Unadministered estate / life interest


(edward.allen) #1

I would welcome members views on the following:-

I am dealing with an estate where H died earlier this year. His first wife (W1) died in 2012. Her will appointed H and her 3 children as executors. The estate which included the family home (unregistered, held in W1 sole name) was left everything to H for life with gift in remainder to the 3 children equally. The will was home made and contained no administrative provisions.

H obtained grant to W1 estate with power reserved to 3 children. H only partially administered the estate (bank accounts). It appears H may have distributed proceeds of bank accounts to remainder beneficiaries. H did nothing in relation to the property or a number of shareholdings which remain in W1’s name (approx. £250k). Dividend cheques received since W1’s death have, generally, not been cashed.

H remarried and his estate is complicated. There is also another executor involved who intends to act in relation to the administration of the estate. The children would like to obtain a grant in relation to W1’s estate so that they can sell the property. My initial thought was that they should be able to apply for a grant de bonis non so that they may deal with the un-administered assets. A grant will be required to sell the house and they do not want to wait for a grant to be obtained in relation to H’s estate.

However, I expect that when it comes to completing the IHT400 for H’s estate the correct treatment of the house and shares will be to treat them as comprising the life interest trust rather than as an interest in an un-administered estate. Despite the fact that no steps were taken to transfer assets to the trustees.

Does the above sound correct or am I missing something?

Edward Allen
Langleys Solicitors LLP