“I direct that my property X shall be sold and the net proceeds of sale after all legal costs and estate agents fees shall be divided as follows: [various beneficiaries/various percentages].”
Do costs such as council tax, boiler repairs, insurance etc come from residue or the net proceeds of sale?
Residue.
Instruct a professional
My intuition tells me that you’re right here Karl. However, I can also see an argument being made that a gift of land with a direction to sell and divide the proceeds between various beneficiaries is a specific gift, specifically a gift of the property on trust with a direction to sell. If it is a specific gift, then all the costs of care, upkeep and preservation are to be borne by the specific legatees from the date of death.
Council tax, utilities etc.are an estate expense.
Besides, the clause quoted is clear on what is deductible. Of course, a Will could state that such other expenses are deducted.
The PRs could appropriate/transfer the property to the legatee(s) in such a situation.
And remember, council tax is exempt for 6 months after the Grant is issued.
Hi Karl,
The clause indicates that legal costs and estate agents fees are deductible. Legal costs to me means solicitor’s fees. I cannot see how either of those extend to council tax, boiler repairs, insurance, etc. I also cannot agree with the statement that council tax, boiler repairs, insurance are always estate expenses. They are estate expenses if they relate to property that does not form part of the residue but they are not estate expenses if they relate to specific gifts. If they occur after death and relate to a specific gift, they are part of the cost of care, preservation and upkeep. Please note that I am not saying this is a specific gift and am merely pointing out the possibility it might be classed as one.
I’m not saying the clause extends to council tax…I’m saying it’s possible to draft a clause that could extend it to include council tax, utilities etc.
The other things you mention are estate expenses.
Thank you. I should make clear that these are expenses arising post death.
It is important to note that the costs, to the extent they are the costs of getting in and distributing the estate, are estate expenses. However, if the gift is a specific gift, costs of care, preservation and upkeep are borne by the specific legatee from the date of death. I would argue that council tax, boiler repairs and insurance are all costs of care, preservation and upkeep. However, whether the above gift is specific is unclear. It is worth noting also that, if this is a trust, then the costs of council tax, boiler repairs and insurance, I would imagine, would be trust expenses and would need to come out of trust property, rather than being administration expenses.