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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 18372
Experience:  I have been practising for 30 years.
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As part of a settlement with my brother on my late father’s

Customer Question

Good morning as part of a settlement with my brother on my late father’s will as sole executor it has been agreed that my father will relinquish his 50% equity with the property for payment of £25,000. As part of my litigation costs which exceeds this amount and a further £7,500.00 my solicitor have demanded that they complete the transaction so as to off set this £25,000 against my personal litigation fees. This I have not an issue with however as my role as executor to the estate does this implicate myself to there advice in the use of monies which belong formally to my father’s estate. To fully pay any estate debts I do need to sell a property to cover debts and in particular care home fees, there are other minor debts to HMRC. Is this as executor unlawful to what they are suggesting as my understanding is that any monies related to my late father has to be used to finalise the estate before any disbursements to myself as a sole beneficiary in my late father’s will. His estate is £495,000 with debts of £55,000 but he was asset rich and penny poor so the property will have to be sold to clear these debts. I have learnt yesterday behind my back that my solicitor has contacted my brothers solicitor demanding that the transaction monies are paid into their client account. So in summary my question is are they allowed to use the estate monies to pay for my personal litigation which resulted due to the litigation of a caveat issued by my brother. Like I say I haven’t an issue with this however having never executed a role as executor before is this unlawful? The grant of probate was issued last week however not to increase the any further debt with them I have formally instructed them that I will now complete the administration and they have point blankly refuted to release the grant of probate certificates unless for payment is made. I am based in the UK. Kind regards ***** *****ttle
JA: Have you talked to a lawyer about this? In which country do you live? If different, which country is your legal question related to?
Customer: I am based in the UK and no haven’t spoke to a lawyer just yourself as just need to know if my solicitor is correct in what she is doing?
JA: What steps have you taken so far?
Customer: please read my opening question
JA: Anything else you want the Lawyer to know before I connect you?
Customer: No thank yiu
Submitted: 18 days ago.
Category: Law
Expert:  F E Smith replied 18 days ago.

Welcome to Just Answer.

I will be happy to assist with your question today. I need some time to consider this and compose a response. There is NO need to wait online because you will get an email when I respond. Sometimes it will be minutes, sometimes longer.

I apologise for any unavoidable delay, but rest assured I have not forgotten your question.

what was the caveat that your brother issued?

Expert:  F E Smith replied 18 days ago.

Not certain what you are asking here but first charge on the estate is the funeral, then the testamentary administering expenses, then debts, and then bequests to beneficiaries.

Whether you would be liable for the litigation costs or whether the estate would be liable for the litigation costs would depend on who was taking her to court, why, and why it settled.

Customer: replied 16 days ago.
It was litigation as my brother challenged my late father’s will and issued a caveat as I am sole beneficiary to my late fathers estate. My brother was left a trust comprising 50% of a property my mother and father purchased as tenants in common. The remaining 50% of that property was part of my father’s estate. A settlement agreement was made that my brother could have the 50% of my father’s interest for the sum of £25,000.00. This transaction is due to be completed on or before the 10th March 2021. As the estate is lacking in liquidity I.e the estate debts will have to be settled by the sale of a further property which has been left to me as sole beneficiary, our solicitors have demanded that this sum of £25,000.00 pays my personal litigation costs. Unless things are viewed differently as grant of probate has been issued and because I am sole beneficiary our solicitors always personally advised me that I was personally liable for the litigation costs and this could not come from the estate. This was of course stipulated when litigation started back in 2019 and there was no end in sight then. My question is under the administration probate act 1925 are they able to in-fact class these funds and use these funds to cover my personal litigation costs. Or should they be classed as monies attained and held within the estate to only cover the administration costs of the estate and the debts accordingly within the estate. For the record both my parents are deceased so he can have the property in its full entirety.
Expert:  F E Smith replied 16 days ago.

The general rule with regard to whether litigation costs are recoverable or not is that you would not recover them unless court proceedings have been issued and then, even if they settled, without actually going to court, you would recover your “wasted costs” although to be frank, that could often be part of the negotiation that there is “no order as to costs”.

Therefore if your father was being difficult and it actually settled in your favour, it is very often the case that the cost of the argument is going to be more than the amount recovered and that’s the situation that your father is in, it settled for GBP25,000 but you have spent GBP25,000 on the argument and you are entitled to recover that loss of course he would have to pay his own costs so the net result is that this would cost him a shed load of money for nothing.

If the estate doesn’t have enough money to pay him, and it comes out of his own pocket, remortgaged his house raise a loan, whatever. His fault for entering into the litigation in the first place.

My personal opinion is that the estate doesn’t cover these costs in these circumstances, he would cover them.

Customer: replied 16 days ago.
Please can you read my question again as you apparently have not read it correctly! My father is deceased and it was my brother who put the caveat on my late farhers will so please can you read the question again. Thank you but you have completely mis read my question!
Expert:  F E Smith replied 16 days ago.

I apologise for that, I just got the parties the wrong way round but the answer is exactly the same and correct as it is. It’s just that it’s your brother that did all this and ends up spending more than he recovers.

Customer: replied 16 days ago.
Thank you but I asked for your advice this morning but your reply does not answer my question you refer to my father but if you read the question correctly you would have realised my father has passed away!! Please can you read the question again and answer correctly this time? Many thanks
Expert:  F E Smith replied 14 days ago.

The it was agreed that your father was relinquishing his 50% equity for GBP25,000. It was reasonable to assume therefore that your father was alive when that was agreed.

However it doesn’t matter who is alive and who brought the litigation. If there was a settlement to someone in the legal costs are more than the cost of the settlement, they end up in a net loss situation.

The estate should not have to do use its own money defending fruitless litigation and hence, whoever brought the litigation, whoever it was, is responsible for those costs personally