Beneficiaries haven’t received anything

[Teacakeorbap]

Hi All,

To set the scene, my mother and her cousin looked after an Aunt for a number of years (cooking, cleaning, personal care, admin, daily visits etc). They did it solely because they adored this person.

The Aunt had money and they were aware distant family members benefitted whilst she was alive (she would send them cheques for large sums of money, reimburse them travel costs for visits etc).

My mother and cousin knew these other family members were named in the will but didn’t expect to be named in the will themselves and they were absolutely fine with this. They did all the care because they loved her.

Howevr, a few months after their Aunt’s death it was mentioned by one of the named relatives (and executor) that they had been named but there wasn’t enough money and they’d be lucky to get £5. They briefly stated the money was “pro rata’d” but wouldn’t elaborate and hasn’t spoken to them since.

Mum’s cousin wanted to see the will so I’ve downloaded it and it shows the amount available was £250k, £30k short of paying everyone named in full. Yet they haven’t seen a penny. Sadly, a brother is also named who the executor knew was terminally ill at Christmas and never told. That person has since died. He would have appreciated just knowing that she’d thought of him.

When the estate is short of the full amount, how should an executor decide how much everyone should get? Mum and Aunt should have had £20k each.If they are owed anything, what should happen to the amount meant for the brother?

Also, are taxes paid after the grant? I.e. is the amount listed in the grant before or after tax?

Mum is fairly shaken by the thought that the executors may have been trying to pull a fast one, but also isn’t and doesn’t want to look money grabbing.

If the estate was worth only £250k then there would have most likely been no IHT unless the lifetime gifts had used up the tax free allowance- the nil rate band (NRB). The NRB would have been up to £325k if she was not widowed or up to £650k if she had a predeceased spouse who left their estate to her. Lifetime gifts would reduce the NRB.

It seems from what you have said that she and the others we entitled to a fixed legacy rather than a share of the residue? Unless some of the legacies are stated to be in priority to others the they would all be reduced in the same proportion (after payment of tax funeral and estate administration expenses). Eg everyone would get 80% of the value. There would be no residue so whoever was entitled to that would get nothing. If the brother who died was alive at the time the aunt died, you need to check the will for any survivorship period (often 30 days, could be longer) and if he survived the relevant amount of time, his estate is still entitled to the legacy even if not paid by the time he died. He was entitled to it when he died.

who is the executor and how long ago did the aunt die? It can take many months to sort out an estate. Have you asked the executor what the situation is?

@22mumsynet thank you!

The lady who died never married so the beneficiaries were nieces, nephews and friends. She died in May last year, the house was sold soon after. The brother died in January so quite some months after her.

The executor is a nephew but when asked what he meant by pro rated he told my mum he needed a cup of tea and left. Hasn’t spoken to her since.

My mum, before seeing the will this week, had arranged to meet the executor for a cup of tea but is understandably nervous now. I thought it would be useful for her to have all the facts before going.

The rules are here
www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm12086

So it could be that he is intending to do the right thing but a year is not an unreasonable time to administer an estate. Hopefully the meeting will be him saying how long it has all taken and letting her know what % everyone will get. He should provide an account on distribution as the legatee is not receiving the full legacy. Has he appointed solicitors to act or done it all himself? If he says she isn’t getting anything, she needs to ask why.

They have been naughty and stolen your mother’s share - and let’s be clear about it, this is theft. I suggest the nephew executor is told he needs to rectify everything asap otherwise he will be reported

It’s probably just not settled yet and will get sorted soon. Wait to get upset till he’s said what’s happening.

This is taking too long! The house is sold. That’s usually the biggest issue. Is most of the money from the house? It’s a poorly drafted will - should have been % to each beneficiary. The reason she had money at all was free care by the sounds of it. I would start asking what’s going on. Your DM has been taken advantage of and it’s set to continue. Any idea if a solicitor is involved? You cannot just sit back and do nothing!

Are all the bequests fixed amounts? Normally there are some but the balance of the estate is then specified to allow for variations. Were there assets to sell which perhaps did not achieve the estimated value?

This is supposition on your part. A more sensible approach is to ask what the estate value is after expenses and to check that rules were followed where estate value is insufficient to cover all bequests. Rules and method are available on gov.uk

@LIZS yeah, all fixed amounts. A section at the end which discusses residuals but as there wouldn’t be any the beneficiaries of that wouldn’t get anything extra.

There was a house to sell but they did that remarkably quickly (sold it to a relative who was a beneficiary within a couple of months).

@Teacakeorbap Hmm. Sold at market value or discounted? That would make me suspicious too. What did it make and was it a fair price? You do need to start asking questions.

“There was a house to sell but they did that remarkably quickly (sold it to a relative who was a beneficiary within a couple of months).”

Hmm. And who, pray, valued the house before it was sold to a relative? This whole thing sounds more than a little shady - and I’m reading this thread with interest because of a similar family situation. It is the duty of an executor to act in the best interests of the estate and avoid any conflict of interest, and also to distribute assets to beneficiaries as outlined in the will.

Do you know what the house was sold for? Is there a chance the house has been sold at a considerably reduced rate to the relative who was a beneficiary so there’s less money to give to your mum?

House sale prices are public information, should be easy enough to find that out and see if the value looks right.

It does sound like something odd is going on if the house was sold some time ago.

I think your mum should meet with the executor, ask for a full breakdown of what’s gone on, and if she’s not happy with the answers she gets then she should speak to a solicitor for advice.

This is definitely the type of case where speaking to a solicitor is the best way to proceed.

We were told what it was apparently sold for but I can’t find the sale price listed online yet.

Mum had plans with her cousin to meet the executor just for a catch up but in light of what we’ve recently learnt she’s planning to ask for the accounts and full explanation of where the money’s gone. Her cousin’s going with her and by all accounts is pretty annoyed.

If nothing else, not telling the brother before he died and not providing any details is just wrong.

I’ve advised her to check her home insurance for the details of her legal cover.

@Teacakeorbap have you requested a copy of the Land Register? This should have the sale price etc. if it’s been updated. Might be worth waiting 11 days for the next update on Zoopla etc. as once it’s on there its updated. https://www.gov.uk/search-property-information-land-registry

You can also sign up for the property alert service (it’s free) https://www.gov.uk/guidance/property-alert. This would let you know if there were any actions against the property in the future e.g. if they did it up and sold it quickly.

Depending on how the will was worded your DM may well not receive anything. If I were her, I would check the Land Registry to see how much the house sold for - an executor is duty bound to get the market value of a property where other beneficiaries are concerned. Once you have that, I’d make an appointment with a solicitor for advice. Take the copy of the will and probate plus the land registry document and ask them to interpret it. Do this Before seeing the executor so she has the correct information. Posting a redacted copy of the will here might get more accurate advice too.

@Teacakeorbap Was that a reasonable price? I think you need to get a much firmer grip of this. What valuations were sought? What have similar properties sold for. Getting annoyed won’t get anyone very far. Taking advice and action might.

You don’t need to order any documents from the Land Reg. The simple online search will tell you the price it sold for.
https://search-property-information.service.gov.uk