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Buachaill
Buachaill, Barrister
Category: Law
Satisfied Customers: 10175
Experience:  Barrister 17 years experience
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Our company comprises of three directors, one of whom died

Customer Question

Our company comprises of three directors, one of whom died in March 2015. HMRC and Companies House were informed with his wife now being the third Director. Ever since his death we have been paying the wages/dividend to the appointed Probate Solicitor. Is this standard practice?
There was a loan from the deceased paid to the business, this amount has now been surpassed, so would you expect us to stop paying the probate solicitor?
It has not been easy to gain any clarity from the deceased wife in this matter. Could you please advise
Regards
Jerry Missin ***@******.***
Submitted: 4 months ago.
Category: Law
Expert:  Buachaill replied 4 months ago.

1. Dear *****, the first thing is I have never heard of "wages" being paid to a dead man. So I would advise you to stop paying wages immediately to the Probate solicitor. It is perfectly acceptable to pay a dividend to the estate until such times as the person who benefits under the will in respect of the shares takes ownership of the shares. So, I would advise you to find out who inherits his shares under the will.

Expert:  Buachaill replied 4 months ago.

2. The correct course here is to pay and Director emoluments to the wife if she is entitled to them. However, as the deceased is no longer working in the business, he cannot be earning any wages. Thirdly, be aware that any loan must be repaid to the estate of the deceased. However, you cannot take into account dividends when calculating the re-payment of the loan. However, you can take into account alleged "wages" you paid the estate.

Expert:  Buachaill replied 4 months ago.

3. At this juncture, you should formally write to the Probate solicitor and executor to find out who has inherited the shares of the deceased. If it is not the wife, then you are better off not have her as director. Instead you will want to appoint the person who inherited the shares of the deceased in the company.

Expert:  Buachaill replied 4 months ago.

4. Be aware that an executor has a period of grace known, as an "executor's year" within which to administer an estate. So, time has now passed such that the estate of the deceased should have been completed. So, at this juncture, you need to get a copy of any will from the District Probate Registry in Leeds if you have not done so already and see for yourself who has inherited the deceased's shares and what has happened.

Expert:  Buachaill replied 4 months ago.

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