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JGM
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 11146
Experience:  30 years as a practising solicitor.
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My late mother's estate is about to be distributed

Resolved Question:

Hello. My late mother's estate is about to be distributed to the three beneficiaries, as all other costs have been met. I am one of the two executors, and there's a third beneficiary in addition to us, who isn't an executor.
We are uncertain of his ability or willingness to accept his share of the inheritance, and fear that legal action might have to be taken if he raises objections of some kind.
If the estate remained intact at that point, we understand that legal costs could be paid from it (effectively meaning that each of us would bear a third of the costs). But what if the two executors had claimed their share, leaving only the one-third share in the executors' bank account, awaiting distribution?
Would legal costs then be payable out of that share only (the remainder of the estate) or would all three beneficiaries be required to contribute, even if it meant drawing from what would by then have become their personal assets?
Submitted: 2 years ago.
Category: Scots Law
Expert:  Josh-2010 replied 2 years ago.
Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience. May I ask the reason you believe there may be a claim - I note the estate is to divided equally which does not readily lend itself to a claim?How long ago was probate obtained?
Customer: replied 2 years ago.

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.

Expert:  Josh-2010 replied 2 years ago.
Thank you for the clarification. I will need to opt out for a colleague who specialises in Scottish law to assist you with this. There are fewer Scottish lawyers than England and Wales lawyers operating so it may take a short whole for someone to respond but you should be notified by email when someone does. I hope one of my colleagues can assist you . Best wishes
Expert:  JGM replied 2 years ago.
Thank you for your question. I am. Scots lawyer and will help you with this.
You told my colleague that your concern was that there were domestic issues with the third beneficiary. That is not of your concern. As long as you have wound the estate up in accordance with the will or the law if there is no will then you can distribute the estate and leave his share until he responds to your request for bank details.
Any action against you would be in your capacity as executors, not as individuals.
I suspect there may be more to this and so I am happy to discuss further with you.
I hope this helps. Please leave a positive response so that I am credited for my time.
Customer: replied 2 years ago.

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.

Expert:  JGM replied 2 years ago.
Thanks for your reply. If proceedings were raised against the executors would only have to pay costs if they were unsuccessful in defending the claim. If the beneficiary lost the court would be asked to make him pay the costs.
Customer: replied 2 years ago.

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.

Expert:  JGM replied 2 years ago.
If you had drawn your shares you would have to make up two thirds of any award made against the estate.
You might want to leave some money in the estate to cover this eventuality.
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 11146
Experience: 30 years as a practising solicitor.
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