Hi all
I have a Will client who does not want her funeral, debts and testamentary expenses to be paid from the residue of her estate. Instead, she wants those to be payable from her share of her business (she is in a partnership with her son and they own a restaurant). She leaves all her share in the business to her son in the Will. Is it possible for me to state that the funeral expenses etc are paid from her interest in the business?
Thanks,
Natalie Tonkin
Beviss & Beckingsale LLP
There is no reason a will cannot specify that all, or some, of an estate’s liabilities are to be paid out of a specific fund. However, if that is done, careful consideration should also be given to the situation should the designated fund prove insufficient to satisfy all such liabilities - should any excess liability be payable out of residue or another fund?
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
As funeral expenses are a first charge on an estate so that the executor is obliged to pay these and would usually ask the deceased’s bank to do so out of her bank account, assuming that there are sufficient funds there, I would suggest that the bequest of the share of the business to the son be made subject to him reimbursing the estate with the cost of the funeral, debts and testamentary expenses.
Patrick Moroney
I share @paul Saunder’s concern. Among other things, there is always the chance that the business is not extant at time of death or there is no liquidity. One assumes that the expenses come out of the business bank account, but if the client’s half of the business bank account is insufficient then Paul’s problem arises.
I would be inclined to add a contingency clause if funds were not available from the business.
Andre Davidson
Finantium