Guidance needed in interpreting a will

[GuidanceNeeded]

I have name changed for this as the details given here might make me recognisable to my family.

My dh and I have been left as executors of my dsis's will. It was a will she did herself, using guidance from a will making kit, properly witnessed and it has been accepted by all of the family. Probate has now been granted and we can distribute the estate to the beneficiaries.

Our difficulty is that she has left a 'residual gift' to her nephew and nieces. The exact wording is 'I give the residue of my estate to my nephew and nieces, x,y and z, one third to each.'

As all of them are minors aged between 7 and 16 we are concerned about how best to distribute the funds to them and wondered if there would be any legal interpretation of this i.e should we set up accounts in the children's names for the cash that they can access whilst still minors or an account not accessible until they are 18 or just put it into their existing accounts that can only be accessed by their parents.

Our main concern is that my other dsis has already stated that she wants the money for her children to go into their existing accounts, that only she can access, so that she can use some of it to take them on holiday. She would presumably also pay for herself and possibly her current dp out of their funds as well.

We understand that she sees this as an opportunity that she would not otherwise have for a memorable family holiday but we feel in a very difficult position that this may a} Not reflect what the will specifies about the gift going to the children and b} Not be in the best interests of the children who as beneficiaries we as executors have to act for.

We don't know if we are overthinking this and don't relish the potential fall out of us not doing what dsis wants but just want to do what is best for the children. The amount involved isn't huge but would certainly help towards college fees or be a good start on saving for a house deposit and we feel we have been put in a position of responsibility about who gets access to it and potentially when.

Any advice would be very welcome.

the money left to children is usually put in trust funds which are released to them when they are 18 or 21 up to people who are left to organise it not down to parents wanting to spend money it been left to help children have a bright future .

My partner's grandmother died last year and left a fund for her current great-grandchildren. It's in a pot somewhere and each child will get their share when they are 18 (first child will get 1/8 of the pot, second child 1/7 etc) I always thought that's what was normally done.

I think it would be up to the executors to decide if they would allow some to be advanced to the child for something specific.

I agree that it goes in trust until they are 18 or 21.

My dd was awarded an amount by the court for an accident - the money has to stay in the court funds earning interest until she is 18.

there is no way that money should be used to finance a family holiday

It is actually your job to make sure that doesn't happen and if that means the money doesn't go to the dc until they are 18 - then so be it.

I wouldn't want an 18 year old to come back on me for not doing my job properly and giving my mother the money to spend.

Most def 18 - no earlier. Your Dsis left the money to the children, NOT to the parents/partners to spend for them on what THEY saw fit.

I agree with everyone else. The money has been left to the children. You are the executors, not their mother.

Set up accounts for each of the children, to be held in trust until they are either 18 or 21 (up to you). Depending on how much it is, it may be better to leave it until they are 21 or even 25, and less likely to blow the lot on motorbikes, drugs and drink unsuitable things.

To be honest I would spend a little money (which you should be able to charge to the estate as exectors expenses) getting a hour or two's legal advice from a solicitor who can advise on the legal position. You have a high standard of care required as a trustee so its important for your own protection but also it would probably help your position with your other sister if you can say "we've checked with a specialist".

Thanks everyone for your replies. You have all basically said what we feel - that the money should be put away for when the children are 18.

Ivykaty - you have hit the nail on the head that we want to do our job properly now so that the beneficiaries won't need to come back on us at a later date, for screwing it up.

We would probably like to get some legal advice but my dsis left clear instructions that she wanted no solicitors involved in the will { she had had bad past experience with the legal profession during her divorce } so we would like to honour her wishes as far as possible but will seek legal advice if it is neccessary - hence posting here for advice in the first instance.

As you have all agreed with our interpretation of the situation and it seems to be the most prudent way of doing it, it gives me reassurance that we are not overstepping our brief, which is what my remaining dsis may accuse us of.

It is all very awkward but I think my late dsis stuck me with the executor's job as she knew I have a thick skin and that I would carry out her wishes, however unpopular it makes me as parts of her will were quite contentious.

I think you need to get some legal advice. Minors are incapable of legally owning property, so generally an outright gift in a Will gives rise to a bare trust. This means that the minor is entitled to receive income from their fund (which trustees can apply for their maintenance or benefit at their discretion) and will be absolutely entitled to all the income and capital at the age of 18. If you want entitlement to capital to arise later than 18 you will need to ask a solicitor to vary the Will to that effect, as I don't imagine the WIll includes the power for you to do so since it was home made. It's all pretty straightforward (I'm not sure of the sums involved, but seeing you/writing a letter of advice and maybe doing a deed of variation if you want should only take a couple of hours of a solicitor's time, and you could see someone pretty junior for this) but I would suggest you get some simple legal advice (if only to present your other sister) as what you don't want to happen is for your nieces and nephews to reach 18 and come back to you asking 'Where's my inheritance?' if your sister has spent it on a family holiday. You basically need to cover your back.

Exactly what crumpetsolo said.

If I remember rightly, if you hand the money over to an under-18, they cannot give you a legally valid receipt for the money, so when they turn 18 they can demand it again, and the trustee is personally liable to pay it.

I would explain to your dear sister that you are not able to habd over the money to an exsiting acocunt - it must be out into an acocunt with her dc names and two other adults as the money must not be accessed till the dc is an adult.

Write or tell your dear sister the following

Being named as an Executor in a Will brings with it complicated and sometimes onerous duties when someone dies and often takes months to complete. It is important to get it right because the Executor or Administrator is ultimately liable for any mistakes made.

An Executor can be held personally financially liable for any loss resulting from a breach of their duty ? even if the mistake is made in good faith.

Please understad dear sister that I have to make sure that my sisters wishes and your childrens inheritance is dealt with and
Correctly distributing the residue of the estate to the beneficiaries is what I have to do.

Your late sis may not wanted solicitors involved but but I think when it comes to this issue a small amount of advice will be invaluable

Thanks again for your further replies.

The wording of the will just says 'I give the residue of my estate to my nephew and nieces, x,y, and z, one third each' so that is the only instruction we have.

We had thought we could just set up some sort of account for the children that they can access at age 18 but it sounds like it might not be that straightforward if a trust will need to be created. If we as executors would need to be the Trustees it could lead to years of bad feeling with my dsis if we have to continue to make decisions over use of the income..

I think we do need to get some legal advice but even a couple of hours will cost probably £200 and I don't know where we stand about using funds from the estate for that as my dec'd dsis has specifically left instructions that no solicitors are to be involved. It is a lot of money for us to have to pay ourselves for advice.

Ivykaty thanks for that - I will have to explain things to my dsis as it has occurred
to me that she could be already booking that holiday and we will be in even more trouble with her when there is no money forthcoming.

Your late sis has been very unfair to you here. She has used a poorly drafted will and yet doesn't want any solicitors involved? I can understand her not wanting solicitors as the executors due to cost but frankly unless there is anything expressly in the will about legal advice not being a valid expense of executors I can't see that it ISN'T a valid expense IYSWIM, particularly given you are seeking to understand your legal obligations. However you may find that you can find a local probate solicitor who will look at the costs issue for you quickly for free.

Yes, I agree entirely Axis. Dsis has left us in a difficult position.

There is nothing expressly in the will about expenses for legal advice but in the additional notes she left for the executors she states several times, 'Please, no solicitors'. We have carried out her wishes as exactly as possible { which at times has been very difficult } but I agree that on this point, it looks like we will need to seek advice. As well as fulfilling our obligations as executors, we just want to do whatever is best for the children.

Thanks again to everyone who has replied - it has been very helpful and has reinforced my original inclination that we need legal advice and that I am not just being a control freak because I feel it warrants more than just bunging the money into the children's existing accounts,

You are under a legal duty to hold the funds for the children until they are 18. you should divide the residue into three and invest it with your co-executor and attribute each investment to each child. (eg in savings bonds with NS & I or other safe inventments vehicles) You should not put the money into their existing accounts as you also have a fiduciary duty of care to deal with the funds in their best interests. On top of all other points, you would not know whther these accounts are the best in each case and you also now know that parent of a child has intimated funds would be used not solely for childs benefit. If you release funds knowing this then child would have a legitimate claim against you (not a good thing in a family IMO)

When the child turns 18 then you can either cash in the investment and hand over the proceeds or sign over the investment to child, depending upon naturer of the initial investment.

if you hand over the money to parent you are in breach of trust and child can legitimately claim losses from you and you cannot obtain a valid receipt in any event from a child under 18.

You have been appointed executors for good reason - you clearly have integrity and I would resist any suggestion from any thrid party that you compromise that integrity.

And you can have that advice for free!

Thanks for that LittlePushka - sounds like you { like the others who have kindly replied to my thread } know what you are talking about.

You may just have saved us the cost of a solicitor.

Could I also ask you, or any of the other helpful people that have contributed, about the point that crumpetsolo raised about the gift giving rise to a bare trust - would the investments methods you suggest discharge our duties without the need for a Trust ?

Thanks again for your help and for saying we have integrity - it means a lot as we are determined to do our best in the fairly difficult situation we have been left in.

Interest from any investments you make for the children should be applied back into the investment for their (eventual) benefit However, if you agree with your co-executor then you can (subject to what is in the will) give then hald of the interest for education or maintenance purposes. IMHO then unless the investments are substantial enough to produce a reasonable income, then if I were you I would not bother worrying about applying interest and probably not even then unless specifics were required (eg musical instrument or ballet lessons..or whatever ).

I am big on integrity,...and I am big on folk who are big on integrity.

PS It is the will generally that creates the trust IYSWIM

Thanks again for that LittlePushka, you have been really helpful and it's much appreciated.

Will just said any residue to go to kids in equal proportions so nothing about a trust so sounds like we can just do as you have suggested. It isn't a huge amount so the interest won't be significant enough to do much with, other than apply back into the investment.

Thanks again for the kind advice - like you I am big on integrity even though it doesn't always make you popular

If the will was professionally drawn it will have said somewhere words to the effect of (and I paraphrase here, massively)"give my estate to my executors upon trust to pay debts and then in accordance with this will/or then to XYZ.

This is the trust.

No magic to trust creation!

Thanks again, LittlePushka - you have been really kind to keep replying .

Unfortunately the will was written up by my dsis. She used a will making kit but didn't include much of the detail that the kit suggested so no trust was created.

I found the kit amongst her possessions and had the bright idea to look at it this weekend and there is a section about gifts to minors which confirms the advice that you have given me. The only extra detail that it included was that the executors have the power to advance up to half the capital before the child reaches 18 if we deem it to be in their benefit. I will need to have a conversation about all of this with my dsis and can't see how I can't mention the discretion we have over half of the capital.

It is going to lead to exactly the situation we wanted to avoid - my remaining dsis asking for some of the money for her childrens' benefit and us having to potentially be the bad guys and refuse. It is not going to be conducive to family harmony especially when it will be 10 years before her youngest is 18.

I wish my dec'd dsis had discussed some of this with us rather than just leaving us with a fait accompli.

Could you tell your sis that the will stipulated that any capital advanced by you has to be for the SOLE benefit of the child - so if they wanted to use it for a family holiday it would only pay the child places? Might help?

The law creates the trustees responsibilities automatically and it will "fill "in" where the will is not specific. If the statutory power of advancement of up to 50% of the capital is not transparantly exercised for the sole benefit for the child, you lay yourself open to critisism from the beneficiary (and rightly so IMO) - especially as you are fully aware that the advancement may not truly be for beneficiaries benefit.

I understand the potential family problems...really I do, I see them so often. But stay true to your dec'd DSis wishes in that the left the money entrusted to you for these children - not to their mother, and did not appoint their mother. In my very humble opinion, executors are not appointed without a good deal of soul searching...especially if there are a number of siblings/friends from which to chose

If you are uncomfortable advancing money before 18 for WHATEVER reason then to do so goes fundamentally against your role. Go with your instinct and your beneficiaries will (in my experience) thank you for your judgement. It is my personal opinion that aside from very obvious special needs, a legacy is always appreciated more at 18 than at 10 ( and will said child remember holiday in 8 years time?).

Hope this helps support your instinct.