Executor asking for money back

[naffusername]

So, MIL died in August of 22. Number three son was named Executor. There are four sons in total.

Will stated family home was to be sold and proceeds divided equally among her surviving sons. Two sons had moved back home 20 years ago and never left.

House was sold in 23 after going through Probate.. Funds were released in December of 23.

No notice, we just found a large chunk of cash in our chequing account. We contacted the lawyer for a statement of account and were given the bare details. Our bank was happy with us and told us that the money was tax free (inheritance law here) and if the funds were released it was ours and nobody should be asking for anything after the fact.

Fast forward to April of 25. The Executor has been in touch and wants $10K to settle "our share of the taxes owing on the Estate". He claims that he released the funds early because he and brother number 4 needed to buy places to live! Husband pointed out that he had received his Executor's fees and then he turned around and said he'd never wanted the job!

Husband wants to give it to his brother as he doesn't want there to be "any bad blood in the family". I reminded him of what the bank told us and have checked on line with our tax agency. Our oldest son basically said his Father is a fool to even consider giving back the money as the funds being released signal the estate is settled.

There are no family ties to break. This was the first we'd heard from any of the brothers since November 23. They never were a close family and had no time for us when we visited and I doubt they would recognize our children. My sons did visit their Grandmother but were aware that there was some memory issues and that the son name as Executor didn't seem to want them there.

So do we pay 10K or write of a relationship that doesn't exist?

Funds from probate are not released until all liabilities have been paid! Regardless of the brother’s home circumstances a lawyer will not release any money! Sounds like the brother is a chancer and without any hard evidence no money should be handed over!

Sounds like inexperience on the executor's part. Monies should not be released until all claims on the estate have been paid, especially tax.

This is totally your dh's call. It is his inheritance, his family, but losing a brother over $10k would be madness. If tax is really due from the estate, it needs paying, and should be shared in the same proportion as the estate, in this case equally.

I would ask for a copy of the tax demand, and then pay without hesitating. I would never dream of ripping my own brother off over an honest mistake.

I was going to say this!! Surely a random large tax owing wouldn't be a nice round number like 40% split nearly between 4 beneficiaries.

It's possible that the executer was mismanaging the inheritance for their/their brothers' benefit like buying a house and I think this is forgivable IF TRUE. This isn't the UK I'm guessing as you generally can't release funds until all the estates debts are paid. It's possibly it's different elsewhere but seems very foolish.

It's also been years, surely any tax outstanding would have come up before now.

I would be very suspicious and do what very sensible pp advised. Speak to the solicitor involved, ask for proof, only pay the relevent authority not the brother.

An Executors role is to collect all monies owing to the deceased and pay all debts prior to any distribution of remaining balances. By his own admission your husbands brother released funds early and is now personally liable for settling taxes that he didn’t deal with prior to distribution. He should have been keeping detailed accounts so as a first step I would ask for these to see exactly what the true picture is. If the taxes are owing then the right thing to do is for your husband to settle his share and for you to be supportive in him doing this. If the brother hasn’t kept proper accounts then he needs to go back and look at everything that he has done and produce some. The whole thing sounds a mess quite frankly. A lot of assumptions being made on this thread but note you’re talking about $ so rules on inheritance tax etc could be very different where you live.

Obviously you give the money back. Why should the brother who's done all the work and taken all the responsibility be left on the hook and personally liable?

DH was executor for his father last year. The estate was divided 50/50 between him and his brother, not close but always honest.
FiL passed in April 2023. Inheritance tax was first then probate then releasing the final funds as agreed by the lawyer. Week before last DH had a letter from HMRC asking for more tax. Tax had already been paid via the solicitor before funds were finally released. DH spoke with solicitor and she said HMRC can come back anytime but usually within 10 years!
DH spoke to HMRC for confirmation and they said oh hang on, yes we got the money from the solicitor but didn’t allocate it. And then from somewhere found DH did actually need to pay another approx £80. Sigh. He paid it and didn’t bother to tell BiL who would have blamed DH.
DH kept meticulous records as did the solicitor. Final
accounts were sent to both executors (DH and DB) to sign before final funds were released.
I would ask for the accounts and say you will consider if everything is in order.
£40k is a lot of tax with all the exemptions available. But property is expensive so maybe that’s true.

First of all as the one inheriting I’d want proof, proof, proof. Then I’d decide. Has your H asked for this?

You used the $ sign. Which country are you in?

(A large proportion of mumsnet users are UK based)

This.
When I was co-executor for my late Fathers will the solicitor released the funds, NOT the executors. Other countries will potentially have different laws but do get sight of the tax statement.

You and your son need to stop looking at the money as yours when it was your husband's inheritance. Comments like complaining about being given money "with no notice" show that you are an utterly ridiculous person for anyone to try to work with. While it's very obvious that you've never liked his brothers, it's their mum who chose which one was to be executor, so you need to respect that choice.

As it is your DH's brother, let him decide for himself if he wants to see figures to validate the tax amount or just give it to his brother. It's really not worth a fall-out to him, he's already said that, so stop interfering.

It’s up to your husband but if I were him I’d ask for the accounts so he can u see stand what happened and be sure that all is now settled.
Being executor is a tiresome job and it sounds like his brother should’ve waited to distribute funds - he shouldn’t lose out himself for making this mistake.

I agree with this ^

It appears that BIL was a bit of an idiot and rushed the release of the inheritance money WITHOUT paying tax because a couple of the beneficiaries needed the money quickly

BIL should have made it clear that tax had not yet been paid

He definitely messed up. But I wouldn't drop him in it by not paying up

However before I paid anything back to him, I'd want to see an official financial statement

I agree about wanting to see some paperwork, but if the tax amount is true I would be paying it.

Your dh needs to get a copy of the will and see the debt

They need to talk. The executor needs to show transparent paper trail of taxes and costs incurred. And then yes, they should all be split equally if the profits of the sale were also equally split. No one chooses to be an executor. It's a time-consuming, thankless task. He made a mistake. So what? He'd never done the job before, was grieving the death of his mother and needed to find a home. Stress upon stress.

Don't be greedy. Have a heart. Why should he do all the work and pay your portion of tax?

Yes this.

This!!

I’d want proper evidence of the amount due and I’d only pay it direct to the Inland Revenue. I wouldn’t transfer it back to the third party.

I acted as executor and it’s very difficult job and generally those undertaking the work are usually grieving while they are sorting out the estate.

The brother doing this saves a lot of money on solicitor fees and I think you are being very unreasonable if don’t repay any tax money that is owed. I’d expect to see the documentation from HMRC though.

For those who say all tax is paid before probate is granted you can still owe tax if the deceased owed income tax as you can pay this after probate

You need an official copy of the paperwork, and a copy of the demand for tax. Then pay one quarter direct. This person may have made an error, executors are not professionals, and given out money not realising that there would be further tax due.

Just ask for the proof. And keep out of it. Oh and tell your son it's none of his business too, why on earth do you think the opinion of a child means anything in this?

According to the Gov.uk website, “You usually need to make a payment towards any Inheritance Tax due before you can get a ‘grant of representation’ (also known as ‘probate’)” - in other words, they won’t release the money until the tax has been paid. The bank has told,you that the money is yours - I’d be asking some very searching questions if your DBIL, and as others have suggested, would demand to see a bill from the Inland Revenue for any sum owing. IF a mistake has been made, by all means rectify it - but I’d want to know how and why.

Ask for evidence of the outstanding tax. If you can verify its authenticity, pay what is owed.

If it's owed then your husband pays, that's the only thing to do. It's dishonest to consider otherwise. Some people.

This completely. If you are happy that the debt/money owed is genuine then paying the 10k would be the right thing to do. Being an executor is stressful and people make mistakes. If all the brothers refused to pay then exec brother could be left having to find 40k. Which isn’t fair when he’s done all the siblings a favour by being exec. You need to reframe it and stop thinking about it as “giving money to the brother” and instead think of it as money/tax owed to the govt.

It would be very immoral to rip a brother off to the extent of not paying regardless of whether legally you could get away with it. The closeness or not of the relationship is irrelevant. And to be honest both you and your son don’t sound very nice, like you’re making excuses for not paying it back. If I was your dh I’d be seeing you in a different light.