Hi all
I am acting for the executor in the administration of an estate – the estate includes a collection of antique muskets swords and bayonets (value £40K). The executor now wishes to sell these against the wishes of the sole beneficiary (a lady in her late 70’s) who was a friend of the deceased.
The will left the deceased’s horse and house to the sole beneficiary with the residue subject to IHT, debts and testamentary expenses also to her (IHT etc has yet to be determined). There is a possibility that this IHT etc could be met from cash in the deceased’s bank. My client says that they want to sell these now because they are costing the estate in terms of insurance and storage, the beneficiary has said that they do not want them sold (there is no apparent reason why the beneficiary would want to retain them).
Is my client exposed to a claim from the beneficiary if they go ahead and sell now thus ignoring the wishes of the sole beneficiary. My own view is that the executor would be ok to sell but only once they were certain that it was needed to meet the IHT etc - any thoughts?
I suggest the first issue is to find out why the executor wants to sell the items, as I suspect the costs referred to are not the sole reason for the decision.
Whilst an executor has power to sell, if there is no need to resort to the proceeds of any sale to enable the estate to be administered, it is unclear why they should seek to incur the wrath of the sole beneficiary by going against their (clearly stated?) wishes.
I am not sure whether this scenario has been litigated, but suspect that in the light of clear instructions to the contrary, the executor could be at risk of a claim for any costs of the proposed sale, and any potential loss if the beneficiary bought back the items.
The costs of storage and insurance might be pointed out to the beneficiary, who might be asked to confirm they are willing to accept these. If they are, then the items might be appropriated to her ASAP so that she is responsible for them, and not the executor.
Under s.1 AEA 1925 the estate is vested under the trustees & executors of the will. The beneficiary has no legal rights to any property.
s.32 AEA 1925 under the act requires those administrating the estate to pay all debts ‘first’. - legally the estate - “are assets for payment of his debt”.**
s.32(2) may be of interest to the beneficiary as if they ‘demand’ (under AEA 1925 they have to right to do so), the items and the executor agrees (so as to avoid argument) and it is found the estate cannot pay it’s debts - the beneficiary is liable - not the executor (that’s my interpretation).
The beneficiary has no claim.
The executors may use the assets as they see fit to pay the estate debts.
The value of the estate and IHT due need to be ascertained.
The executor has a duty to maximise the estate for the residuary beneficiary and therefore may be concerned about the cost of storage and insurance, however
as you only have one beneficiary in this case; and
assuming the beneficiary has capacity and is made aware of the storage and insurance costs; and
there are assets to cover the IHT (the beneficiary may need to be made aware that the house may have to be sold to settle the IHT if there are insufficient cash assets and she does not want the antique collection to be sold)
why would the executor go against the wishes of the beneficiary and risk the beneficiary becoming hostile towards them?
This matter seems to me to require simple common sense.
Why would any executor in their right mind contemplate a sale of estate assets in the knowledge that the sole beneficiary had specifically expressed a wish that they not be sold?
As indicated above, this assumes of course that resort to these assets is not necessary to discharge the estate’s expenses etc.
All the executors need to do is write to the beneficiary explaining their reasons as to why a sale is necessary and if, as indicated, it is to do with costs then the beneficiary can be asked to confirm in writing their willingness to bear them.
Failing any agreement but as a last resort presumably the executor could be replaced (AJA 1985 s50?).
There may be two insurance policies that might give some protection to the Executor.
Early Distribution Insurance available from Trust & Probate Insurance www.trustprobate-insurance.co.uk and executors insurance which is a more general policy protecting executors against any wrongful act ( but normally has to be taken out by the executor within 6 month of the death of the Deceased) www.executorsinsurance.co.uk