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Executors and undocumented debt

including wills and probate
PetraM
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Executors and undocumented debt

#160711

Postby PetraM » August 20th, 2018, 10:16 am

We knew this would be fun.

A family friend has claimed the deceased was holding money for them as they are "not good with money". They have asked for this money to be returned.

There is no formal record of this arrangement, no other family member was aware of it, though there are notes in the effects that have the friend's name and some figures the purpose is not identified. There are payments into the deceased's bank account but their purpose is not identified. At least one of the payments into the account appears to be the settlement of a debt for a purchase made by the deceased on the friend's behalf.

As executors, how "satisfied" do we need to be that the debt is genuine? The deceased was in the habit of providing small loans to family members ("bank of mum and dad") and we cannot see a way distinguish between the payments into the deceased's account that were repayments of a debt and the payments from the friend that were apparently for a different purpose.

The figure involved is less than £1000.

Thoughts?

PaulBullet
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Re: Executors and undocumented debt

#160730

Postby PaulBullet » August 20th, 2018, 11:59 am

Is this the same person who is living in the house?

Paul

PetraM
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Re: Executors and undocumented debt

#160751

Postby PetraM » August 20th, 2018, 1:36 pm

No. Different person.

PinkDalek
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Re: Executors and undocumented debt

#160804

Postby PinkDalek » August 20th, 2018, 4:42 pm

PetraM wrote:A family friend has claimed the deceased was holding money for them as they are "not good with money". They have asked for this money to be returned.

There is no formal record of this arrangement, ...


I'd hold back at least the less than £1,000 in the Estate until you receive proof of the debt, which sounds highly unlikely, or a valid formal claim against the Estate.

You'll possibly (I don't think its compulsory but may be advisable in the circumstances) need to place a statutory advertisement in The Gazette*** and local newspapers anyway, when others may come forward from what you've said. Unless the beneficiaries would be willing to come to some agreement to pay the person off, from whatever inheritance they may receive, but that may involve legal fees in what I think you've said is a relatively small Estate.


*** See https://www.thegazette.co.uk/wills-and- ... the-notice [it expands with further detail].

Clitheroekid
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Re: Executors and undocumented debt

#161113

Postby Clitheroekid » August 21st, 2018, 10:06 pm

PetraM wrote:As executors, how "satisfied" do we need to be that the debt is genuine?

You need to be satisfied to the civil standard, i.e. on the balance of probabilities. In practice this means that it's more likely than not that the friend is telling the truth.

However, you do need to obtain proper evidence to be able to justify your decision one way or the other. In the absence of proper documentary evidence all you have to go on is the word of the friend.

I would therefore recommend that you ask them to provide a Statutory Declaration (which is effectively sworn evidence) setting out in detail when the money was paid to the deceased and including as exhibits copy bank statements showing each of the payments.

If it stacks up then it would be sensible to send a copy to each of the residuary beneficiaries saying you intend to make the payment and inviting written objections within, say, 14 days.

Alternatively, if you think the residuary beneficiaries would be willing to make the payment without such evidence you should prepare a document to that effect and have it signed by all of them, so that there's no question of you incurring any personal liability as executor.

PetraM
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Re: Executors and undocumented debt

#162429

Postby PetraM » August 27th, 2018, 3:57 pm

CK, thanks for the, as always, sage advice.

Some of the beneficiaries are minor children. That seems to me to complicate the agreement aspect.. Any ideas?

Slarti
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Re: Executors and undocumented debt

#162434

Postby Slarti » August 27th, 2018, 4:13 pm

PetraM wrote:CK, thanks for the, as always, sage advice.

Some of the beneficiaries are minor children. That seems to me to complicate the agreement aspect.. Any ideas?


They can't give their agreement.

If it were me, I'd tell the undocumented claimant that if they can't produce proof, tough. I wouldn't want to take the risk/responsibility of that coming back to bite me down the line.

Slarti

Clitheroekid
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Re: Executors and undocumented debt

#162751

Postby Clitheroekid » August 29th, 2018, 12:41 am

PetraM wrote:Some of the beneficiaries are minor children. That seems to me to complicate the agreement aspect.. Any ideas?

Yes, that does complicate matters.

It's always possible for executors faced with difficult situations to apply to the probate court for directions. However, the amount involved doesn't justify the expense of doing this.

From a purely practical point of view I would think the best solution is to have the parents of the minor beneficiaries sign on their behalf if they're willing to do so.

If they aren't, then I think you're just going to have to make a judgment based on the available evidence. If the evidence (in the form I suggested) looks compelling and you can obtain approval from the adult beneficiaries then make the payment. The amount involved for the minor beneficiaries must be pretty trivial, and it's difficult to imagine them taking any action to recover such a small sum.

But ultimately the decision has to be that of the executors. And I should also mention that unless the Will contains an express power to act by a majority their decision must be unanimous.


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