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Indemnity form for executor

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  • Indemnity form for executor

    Hi all, I'm after a bit of advice please. Myself and siblings are beneficiaries to a will and have been asked to sign a letter of indemnity so that we can not make any demands or challenges on the executor once interim payments are made. The problem is I don't think I can sign it as we have been given no information about what the payments are and to whom they are made. Unfortunately we've had no updates from the executor and the solicitors who are administering the estate have provided little too. Just wondering if such a letter of indemnity is standard and what people's thoughts are with this? Many thanks.
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  • #2
    Re: Indemnity form for executor

    Hi and welcome, have you not even seen a copy of the will? if not as beneficiaries you are entitled to, I would ask or if need be write a letter of request.
    If yourself and your siblings are pecuniary legacies (all receiving a fixed amount) then it is ok to sign the form in my opinion as you have nothing to challenge anyway once you have received your legacy.
    On the other hand if you are all residual legacies (sharing what's left of the estate after it has been administered) then you need to wait till all the estate is wound up and also see the accounts. This may take some time if probate is needed etc.

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    • #3
      Re: Indemnity form for executor

      Thanks for your reply. Yes, my siblings and I are residuary beneficiaries. To make it more complicated there is a house to be sold and proceeds to form part of the residuary too. We've not been given any figure regarding the interim payment. I feel like by signing I'm signing away my rights. This is the letter:

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      • #4
        Re: Indemnity form for executor

        "In consideration of an advance/interim payment being made to me in respect of my beneficial interest of the estate of the above named deceased will... the executor hereby indemnify him to the extent of the amount of the interim payment being made now or in the future being made (in proportion to the share bequeathed) against all claims and demands which may be made against the above named deceaseds estate in respect of my beneficial interest in the estate".

        Does this seem standard? And would we stil be able to get an interim payment without signing? Can they demand signing and withhold all
        Money? Thank you!

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        • #5
          Re: Indemnity form for executor

          Wish they would put things in plain speak us minions would be much better able to cope.
          To me all that means is if an interim payment is made and things go wrong (ie not enough in estate to pay all debts etc) then the executor/s will not be held responsible so you would and would have to give the money back.
          Some executors take out an insurance to cover such risks when dealing with estates.
          That's my take on it but will get [MENTION=85500]Peridot[/MENTION] to take a look too.

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          • #6
            Re: Indemnity form for executor

            Hi Pepper1,

            The executor is personally liable to ensure tax, debts etc are settled before residuary beneficiaries receive their sums. What the indemnity is aiming to do is protect the executors in the event of any shortfall that arises in respect of any amounts due from the estate, during the administration i.e. until the estate is finalised, all payments made and beneficiaries dealt with.

            If they have paid out to beneficiaries and they then discover another debt or further tax is due for which there are insufficient funds left to settle it, then they can ask the beneficiaries for the sum to be returned. As you can imagine this doesn't always work out! The beneficiaries may refuse, or no longer have the funds available to return the sum needed, the executor then has to pay themselves.

            By signing the indemnity it means that the executor has some leverage to get monies back from beneficiaries to cover any shortfall, if it occurred. In reality if solicitors have been dealing then hopefully notices have been placed for creditors to come forward so they can be dealt with and also the tax calculations to date should also have been made, so hopefully nothing else will arise that can't be covered. The solicitors will also have advised the executors on an appropriate amount that could be paid by way of an interim payment.

            It is usual to ask for an indemnity if an interim payment is made when the estate is yet to be finalised. In this case you mention there is still a property to be sold so it is unlikely there would be insufficient funds to cover any tax for example capital gains tax that may be due on the property, if it sells for more than the date of death valuation.

            The executor does not have to make any interim payments and could insist that no beneficiaries receive anything until everything is finalised, so requesting an indemnity to protect themselves if they agree to pay amounts sooner, is not unreasonable.

            I hope that clarifies things a bit.
            I am a qualified solicitor employed by the LegalBeagles forum to provide guidance on a wide range of legal queries. I 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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