I have a client wanting to include pecuniary gifts in their Will but they do not want them to be paid if it would leave insufficient for the residuary beneficiaries. The client’s main asset is a property and they want to leave it to residuary beneficiaries. They also want to give a small pecuniary legacy but they are reluctant to do so if the house has to be sold to cover the gift. If there any wording that can be used to ensure the pecuniary legacy will not be paid in preference or to detriment of the residuary legatees?
Phoenix Legal Group
A specific gift of the property which has priority over the pecuniary legacy in the event of abatement
In a case like this would it be worth considering a short-term discretionary trust with a letter of wishes? Explain what the testator is trying to achieve and then let the trustees sort it out based on the estate as at the date of death.
I have used this approach with some success where a testator is uncertain exactly what they will own when they pass away. Of course, usually this is because of a changing IHT liability (will they survive a large PET, etc), rather than uncertainty as to their savings.
Elliot, Bond & Banbury
Why not make the property a specific legacy rather than part of residue?
If the testator wants the legacies to be paid in full at some time, they
just don’t want a forced sale of the house, perhaps another option would
be to make a specific devise of the house and charge it with payment of
the legacies. Wording can be added to make clear that the legatees have
no right to require a sale of the property.
If payment is delayed until a sale, interest on the unpaid legacies will
only run from the date they become due (the date of sale). If interest
is to run from the end of the Executor’s year, this will need to be
reflected in the drafting.
There would be nothing to stop the beneficiary receiving the property
from paying the cash legacies before the property is sold, should they