Conundrum re-future pecuniary legacies

Trusts Discussion
1

Spouse died in 1999 giving life interest in her home to her husband followed by a life interest to her son followed by a life interest to a friend on whose death the property passes to 2 people absolutely.
The next clause, which is not linked in any way with the trust of the property, gives a number of pecuniary legacies which are “ to be paid on the death of my son”
Residue is given, subject to the payment of debts and testamentary expenses ( no reference is made to payment of legacies ) to the husband absolutely.

The husband died in 2002 intestate and his estate which has not been administered passed to his son. The Son has now died. Is the provision concerning the legacies valid and if so where do the funds come from to pay the legacies bearing in mind the the only part of the estate in which he had an interest was the property. I am acting for the personal representative of the son. The executors where the Son and a solicitor. Probate was granted to the solicitor with power reserved to the son so that the current trustee is the solicitor. My firm had no involvement in the making of the Will which has given rise to this query.
Patrick Moroney
Bwl solicitors

2

It is a rather unusual provision, and I wonder if the original instructions might be available to help enable an understanding of the testatrix’s intention.

Unless they are specifically charged on the property, it seems to me that the legacies payable on the death of the son are a gift out of the estate generally.

If this is so, then it effectively ties up residue during the son’s life, at least to the extent it is required to satisfy the legacies. Interest on those legacies would not start to run until the date of death of the son, with any income from the retained assets being due to the husband as residuary legatee (and his estate).

If the legacies were intended to be payable out of the property, this could well require its sale, which would undermine the life interest to the friend

If, as I believe, they are payable out of residue the legacies are a valid deduction from the husband’s estate for IHT purposes (perhaps discounted for the fact that they were not payable during the husband’s lifetime). HMRC’s response to the claim might be instructive.

Paul Saunders