Estate sign off and distribution

[crustypants]

Re: Estate sign off and distribution

So she does have the right to refuse distribution to us ( the parents) to place our child's inheritance in trust, if I don't supply an indemnity? Even though the will stipulates that we are to place the money in trust.
Surely just by the fact she has carried out distribution as per my fathers wishes, that would cover her from any future liability.
Also, am I right in thinking that my son could terminate his trust himselfwhen he turns 18 if he wanted to, even if it is supposed to run till he is 21
Thanks peridot and des8 for the assistance you've given me so far on this thread, I'm always greatfull

[Peridot]

Re: Estate sign off and distribution

Hi,
As executor she is responsible for ensuring as far as reasonable that the Will is complied with and it's reasonable for her to obtain an indemnity from the parents on passing the legacies to you. This may be useful to help clarify:-
When Can a Child Inherit
Any minor children (i.e. under the age of 18 years) cannot receive any legacy left to them until they attain the age of 18 years or any other age greater that may have specified in the Will.* Their legacy would be held in trust by your Trustees (the parents in this instance) being responsible for investing the monies to the best possible advantage for the ultimate benefit of the child on attaining that specified age. However, the Trustees have power to make an advance of one half the capital to the child prior to the specified age but there must be very good reasons for doing so.* The Trustees also have power to use the interest earned on any investments for the child's benefit maintenance or education.* The child has a right to all the INCOME from the inheritance on attaining the age of 18 years even if you have declared that the child cannot have the capital until some greater age.

[crustypants]

Re: Estate sign off and distribution

Thanks again for your thought out and measured reply Peridot. But it didn't really answer my question as such. I am aware of the general standing regards trusts and receiving the income earnt from it when he turns 18. But I've read on here about the rule in Saunders v Vautier. I just wanted clarification really that even if his trust is to run until he is 21, he has the ability of his own accord to shut down the trust when he turns majority age. He is the sole beneficiary of his trust.
This is important to me because, she has asked me how I can guarantee he won't get it till he is 21. This rule would mean that i couldn't possibly provide any guarantees, and therefore can't provide her with one.
I know you've said I shouldn't have to provide her with one but she wont let it go.

Thanks

[Peridot]

Re: Estate sign off and distribution

Hi,
The legacy is contingent upon your son reaching 21. If in the unlikely event he did not reach 21years then the legacy falls back into the residue. Therefore if you wished to try and use the Saunders argument you would have to obtain permission of all the residuary beneficiaries also, not just your son.
I assume your father had some reason for indicating your son should not receive the inheritance until 21? Probably knowing what teenagers are like with money I expect and maybe he thought the lump sum would be more helpful at a later point?
Once a receipt and an indemnity is signed, you are the one that becomes responsible and therefore liable in the event the legacy is for example, not invested appropriately or something were to happen to your son before 21 and therefore the legacy should fall back into the residue to be divided accordingly.
What about seeking some independent financial advice on whether there is any product that could be utilised until your son reaches 21 and just wait until that time? Is there any major problem with waiting until your son reaches 21? Should you just follow your father's wishes?
You can no doubt see the issues caused with preparing your own wills. I hope the rest of your family have made arrangements to have their own wills dealt with by a professional.

[crustypants]

Re: Estate sign off and distribution

Peridot, I think your getting the wrong end of the stick here. I'm not trying to get my son to receive it before he's due. I have no intention of that. In fact it wouldn't worry me if it was 25. It just that when the executrix decides she wants something, she doesn't move on any further because she just won't see any other possibility than what she wants. She doesn't take regular legal advice , rather just keeps threatening it to threaten further charges to the estate. My whole point here is that she wants a guarantee from me aside from the indemnity. I'm saying I can't give her that if the law allows my son to close his trust himself at 18. Everything then comes to a standstill. Unless you are suggesting I can give a guarantee. Of course my fathers wishes are of paramount importance to me, albeit I'm not sure these are his wishes anyway. She wrote it 2 days before my father passed, him high on morphine. We have a statement from the doctor to say if he had known she was making my father do a will, he wouldn't of allowed it. My name isn't even spelt correctly on it. It's taken her 8 years to get passed at probate. At least two solicitors said it was one of the worst worded wills they've seen written, it's so ambiguous. But here we are and just trying to deal with it. Both my wife and myself and my brother, the other residual beneficiary have professional wills. It's a nightmare.

[Peridot]

Re: Estate sign off and distribution

Hi,
If you have no intention of letting your son have the capital sum before 21 then is there any harm in giving her the guarantee if it moves things along for you. As I said it would not be only your son who would have to agree to an earlier pay out but all of the residuary beneficiaries (not all beneficiaries so presumably not your step mother). In any event how would she find out?
I would suggest you jump through whatever hoop she wants you too. You and your wife will be the trustees responsible for the fund and the ones who could be sued in the event something was not done correctly. Your son would be the only one that could sue you. In the event he was no longer here before he reached 21 then the residuary beneficiaries could sue you if the fund had been given to him before the contingent age of 21. From my understanding you and your brother as the only residuary beneficiaries would be suing you and your wife, as trustees, for the half of the legacy each of you would be entitled to in this scenario. Again not an insurmountable issue even if it did happen. You would need to find the funds equivalent to the half legacy plus interest to pay to your brother.
It seems she will not budge believing she understands the process. As you say a bit of a cobbled will which she has obviously taken advice upon at some point and has run with the odd bits of info she has gleaned. It is scary being an executor particularly when you ask for advice and keep being told you will be personally liable for any errors etc. Even more difficult when a Will is not clear. So glad to hear you and the rest of the family have sorted yours out properly!
To finalise matter,s for the reasons I have pointed out above, I would suggest just doing what she asks. If you have no intention of handing the legacy to your son before 21 there is no problem. As the trustee and for the reasons I have mentioned previously it would not be up to your son alone to end the trust so he can't demand it at 18 without all residuary beneficiaries also agreeing which I assume as one of the res bens, you would refuse so the argument is immaterial really.
Once finalised and legacies pass to the relevant people your step mum has no further influence unless she has not dealt with tax and debts correctly so she can no longer make any 'demands' of you.
Apologies if I have confused matters but I feel that you are tying yourself in knots with the ifs and buts. You need to take a pragmatic view of this in order to reach a conclusion.
So you and your brother (and spouses) should provide indemnities as parents for the 'contingent' legacies left to the grandchildren.
If she demands a guarantee also and you have no intention of letting your son have the monies before he gets to 21 then is there really an issue in giving this?
In the worst case scenario you are persuaded to pay the money to your son sooner and then the unthinkable happens and he doesn't reach 21 then just be aware you would have to find the funds to pay the relevant share to each residuary beneficiary.
Hope this clarifies things.

[crustypants]

Re: Estate sign off and distribution

Thanks again Peridot. It's just hard to keep on rolling over when every step of the way, you think you have provided what she wants then you get another letter in the post demanding something else before she distributes. There is always just one more thing. I keep thinking "this will get it done", then bang. Something else. She must be running out of things now though. Thanks for your valuable time !

[Peridot]

Re: Estate sign off and distribution

Very frustrating but hopefully it won't be long now. Good luck.

[crustypants]

Re: Estate sign off and distribution

Hi, me again. Is it possible someone could just confirm for me if it is actually UK Law that an indemnity is provided for advancement of the trust funds for a minor (under18) or is it simply a request. Nothing too major today, just for my clarity as within the space of a week I have just been told at first "she would like it as an additional safeguard" then the next one "she was advised by her solicitor that it is required by law as he is under 18"

thanks

[Peridot]

Re: Estate sign off and distribution

Hi,
Anyone below 18 yrs cannot give valid receipt for any sum as they are still a minor. An indemnity would be required by the trustee to release the funds to a parent or guardian, to protect them in the future should the child never receive the money in the future.
So yes she will need to be given an indemnity, is the short answer.

[crustypants]

Re: Estate sign off and distribution

Thank you peridot. You will probably not be surprised to hear that this is no closer to conclusion. She has two weeks ago sent me an email stating she has been advised that trust law has changed since October 2016 and she is now prepared to advance me the whole £6000 for my sons benefit. I replied back that I didn't want it and she had all the details of the government trust fund so she can deposit as per my wishes. But she keeps coming back saying she can give me it all and to send her an indemnity. Even though I don't want it. She is so confused with what she is telling me that nearly every email now she contradicts what she said previously.
I have a meeting with a litigation solicitor tomorrow as she is constantly changing her demands any time we get near close. The executors year now is over and I fear this will never end.
I did suggest to her maybe she should just concentrate on distributing as per the will (which clearly states grandkids trusts to be allocated by the parents, instead of confusing matters with advancements etc... But she replied back with her usual threat of going to her solicitor again for advice and wracking up more legal costs as since August last year she had based everything on advancement. She would then need advice on how to make sure distribution as per the will was carried out correctly.
In all honesty this is making me sick now, it is just constant rinse and repeat

[Peridot]

Re: Estate sign off and distribution

Hi again,
I'd be inclined to accept the whole amount due to your son and just invest it yourself. Provide the indemnity and move on. For that amount I suspect an IFA would say just put the sum into a savings account but it may be worth getting some independent advice on that. At least that way you can be done with it and move on. If you don't how on earth is your son going to be able to get the remaining sum from her when he is entitled?
Good luck

[crustypants]

Re: Estate sign off and distribution

Good Evening chaps, I hope we are all well. A couple of small questions if that's ok. It is progressing albeit slowly. My son finally received his money and it is duly deposited into the trust fund. my brother and myself are now in receipt of the final estate accounts and the questions revolve around that. First off, the executrix wont pay the residuary out until we have signed the accounts and returned them to her. I thought the law was on my side regards this and she wasn't allowed to withhold them. Every single debt and legacy is now paid out but she has stipulated on her covering letter with the accounts that unless we sign them we aint getting the money. Once I have resolved some accounting issues I would be happy to sign them but I fear my brother wont. Is there some kind of wording I could use to say that she cant keep hold of my money or can she regardless?
My other question is regards to the accounting. The Executrix has made an entry on the accounts for interest owed to her for a 4 year period that she has paid out to pay for legal fees and sundries out of her own money. Now during that period, she had already collected enough money that easily covers the full amount for all legal fees and sundries. Is it right that she can charge us lost interest on her money when she could have paid the debts with the estate money and not use her own at all?
She is also charging us for tax on her savings where the estate money has taken it over the limit. I will copy her exact wording to make it easier to understand ------- "My own savings interest will fall below the £1000 personal tax free allowance, but with Estate Fund interest, this takes it over my allowance by £173.90. £173.90 taxable at 20% = £34.78 tax to be paid by me in tax year 2016/17 and reimbursed from the estate.". I'm not entirely sure if this is normal but some clarification would be great.
thanks in advance again

[Peridot]

Re: Estate sign off and distribution

Hi Crustypants,

Sorry not been around. Pleased to hear the grandchildren have at least got their legacies now! Blimey she really wants her cake and to eat it too! Sorry maybe a bit insensitive of me. Going back a step or two. Is she also a residuary beneficiary, sorry I can't recall? I will start with the claims that the executor is making before talking about signing the accounts.

Any interest earned on the estate funds, which technically should have been held separately to her accounts, but we'll skim that,, should be divided between the residuary beneficiaries. If she isn't a beneficiary then it shouldn't make a difference to her account?? I have never seen this. The executors are of course allowed reimbursement for their reasonable expenses such as travel, postage etc but should technically be keeping receipts to show their expenses.

Unfortunately my recall on the last thread is not perfect, but I seem to recall the executor is particularly difficult and it ultimately came down to whether you would want to waste further time and money fighting what is technically not the best way of dealing, but maybe in the bigger scheme of things would be less troublesome to overlook/sign/finalise?

I am not sure that I understand what she is getting at, all I would say is as executor she had control of all the assets, which no doubt she obtained as soon as she received probate. Forgive me was there a significant period between death and probate? It is perfectly acceptable for the legal fees to be paid by the estate, so I don't know why she used her own funds. In any event, if she had to for whatever the reason, why didn't she replace those funds as soon as any bank accounts etc were closed? If she didn't do that then surely that is her look out. I definitely wouldn't be minded to hand over 4 years interest on solicitors fees as she paid them herself. Has she included the solicitors fees on the accounts?

You probably are already aware of the purpose of the estate accounts but in any event and as a recap, the purpose of the account is to show all the assets of the estate, the payment of debts, administration expenses, income accrued, payments on account made and legacies paid and the balance remaining for the residuary beneficiaries. The balance will normally be represented by a combination of assets transferred to the beneficiaries in kind or cash. Approval of the accounts is shown by signature of the beneficiaries on the accounts releasing the Executors from further liability to the beneficiaries in the absence of fraud or failure to disclose assets.

Maybe you should consider playing her at her own game and demand to see all bank accounts for the period and bills. Was there a joint account? Confirm that you won't sign anything without proof of payments and written confirmation from the bank of exactly what interest she would have earned on the amount paid in legal fees. If she really is going to be that petty surely the amount can't be so easily calculated as I'm sure the bill was not paid 4 years ago, would there not have been more than one bill?

With regard to the tax is this her own tax or the tax due after death on the estate assets? I suspect that she has used her own account not a separate executors account. Tax may be payable from the estate, but not on her savings, I am confused! Surely if she didn't use a separate account then it is her issue to argue with HMRC? Maybe demand an HMRC letter confirming tax that would become payable on the figure?

It is difficult, you know yourself the more hard nose you become the more difficult she will be, which leads to further delay and potentially you and your brother applying to the Courts for the estate to be distributed resulting in more costs being taken from the estate and the residuary beneficiaries sums being reduced to take account of that.

I suppose the problem you have is persuading your brother to sign them to get this estate finalised at long last. Yes the estate can be distributed without residuary beneficiaries signing off on estate accounts, but I doubt she will let this go. In practice, I would send the estate account to the residuary beneficiaries for approval, together with a release from further liability for signing. A discharge will only be valid however if there has been full disclosure of the estate assets, the dealings with them and of the balances available for distribution. The executor cannot be released from liability where there is fraud or failure to disclose assets. I wonder if the solicitor she saw told her this and that is where it has come from since the beginning?!?

She may believes that by signing the accounts you are also releasing her from liability, but not actually aware that for this to be valid she should give a clear and accurate statement of the estate property and income, full details of receipts and payments with corresponding paperwork being available if needed. To reiterate, no the accounts do not have to be approved for her to distribute the estate, but she may refuse to do so believing that the signing also releases her from liability.

I think you need to make sure that the tax position has been settled absolutely or suggest that the executor holds back a small amount to deal with any tax, if HMRC contact her in relation to the deceased's estate NOT her own? Lay executors can claim their reasonable expenses. Claiming interest for money she may or may not have spent, but for the solicitor fees in that 4 year period would not appear reasonable.

I could talk around in circles here, so I think you just have to keep in mind, for the sums that you are dealing with, is it worth the fight! I will try and find your original post and if I come up with anything else I will post again.

[crustypants]

Re: Estate sign off and distribution

Good morning. Quick question. Am I allowed to question an amount of £1200 withdrawn from my fathers current account 1 month before he passed away. At that time he was incapacitated and housebound and flitting in and out of hospital then finally the hospice. There is no mention of this in the will having been paid for anything and no mention in estate accounts of an asset he may have purchased. it seems an awful lot of money to have been withdrawn for daily living expenses when he was just sitting at home or in hospital.

This is something that has only just come to light to me and as I haven't yet signed off any accounts is it right for me to question this.

Kind regards