puts it fairly well. i.e.

"once my co-executor and I have signed the forms for disbursing the investment portfolio, if I choose the investment option, is there any way for my co-executor to prevent my access to the capital in it, on the grounds that we have not yet agreed on the rest of the estate or any other grounds for that matter?"

To be more specific is there some legal way that they could have thwarted my aim to access the investment . e.g. something similar to a lien?

I don't really need to know myself now though it may be useful for someone else in the same position.