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Where Taxpayers and Advisers Meet

Distribution of estate question

Posts: 10
Joined: Wed Aug 06, 2008 4:01 pm

Distribution of estate question

Postby caroline234 » Wed Oct 11, 2017 8:39 pm

I apologies, this isn't really a tax question but I'm wondering whether anyone knows the answer please?

I have completed the administration of my father in law's estate. There were 4 executors (the children) and the beneficiaries were the 4 children and 12 grandchildren.

4 of the grandchildren are under 23 and the Will states that a trust should be set up until they reach 23. However, I have taken legal advice on this and because of the wording of the Will, the monies can be paid directly to the parents to hold (or spend for the child) until they reach 23. A Receipt Deed absolves all responsibility of the trustees (executors) which is to be signed by the parent accepting the money on behalf of their child. This avoids complicated and costly Will Trusts from being set up. All executors agreed to this process.

However, one of the executors is now unhappy with this and wants all the over 23s to be paid their share immediately (he doesn't have any under 23s). He will then resign as a trustee of the Will. I am not happy with any distribution to be made until everything is distributed at the same time. He has been particularly difficult during the whole administrative process.

The advice I'm after is can some beneficiaries be paid before others? (they are all residual beneficiaries) or can an executor refuse to sign the cheques until they are all written. It seems unfair that some will receive their money before others? I am concerned that he will refuse to sign cheques for the others, or drag out resigning as a trustee, leaving the money for the 4 under23s in limbo?

Any advice greatly appreciated.

Many thanks

Posts: 359
Joined: Fri May 16, 2014 3:47 pm

Re: Distribution of estate question

Postby AGoodman » Thu Oct 12, 2017 11:53 am

The over 23s have an absolute right to the monies and should be paid as soon as the administration is complete (arguably they should receive interim payments when possible).

The under 23s have no rights yet, other than possibly to income from age 18 - this depends on the terms of the trust. There is presumably a discretion to pay to them prior to this (under s.32 Trustee Act 1925 if not in the Will) although power to pay to parents usually only applies to under 18s. If you pay it to the parents under such a power then the children have an absolute right to the money at 18 (i.e. they can demand it from their parents).

So, if one trustee doesn't agree to pay out to under 23s then no decision can be made and the payment to the over 23s has to be paid regardless.

It may not seem entirely fair to you but it was of course what the deceased wanted. The cash is not "in limbo" so much as the trustees just hold onto it until they reach 23. They can advance parts of it as desirable.

If you are set on this course of action then the simple remedy seems to be to pay out to over 23s, the T in question resigns then the remaining 3 Ts agree to distribute to the under 23s. The timing makes no difference, particularly as the difference could be a matter of days. You should of course be confident that this is for the benefit of the under 23s themselves and the parents will not use the money to pay for things that the parents would otherwise have funded themselves.

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