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?

As I understand it IHT has to be paid before probate can be granted. I would want to see all paperwork. Was a solicitor involved. I can't see the probate office granting probate without sighting the paperwork from HMRC. When my DM died a solicitor administered the estate but I was told even though there was
no IHT this had to be confirmed by HMRC before going to the probate office.

7% for being an Executor ! UK is zero, just expenses.
All the more reason for not paying for his alleged mistake.

From the majority of comments, I got the impression it was to gather evidence and if it proven to be correct, pay the bill.
I'm not sure calling your in-laws strange is relevant or is it to imply they weren't to be trusted with the money?

OP is not in UK

there Can also be income tax due and tax on income earned during the administration period.

If brother in law was the executor why did the lawyer need to get involved, I can't think a lawyer would agree to releasing funds before all debts and tax were paid.

How Wills are executed are a matter of law.

The people who act as executors have to apply for Probate which allows them to deal with the deceased persons estate. There are rules they have to follow. The Office of Public Guardian are the Government body which sets out the advice and rules they should follow.

He should seek advice from the Office of Public Guardian if he has made an error in dealing with the estate.

Everything needs to be clear, transparent and upfront to all beneficiaries.
What tax is this being demanded ? You cannot wind up an estate without all tax being paid.

I would want to see sight of any demand.

I would not pay out anything. And seek advice.

Grow up and stop being so nasty to OP.

1. It would be weird to have probate granted without outstanding tax being paid
2. its very odd that this has come to light so long afterwards
3. All beneficiaries should have been given a statement of account and not simply had a sum of money deposited in their accounts
4. how is the bill an exact amount of £40,000 how do you know he’s not simply asking for money or if there really is a bill, it’s being split fairly?

Id be asking for a full statement and the tax office reference and copy of the bill before parting with anything.

would you actually be a big fan of a brother that hasn’t bothered with you or your children for over a year!

OP IS NOT IN UK

I wouldn't be handing money back, 2 years after the event, based on a phone call. If indeed there's money to be paid, then you need proof of that. Personally, I'd seek legal advice. Your husband's brother needs to provide documentation to prove that money is owed. It sounds harsh, but unfortunately some people, blood relatives or not lie, or are economical with the truth.

I imagine he's just run out of money ...

I only have experience of one estate and I was not the executor.
My understanding is that any inheritance tax due has to be paid before probate is granted. The only problem I know of is that a deceased's house could be sold for a higher amount than previously valued, in which case an extra tax sum could be demanded.
Whatever the reason the executor should produce appropriate accounts.

Your DHs family sound very fractured. But, if an error has been made, however badly handled it has been then I think it should be paid back. I know it’s a sickner but if you pay it back you have the moral high ground and they can’t bitch about your family.

having been an executor twice I am very jealous of a system where you get 7% of the estate as a fee

in the UK, you don’t get grant of probate until you have paid the inheritance tax bill but the estate could still be liable for income tax, capital gains etc until finally settled.

until you have the all clear from the tax authority you shouldn’t fully distribute the estate. There will be three rounds of distribution to my mum’s estate - financial
assets and trusts, property after sales, and then anything else remaining after final solicitor fees and final taxes.

we have just paid CGT on the house and done yet another income tax return.

it’s a hideous complicated job even with solicitors

this is not to say that you shouldn’t be concerned or ask for proof. We executors communicate monthly with the beneficiaries so they understand the situation and they are well aware that funds are being kept back until HMRC sign off the lifetime tax return. We would happily provide estate accounts and property the solicitor would speak to any potential beneficiaries

So the estate is worth around $2.5 m - and there was a law firm? So why is there a mistake? Incompetent lawyers?

actually, it was my first thought, but then I'm very cynical.

This is a man who lived with his mother for the last 25 years of her life. Paid the electric bill instead of rent (in an area where a one bedroom runs 1500/month) and worked full time. Works in a good job and was quite snide about our finances (I stayed home until my boys were in full time school & then went back & retrained).

He claims he had to pay out from Probate when he did because he had to buy somewhere to live! By anyone's math he should have had quite a healthy bank balance.

You see, this is what I thought happened. I have heard of others who got a lump sum and then a smaller amount later when everything was done and dusted.

Our only experience with wills up until now had been when both our Mums were widowed. They inherited the houses and had accountants do the final tax returns for our Fathers.

My friend's Mum just added her to the title of the house when she was widowed. That way the house went straight to her daughter with minimal issues as there were just final taxes to do.

We knew it would take a while for the Probate to be done because a neighbour died and it 2.5 years before her sons were able to sell the house. So, we weren't in any rush for the money. My husband actually joked that we might not even see it due to his heart condition and if he'd live long enough to see the Estate settled.

I would seek independent advice. With that you will need the relevant documents from BIL.

he might have stuffed something up in the way he handled things, so best get someone proper to take a look.

I was an executor on my fathers estate (and mums). When their house was finally sold I settled with my brothers but, being freelance was not made aware of the exact capital gains tax until 18mths after the house was sold and I'd paid everyone off. Didn't have the heart to ask for anything back from brothers after so long so I ended up with the unexpected 10k bill. Painful at the time and the solicitor could'nt tell me what taxes were finally due as he didn't know until my accountant did my own accounts and tax bill. Often solictors do not clarify CGT liability as there are too many other factors to consider.

No income tax due from a beneficiary on an inheritance doesn’t mean there are no probate taxes due from an estate. Your bank was saying you don’t owe taxes- that is completely different from the estate owing taxes or probate fees. Finally, many executors who are relatives don’t know that you still have to file a final income tax return on behalf of the deceased. Then if the estate drags on, you have to file estate tax returns on income and capital gains each tax year too.

I think yabu to dismiss the request out of hand as it is quite possible funds were prematurely released and taxes are outstanding. I would contact executor and ask for the accounting information or copies of tax returns/tax due letters that support the request. I certainly wouldn’t send the money on his say so alone.

I’m sure being her live in carer meant he ensured there was an inheritance for you all. If he hadn’t lived with his mother, the money from selling her house could be going to the council to pay off her care home fees instead.

@SugarandSpiceandAllThingsNaice Were the two brothers who lived with her carers though?

The OP says that “My husband paid for his Mum's social care and a companion to be her driver as his brothers were too busy to deal with it.”

I’m not sure what she means by social care but it sounds as if their Mum relied on paid help, not them.

This seems the best course of action. You could suggest this to your DH. If there really are taxes to be paid then all brothers should pay equal contribution but executor should sent proof.

I really don't know why some posters gave you such a kicking @naffusername I didn't see any suggestion from you that your husband should not pay if this money is truly owed..

A lot of suggestions from other posters (me included) to check if it is really owed however - I have certainly been on the planet long enough to know that wills, estranged families and money can lead to all sorts of dodgy deeds and underhanded behaviour!

I doubt any of the people being arseholes would actually hand over 10K without checking if they actually needed to do so!!

It's usual to hold back monies until it's certain that all expenses relating to the estate are sorted and then you usually get a second payment of the residual amount. It sounds like the brother didn't really know what he was doing and was put under pressure to release all the money so that the others could buy property.

I agree that you need to see ALL the paperwork. You should have had a letter breaking down who got what etc and any expenses such as funeral or legal ones. You currently don't know if you really do owe 10K nor whether the others got more money than your DH — or whether your DH is being asked to pay the entire tax bill because the others have used it as house deposits!