Hello. I'm domiciled in Scotland and so the estate has been administered under Scots Law. Confirmation was granted in August 2014.
The basis of concern is that the third beneficiary is domiciled overseas, is believed to have been (and possibly still to be) bankrupt and has not responded to requests for bank account details to allow an electronic funds transfer to take place. We understand that there are domestic complications and are apprehensive about possible actions from his wider family - especially if the inheritance remains unclaimed for a long period and he doesn't survive to claim it.
We need to be assured that if we go ahead and draw down our own shares from the executors' account, we shall not be personally liable if action is raised against us in the future as executors.
Thank you for this reassurance. The only point on which I'm still not clear is one that I asked about in my OP, viz would any costs that might occur because of an action against us (as executors, not as individuals) be payable out of the third beneficiary's unclaimed portion of the estate? Or would we have to pay out of our own resources?
There is indeed a lot more that I could say but in a public forum it would become too likely that the third party would recognise the scenario.
I hope you can answer this final question.
Yes, but I still need to know where we, as executors, would be expected to obtain the funds from to pay costs, in the event that we lost.
Let me put it another way: as I understand it, any legal costs incurred in the administration of an estate can be paid out of the assets of the estate. So if the estate were not distributed at all meantime, and an action were raised, all costs could be met from its assets. Is that true?
Then we move to Scenario B, in which the executors have drawn their shares from the estate bank account, and an action is then raised, for whatever reason. Can the executors defray their costs by drawing them from this residue (which is essentially still 'the estate') or must they leave it intact and pay from their own pockets, in order that this share can some day be paid out in full?
What we are faced with is the need to know if we would be putting ourselves at any degree of risk by drawing our shares now, instead of leaving the entire estate unclaimed until the intentions of the third party are known.