Solicitor error paying out on an estate

[jonppage]

In July last year I was informed I am the beneficiary in a late friends will, the pay-out was received and some weeks later I paid off my mortgage. This week the solicitors contacted me to advise they wanted about two thirds of the funds back due to an error administering the funds to me only. I am not in work and getting no benefits so can't pay this money back myself, my wife is upset that she would have fund the resolution.
On the basis of the funds received we took a loan to have the drive and paths replaced with resin, so committed a good few thousands to having that work done.

At this point I do not know what to do.

[PallasAthena]

Do you know if the solicitor was the Executor or if they had just been hired by the Executor to carry out administration of the estate on behalf of the Executor?

Did they explain why they wanted most of the original pay out back?

[atticus]

I have some further questions.

1. Had you previously been given any indication of the amount you might expect to receive?

2. What exactly was said to you at the time the payment was made?

3. Did you have any reason to think that you had been paid too much?

[jonppage]

The executor is the director of the solicitors who managed the will.

I received a letter with the documents that needed to be signed, these were signed and sent to the solicitors by e-mail. So no discussion with the solicitors.

The documents received showed the amount each beneficiary would receive, I had no way of knowing this was incorrect. I have not seen the will and the details of the will were never discussed.

[atticus]

The documents received showed the amount each beneficiary would receive,

Is this the amount that was paid to you?

How much do they say was overpaid?

[jonppage]

I received the amount stated against my name, I am being asked to return just short of 40K.

[atticus]

Thank you. For that amount the solicitors are not going to accept responsibility easily. I guess they will notify their insurers, and they and their solicitors will pursue a case against you vigorously.

[atticus]

Sorry - pressed too soon to post that reply.

You have said that you had no way of knowing that you were overpaid, and that you have used the money in good faith to pay down your mortgage and on other things, believing the money to be rightfully yours. That can give you a defence of change of position. Google "defence of change of position" and you will find several learned legal articles - make sure you read those based on the law of England and Wales.

But this is far from straightforward. You will be pressed hard as to what you believed and understood. I strongly recommend you to seek good legal advice. Do you have legal expenses cover with any insurance policy?

[jonppage]

I have spent some time looking at the information of change of position, but what I read if I understand it correct indicates this defence does not apply if the funds were used to pay off a mortgage.

[atticus]

It seems that may be the case. But how much was used to repay mortgage and how much was spent on other things?

Will you be able to borrow on comparable terms?

I think you have room at least to negotiate as to amount to repay and time to pay.

[jonppage]

Generally, a recipient who has paid off debts earlier than he would otherwise have done will not have a defence of change of position. The recipient will be no worse off if he has to repay the trustees, rather than the lender. The defence will be available if and to the extent that the trust property has been stolen, destroyed, or depreciated in value, through no fault of the recipient.