Will advice

[tractorian]

My Aunt (not her real name) has an estate of £1,000.

She plans to leave it to five nephews A, B, C, D and E (again, not their real names), listed in that order in her will, in equal amounts of £200.

If, on her death, the estate is worth only £500, does each get £100 or do A and B get £200, C get £100 and D and E get nothing?

I'm F by the way.

[Laughton]

Perhaps the solution is to leave each 20% of any estate after deduction of costs/fees?

I'm not a solicitor or have any other legal qualifications but that would seem the most straightforward way around the problem.

[tractorian]

That is one option I know, but some of the 'nephews' are charities. Legend has it that charities get very aggressive where percentages are concerned, question everything and make will settlement even worse than it usually is.

[swill453]

That is one option I know, but some of the 'nephews' are charities. Legend has it that charities get very aggressive where percentages are concerned, question everything and make will settlement even worse than it usually is.

In that case I'd imagine they'd be even more aggressive if the will says they should get £200 but they end up with less or nothing.

Find another way, I'd say.

Scitt.

[PinkDalek]

If, on her death, the estate is worth only £500, does each get £100 or do A and B get £200, C get £100 and D and E get nothing?

The pecuniary legacies would be abated (scaled down) proportionately. Thus each beneficiary would get the same amount.

[staffordian]

If, on her death, the estate is worth only £500, does each get £100 or do A and B get £200, C get £100 and D and E get nothing?

The pecuniary legacies would be abated (scaled down) proportionately. Thus each beneficiary would get the same amount.

But I guess this raises the question of whether this then gives the charities' solicitors carte blanche to interfere, in order to maximise their share, or minimise their loss, resulting in the same outcome as the dreaded percentage share?

[newlyretired]

So leave the charities a fixed sum and make sure that it is easily covered by the value of the estate

newlyretired

[tractorian]

Thank you all for your interest and replies.

However, as usual, the problem isn't quite as simple as I posed. The residue of the estate, after the 'nephews', have had their £200, goes to a charity, so you can imagine their interest.

But surely, the position where an estate has been reduced by care and other cost to below the value of all the bequests can't be that uncommon.

[gryffron]

surely, the position where an estate has been reduced by care and other cost to below the value of all the bequests can't be that uncommon.

Sadly, it isn't. And it can frequently result in expensive litigation effectively wiping out the bequest altogether. Meaning Aunty's legacy causes everyone strife and benefits only the lawyers. Which I'm sure is not what she wants.

If you can anticipate a problem, write around it. e.g.

If net value of estate's distribution is >£1,000 then A receives £200, B £200, Remainder split equally between C, D, E. Otherwise entire amount split equally between A, B, C, D & E.

If there is any possible complication such as this, pay a professional to write the will! They'll use correct legalese language, which I'm sure the above is not. As CK has often told us, solicitors make far more money from badly written amateur wills than they do from writing them properly in the first place. AgeUK offer cheap professional service.

Gryff

[tractorian]

Good idea Gryff. In fact, the will is being written professionally, under a charity's free will writing service. The point hasn't come up at any of our meetings, it was something which came to me the other day. Perhaps I should raise it at the next meeting as it would be the charity which suffered most if the residue of the estate was depleted or disappeared altogether. Seems strange that the charity doesn't raise the topic.

[production100]

The alternative is to leave the charity out of the will altogether, but leave a letter with the will as an expression of wishes which asks all of the beneficiaries to donate 20% of their bequest to the charity, or better still a charity of their choice. While not legally binding it will express her wishes and avoid the immediate problem.

Chris

[chas49]

Good idea Gryff. In fact, the will is being written professionally, under a charity's free will writing service. The point hasn't come up at any of our meetings, it was something which came to me the other day. Perhaps I should raise it at the next meeting as it would be the charity which suffered most if the residue of the estate was depleted or disappeared altogether. Seems strange that the charity doesn't raise the topic.

If I've read this right, your Aunt wants to leave a certain sum (S) to each of 5 beneficiaries, with any residue going to a named charity. The estate is currently expected to be valued at 5xS.

In the event that the estate turns out be worth less than 5xS, you are concerned at the possibility that the residual beneficiary would take legal action affecting the bequests to the named beneficiaries.

As others have said, problems like this should be minimised by having the will written professionally.

Nevertheless, it is a good idea for your Aunt (via your advice) to understand what she is trying to do.

I think you need to suggest to her (and the solicitor) that the bequest to the 'nephews' should be espressed as something like "such sum as shall amount to 20% of the total value of my estate, but not more than £200."

Does that achieve the desired result?

[tractorian]

What a can of worms I've opened.

There are about 20 beneficiaries, ten of which are charities while the rest are people - the charities are listed before the people. Each gets a fixed sum, with the residue going to provide bursaries for the pupils of her old school. And she's not my aunt.

[PinkDalek]

There are about 20 beneficiaries, ten of which are charities while the rest are people - the charities are listed before the people. Each gets a fixed sum, with the residue going to provide bursaries for the pupils of her old school.

Can you clarify?

Are those 20 or so Pecuniary legacies such that they are shown as fixed sums (which is what you say)?

If so and if there are insufficient funds to meet them in full then, as before, they should be abated (scaled down) proportionately. Thus each beneficiary would get the same amount in the proportion of the original pecuniary legacy amount. Depending on the wording of the draft Will, the order in which they are listed should not be of relevance.

Once those Pecuniary legacies have been dealt with, it is only then that one should look at the residue. If there is none, there is nothing for the old school's bursary fund.

And she's not my aunt.

That's how you decided to describe her in your OP. It makes sense for us to follow what you said and describe her as such.

[pochisoldi]

Standard will writing rules apply.

1) if there are scenarios you are concerned about, a) write them down, and b) describe what you would like to happen
2) Get the will drafted by a suitably qualified person.


As far as dealing with the issue are concerned, here are some options that a will writer might propose

Pecuniary legacies
A) Make the legacies conditional.

Example 1: For legacies to individuals, make the legacy conditional on the beneficiary surviving for X days, and there being sufficient funds to pay any remaining pecuniary legacies.
(So if the beneficiary has died, and there isn't enough money to go around, then the legacy isn't made)

Example 2: For legacies to charities, bundle them together under one clause, which in itself is made conditional on there being enough money to pay the legacies to individuals.

Both of these, worded correctly together, can be used to establish a pecking order with the following classes of beneficiaries:
i) Individuals who have survived the deceased
ii) The estate of individuals who have survived the deceased
iii) Charities
iv) Residual benficiaries

Doing this requires careful wording to give the desired effect (Hint: get it done professionally)
For example, if the wording isn't done correctly, and there's enough money to pay the individual pecuniary legacies, but not enough to cover the charity pecuniary legacies, you could end up with the charity's money dropping into the "residue".

Personally I would avoid any reference to specific charities in a will, and would leave "N%", "L% of the estate, to a maximum of £M" (capped percentage), or "£Y"(absolute amount) "to be distributed to charitable causes at the [absolute] discretion of my executor(s)". Then provide have a separate list of charities or instructions on the types of charity the money should (or shouldn't) be left to. Some charities have an unseemly grasping approach towards executors of wills where they are residual beneficiaries. (for example being excessively stringent when it comes to estate accounts)

PochiSoldi

[chris]

There are about 20 beneficiaries, ten of which are charities while the rest are people - the charities are listed before the people. Each gets a fixed sum, with the residue going to provide bursaries for the pupils of her old school. And she's not my aunt.

If your 'aunt's' estate is as small as you make out and there are 20 beneficiaries, you may just as well tell your 'aunt' to gift the sum to the local firm of solicitors. If I was named executor of such a will, I would not touch it with a bargepole. Therefore, there is going to be enough legal fees involved to completely wipe out the estate. With 10 charities on board, each wanting to scrutinise the figures and each questioning every act of the executor (especially if there is not enough to go round) then this is a classic Jarndice v Jarndice situation. Nobody that she wants to inherit will get anything and the lawyers will get it all.

Tell her if she has a limited estate, to pick 1 or at the most 2 charities to inherit some and unless she has 10 nephews, then to think about how many of these should inherit. Give small fixed amounts to charities and split the rest.

She seems to think that she is being generous by including everyone but once funeral fees are paid, there will be so little left that she has created a mess and problems for all 'beneficiaries' and they are more likely to hate her for it than thank her!

Chris

[chas49]

There are about 20 beneficiaries, ten of which are charities while the rest are people - the charities are listed before the people. Each gets a fixed sum, with the residue going to provide bursaries for the pupils of her old school. And she's not my aunt.

If your 'aunt's' estate is as small as you make out and there are 20 beneficiaries, you may just as well tell your 'aunt' to gift the sum to the local firm of solicitors.

I suspect the OP was trying to simplify things. Unfortunately, when trying to discuss the terms of a will, simplification can leave relevant detail out, and result in advice on things which turn out to be irrelevant.

Hopefully the OP can clarify further if s/he wishes

[tractorian]

Thank you Chas49.

My original enquiry was made solely out of curiosity as to what would happen if the sum left in a will does not meet the fixed sums promised by the deceased. The numbers used were meant to demonstrate the point in simple terms. I am involved in helping someone draw up a will, but the problem is very unlikely to arise in that case.

Thank you all for your advice.

[Dod101]

Personally I would avoid any reference to specific charities in a will, and would leave "N%", "L% of the estate, to a maximum of £M" (capped percentage), or "£Y"(absolute amount) "to be distributed to charitable causes at the [absolute] discretion of my executor(s)". Then provide have a separate list of charities or instructions on the types of charity the money should (or shouldn't) be left to. Some charities have an unseemly grasping approach towards executors of wills where they are residual beneficiaries. (for example being excessively stringent when it comes to estate accounts)

That is an interesting way to deal with charity legacies. I have simply left absolute amounts and I do not think there is any danger of my estate not being able to meet these. They are just about 10% of my net estate and so will reduce the IHT rate to 36%. I would never leave a charity the residue otherwise as you say you risk the charity querying everything in the estate distribution.

Dod

[Mike88]

If the person insists on named charities why not leave each of them a percentage of the net proceeds.