can executor/adminstrator withhold distribution?

[blossom12]

My father died intestate, he made a will but did not sign it correctly. My sister was named as executor and is now the Administrator under grant of administration. We are in dispute over a loan from my father which she says he gifted to her but she has no written proof. The will, however, does mention her repaying a previous loan and our father stated on numerous occasion to us all that his estate was to be split three ways to avoid any disputes.

So my brother and I are in dispute with her over that. In the meantime she has now completed her duties and is awaiting any tax repayments from the estate before distributing the funds. She has asked us to agree to this loan becoming a gift before distributing the remainder of the estate. We have declined saying it is not lawful for her to impose conditions before distribution.
She now says that as we are at an impasse we should seek legal advice and that she does not intend to distribute the funds until an agreement is reached.

I would like to know if she can legally withhold funds like this. I believe she should distribute the funds equally to the three of us first. Is this correct? What is the proper procedure?

[des8]

Re: can executor/adminstrator withhold distribution?

Hi & welcome.
Sorry to hear of incipient family problems. There seems to be nothing like a will to cause family rifts.
Was the estate large enough to be liable to Inheritance Tax? If so it might be worth pointing out to your sister that the gift, if made within seven years of your father's death, will have to be accounted to HMRC for payment of additional IHT, if any. The general rule is that the person who received the gift is ultimately responsible for payment.

Once the grant of administration is obtained the administrator must distribute the assets in a timely manner, altho' he/she can take as long as necessary to do the job properly.
Have you been given a final accounting for the estate? If so I assume you are not agreeing them.
I can only emphasize that you should try and resolve this dispute by negotiation, to avoid stress, aggravation and high legal costs in the long run. If this doesn't work however and you feel strongly enough about the matter you may have to involve Contentious Probate Solicitors.

[leclerc]

Re: can executor/adminstrator withhold distribution?

How long ago was the loan? If it was 7 years prior to his death then she will have to pay inheritance tax on that amount if memory serves me right. Unfortunately, as the will was not formally made legal so to speak, anything about the nature of that will is no longer valid.
Personally, I think the onus is on the sister to prove it was a gift but that unsigned will would suggest otherwise. There are two ways about this: 1) you can argue about the loan and the money effectively will be delayed for x amount of months, or 2) you can simply state that you will overlook the issue of the loan and that the funds are distributed in the spirit of what your father intended, ie 3 ways on the estate in question.

Am not sure I can offer further advice than that. Legally she can withhold the distribution of funds until such time as the dispute is rectified.