Executor/Trustee/Discretionary Beneficiary living in estate property


(Harriet Murray) #1

Any thoughts on this are gratefully received.

I have an estate where the house (which is by far the most valuable asset in the estate) is occupied by one of the sons of the deceased. He has lived in the property (the family home) for over 20 years and helped care for his mother (the surviving spouse and whose estate I am administering). He is an executor and trustee along with his 3 siblings and is also one of the discretionary beneficiaries (along with his siblings and their children) of the discretionary trust of residue.

He is able to hold down only minimum wage type jobs. When the house is sold (it needs to be to pay the balance of IHT in the estate), some of the proceeds will need to be used to buy a flat for him to live in.

Probate has been obtained and the property will soon be put on the market.

While everything at the moment is happy families, there is the concern that there might be a problem with him vacating the property when the property is sold. Yes he is an executor and fully aware of the amount of IHT that needs to be paid and the only way is for the property to be sold, however reason might depart and the estate needs to be protected from problems with him vacating the property when a buyer is found.

Also he, as an individual, needs to be protected (so he doesn’t voluntarily vacate the property and then have difficulty in the situation (hopefully unlikely) that he needs to apply for social housing).

He will need to be given notice to vacate the property. However in the event that he ignores this notice and remains in the property, how do we recover possession of the property? Is the procedure that of s21 LTA accelerated possession proceedings, or is it something else?

Many thanks,

Harriet Murray
Gedye & Sons


(Paul Saunders) #2

From what is said, it appears the son has occupied the property as licensee, rather than under any form of tenancy. The expedited procedure under s.21 Housing Act 1988 applies only to obtain possession under an assured shorthold tenancy

Whilst the other 2 executors can apply to court for possession, they will only have a limited recourse to the estate/trust fund for reimbursement of their costs. If, by any mis-chance the occupant’s costs are awarded against them, that will be a personal liability.

Technically, the other executors should apply for a Beddoes Order, although the costs of obtaining such an order might not be greatly different to those incurred in obtaining possession. However, the executors will obtain a level of protection if they obtain the informed approval of all the adult members of the class of beneficiaries (other than the beneficiary in occupation) to incur legal costs in pursuing a claim for possession against him.

Timing may be an issue, as it would be preferable to be certain of securing possession before contracts for sale are exchanged. Any intending purchaser may be unwilling for completion to be deferred whilst a claim for possession is being pursued. This could result in the service of a notice to complete and its attendant cost consequences.

Whilst comment is also made as to any duties to the executor in occupation, the executors’ overriding duty is to administer the estate and the position of the executor in occupation is contrary to that duty. Accordingly, he should obtain his own advice independent of the other executors.

Paul Saunders


(Philip Palmer) #3

Surely the practical solution is to agree with the resident executor where he is going to go? If he is purchasing a flat, say then sale of the house and purchase of the new flat can be run simultaneously as a chain transaction. If the executor has found a new flat and signed up to buy it he is very unlikely to change his mind and benefits won’t come into it. You may want to mention the court order route as an alternative to protect your back but you don’t need to create conflict where none exists.

Plus your firm gets 2 conveyancing transactions out of it, not just 1.

Philip Palmer
QualitySolicotrs Palmers


(Harriet Murray) #4

Thank you very much Philip for your thoughts on this. The resident beneficiary/executor is not in a position buy a property, it will be the discretionary trust of residue that will need to buy a property in which he is allowed to live. In the interim he needs to be encouraged to find a flat to rent until the trust has bought one. Hopefully we will get two conveyancing transactions, but one after the other.

Harriet Murray
Gedye & Sons