Executor of will Questions

[Jasper pal]

Hi All,

Just looking for some assistance on this. My Mother passed away last January and left her entire estate and residue to me however she left a sum of money to a friend which amounts to over 80k. She appointed me as the executor and I with the help of a solicitor will be lodging the probate this month as i understand it must be lodged within a year. The Estate consists of really only a property (The Family Home) there was no cash or savings left behind when Mam passed. The property has been on the Market since last May and has had a lot of viewings but no offers, which has been no surprise due to the current economic climate. My Mothers friend has indicated that they want the sum of money by next month however i do not have it myself and feel that I will not qualify for a mortgage to raise it on the family home. I also live in my own mortgaged property which is to tight to release equity and am also unsure on what stamp duty implications are in place for me on the family home. Does anyone know what i can do in this situation....... quite worried about it!

 

[terrysgirl33]

I'm sorry to hear about your loss. If the house hasn't sold yet, you may just have to drop the price again. If there isn't money in the estate to pay him, then your mothers friend doesn't get anything as far as I know, it would be worth consulting a solicitor on this point though.

 

[Towger]

terrysgirl33, I would have thought the same. If the will was worded I leave my house to A and 80k to B, but the 80K was gone when B gets nothing.

 

[Padraigb]

terrysgirl33, I would have thought the same. If the will was worded I leave my house to A and 80k to B, but the 80K was gone when B gets nothing.

Jasper pal did not say anything about the house being a specific bequest.

 

[terrysgirl33]

Paidraigb, I know what you are saying, but can he demand his money whether or not the house has been sold yet?

Jasper, are you trying to hold on to the house for the time being? I'm just thinking that if the house is empty it may be safer to sell it as the house may be vandalised, or may start to need repairs so that you end up trying to maintain two properties (at least I would be afraid of that). The house will sell (I hope!!) so long as the price is right.

 

[Jasper pal]

Thanks for the replys, I have a flexible tennant in the house at the moment that is looking after the property in exchange for a lower than usual rent. We have dropped the price a few times now but the worry is no offers. I am just afaraid that this person will demand the money next month and I will have difficulty raising and also nervous of what other possible costs may appear i.e Stamp duty, CGT etc...

 

[mf1]

Its likely that the 80K was the specific bequest and the residue ( i.e. the house ) was what was left over.

I am surprised that the beneficiary is so pushy - but then perhaps I should'nt be.......

I would simply stick it out - when the house sells the money will be paid.

mf

 

[Padraigb]

Is the house unsaleable, or have you failed to judge the current market? I know it hurts to drop the price, but might you have judged it wrongly, and still be too high?

Have you thought of asking the bank for a loan secured on the house, of which you would be the beneficial owner once the bequest is paid? The rental income could help service the loan.

What are the likely consequences if you do not pay the bequest next month? I don't want to imply that you should be unfair to the other beneficiary, but perhaps you could come to an agreement, possibly involving paying some interest. You have an obligation to deal with the estate in the best way you can, but no beneficiary can dictate how exactly you do things so long as you can show that you are making an honest and reasonable effort.

 

[Jasper pal]

padraigb, thanks for the reply, I have asked the bank for financial support and they have turned me down. The person in question is only talking to me through their solicitor and is being irational and demanding. I have done my best to mediate but am anxious on their actions next month. The house price is lower than the others in the area to even attract viewings and that has happened but no offers at all, it is quite a good area too. It is all quite upsetting really, the person in question was living in the property when Mam passed and even took things from the property that didnt belong to them, i have made every effort to deal with them in an amicable fasion and failed.

 

[sam h]

It would appear, from what you say, that the person has been left €80k and you have been left the balance of the estate (which would appear to just be the house). Therefore, if the estate is worth €100k, you get €20k and if the estate is worth €200k, you will get €120k).

As far as I know, they will have no abilty to persue you personally, once you have done your best endevour to sell the property at a reasonable price & the fact you are offering it at a price lower than other in the area, would appear that you have. If this is not an option for you (as the selling price will only affect your inheritance, not theirs) then you will need to raise the funds personally to pay them. However, given the current housing market, the property value is not likely to go up in the foreseeable future.

You may need to check with your solicitor to see how long you can just leave it on the market - you may need to put it for sale at auction and accept whatever price you obtain. Then pay the other person their portion and you retain the balance. (I'm not sure if you are legally obligied to do this, but I did it to cover myself.....when settling with them, advise them, in writing, that they may be obligied to pay inheritance tax on the amount and that it is their own personal responsibility to ensure that they check if there is anything owed to the revenue and to pay what is due).

 

[mathepac]

... when settling with them, advise them, in writing, that they may be obligied to pay inheritance tax on the amount and that it is their own personal responsibility to ensure that they check if there is anything owed to the revenue and to pay what is due).

samh - this can't happen in this case.

OP has a solicitor and the solicitor will ensure as part of the process of settling that the appropriate taxes are deducted prior to making any bequests, otherwise the solicitor can create a liability for the executor. This is the reason PPSN's for beneficiaries and executors are requested prior to probate.

OP, I'm sorry to hear of the troubles you are having. The beneficiary of your late mother's will sounds unreasonable.

Once you take all reasonable steps, with appropriate legal advice along the way, I believe you have little to fear. Please ask your solicitor to seperate and track all the costs of dealing with your late mother's friend's legal shenanigans from the other work on the estate and deducts these costs, and the taxes, directly from whatever bequest is eventually paid to him.

Maybe a note to that effect between the solicitors concerned might help restore some sense of propriety.

 

[FKH]

Jasper, to clarify, did the will leave €80K to the friend and the balance to you? If so they can only get the €80K when the assets of the estate have been converted to money. If it was me I would have no intention of getting a loan to pay them the €80K, let them wait until the house sells. Their concern is probably that you want to hold the house for years until the price goes up whereas they will not care how much the house sells for so long as they get their money. You should probably let your soliictor handle communication with her.

A curious thought would be that you offer her a reduced sum if you can borrow it to waive her entitlement under the will if she needs money badly. I'm not sure if this is possible, just a random thought.

 

[mathepac]

.... If this is not an option for you ... then you will need to raise the funds personally to pay them...

I'm sorry, I deleted this from my previous by mistake.

This is totally unnecessary and OP would be ill-advised to go this route. Talk to your solicitor.

If the other beneficiary needs money, let them try and raise a loan for themselves secured against the bequest. Their own solicitor should be in a position to provide the necessary documentation in support of an application.

... If it was me I would have no intention of getting a loan to pay them the €80K, let them wait until the house sells...

Agreed.

 

[Jasper pal]

Thanks for all your help guys

 

[putsch]

As far as I remember a beneficiary is entitled to interest on a bequest if its not paid within a year of death. I'm not sure what the position is in your case but you can imagine circumstances similar to yours where the residuary beneficiary/executor is in no hurry to pay off the bequests - so there has to be a mechanism to protect the quick payment of the beneficiary's bequest.

 

[Stronge]

I feel that you should talk to your solicitor about this matter. In my opinion you have done all you can to get a quick sale. If the house does not sell for some time there is not alot you can do. I dont see how you could have to pay interest after a year as you are not holding up the sale of the house. Do not enter into any further talks with this person leave it to your solicitor to deal with. I do not see any reason why you should get a loan to pay off this person, they are just going to have to wait until the sale goes through.
May be some legal person on the site could let us know what the Legal position is.

 

[mathepac]

As far as I remember a beneficiary is entitled to interest on a bequest if its not paid within a year of death...

That's not true as in complex cases it can take more than a year to gather / liquidate all the assets.

Interest of more than €100 that accrues while the proceeds of a liquidated estate are "resting" (Fr. Ted ) in a solicitor's client account may be payable to beneficiaries, is that what you are thinking about?

The 1 year rule applies to taking out probate, as OP has already mentioned.

 

[Bronte]

OP what has your solicitor advised you to do. There is no reason for you to borrow money to pay this person. You seem to be worried about taxes, there will be no stamp duty on the sale of a house and the CGT is unlikely as you say the price has dropped, has your solicitor not given you an idea of what if any taxes may be due. As it's only one asset when it's sold all the costs and debts and funeral expenses will have to come out of that before the money can be distributed. Your solicitor should be advising you on how to deal with this person. What would happen say if you borrowed 80K to pay this person and you were left with 50K out of the estate. Just because someone bequeaths 80K to someone doesn't mean they get it if it is not there.

 

[putsch]

Just coming back on the one year rule for distribution of assets - I can't find my books on this but for most legacies interest is payable (or at least can be demanded) if legacies not paid. The only quote I can find is this from Wills.ie but I have had personal experience of interest being demanded and obtained by beneficiaries where legacies are delayed

"Q. Can I postpone taking out a Grant?
YES, if you are the sole beneficiary and executor. Personal Representatives are allowed an "Executor's Year" from the date of death in which to complete the administration of an estate. Interest could otherwise become payable to beneficiaries on some gifts."

I'm not suggesting that the OP would definitely be liable to pay interest but the possibility should be kept in mind. Of course he should be getting specific advice from his solicitor.