Executor Recalling Assets?

Trusts Discussion
1

I am an acting in an estate where a property was assented by three executors to two trustees to be held on behalf of various beneficiaries. Unfortunately, notice of a 1975 Act claim has now been received (within the six month time limit). The trustees are in principal prepared to transfer the property back to the executors. The issue is what would be the nature of that transaction? There should be no CGT implications due to the value and time involved, but can the trustees simply transfer back recognising that the executor acted in haste? To complicate matters, one of the beneficiaries lacks capacity, (all other beneficiaries are agreeable to the ‘transfer back’). It is a low value estate and there are no other assets other than the property worth a little under £100,000. The claim was of course unexpected and appears vexatious bearing in mind that it is being made by an adult child who has confirmed that they have had no financial dependency for many years, but that is another question altogether. Any thoughts/previous experiences would be appreciated.

Haroon Rashid
I Will Solicitors Ltd

2

It sounds as if there is little likelihood that the claim will succeed, and in that case I would suggest that the Trustees acknowledge that for the purpose of dealing with the claim they are holding the assets of the estate to the order of the executors and that they will indemnify the executors against the costs incurred by the claim insofar as they cannot be recovered by the executors from the claimant. I don’t think that this does any more than recognise that the executors are in any case entitled to a lien over the property they have assented to deal with the claim.

If the property was transferred back to the executors I think that it should be regarded as being in the nature of a correction of a premature assent, but I don’t know of any precedent. Beneficiary consent is desirable but I don’t think it’s strictly necessary.

Tim Gibbons