Re: Executor / eviction / legal costs

[Peter Crosland]

On 04/09/2016 10:41, PeterL wrote:
> Good morning.
>
> I am the Executor of my late mother's estate. Probate has been granted.
> One of the beneficiaries had to be evicted from my late mother's house.
> The house has now been sold. Is it fair and reasonable to deduct the
> cost of legal action for eviction from the entitlement of the
> beneficiary who was evicted? Would it also be reasonable to deduct the
> cost of utility bills for all the time they were legally regarded as a
> trespasser?

Yes. If the beneficiary wishes to challenge then let them do so. I
suspect they will not. However, I would tell them that you want their
written agreement not to take action before you release the funds to them.


--
Peter Crosland

Reply address is valid

[Robin]

I think that would be reasonable - but I struggle to see how it can be
lawful to set the legal costs against the distribution from the estate
unless, and to the extent that, the costs were awarded by the court
against the beneficiary.


--
Robin
reply-to address is (intended to be) valid

[GB]

I cannot see how the executor can reasonably require a beneficiary to
give their written agreement to the deduction before distributing the
balance to them?

Couldn't every executor make some deduction from every beneficiary's
interest, and then hold them to ransom by refusing to hand over the
balance unless they sign away their rights to sue?

[Robin]

On 04/09/2016 17:13, GB wrote:
>
> I cannot see how the executor can reasonably require a beneficiary to
> give their written agreement to the deduction before distributing the
> balance to them?
>

FTAOD I intended to question the legality of that as well as the
deduction for costs incurred.

[Peter Crosland]

On 04/09/2016 14:07, PeterL wrote:

> That all reads sensible. However, they were made homeless when evicted,
> and 'confidentiality' and 'data protection' has made it impossible to
> find out where they are.

In which case you can't pay them their legacy anyway! So you just need
to hold it pending them asking for payment.

[Peter Crosland]

On 04/09/2016 17:13, GB wrote:

The circumstances are obviously exceptional. It might not be strictly
legal but I doubt the beneficiary would challenge it.

[GB]

The executor might end up with a bit of paper that's actually valueless.
I'm no lawyer, but it seems obvious to me that any court would regard
holding a beneficiary to ransom in this way as completely unjust and
would look for every possible way NOT to uphold the written agreement.

[Peter Crosland]

On 04/09/2016 16:45, PeterL wrote:

> Total legal fees and costs are ~£2200. In granting the Possession
> Order, the Judge awarded fixed costs in the sum of £481.75. That, of
> course, was before the Warrant of Possession was issued. Should I have
> applied for additional costs at the second hearing?

You have valid grounds to deduct the full amount without further court
action. There is no good reason other beneficiaries should pay for the
consequences of this stupidity.

[Peter Crosland]

It would not be holding the beneficiary to ransom. They have brought the
situation on themselves and it is legitimate that they should pay the
full costs of doing so. As to the court supporting it that is difficult
to predict but bluffing in such a situation can work hence my
suggestion. The executor should not be exposed to the risk of having to
pay if they have already distributed the estate.

[Chris R]

Whether or not it is reasonable is surely irrelevant. The executors can
deduct debts owed to the estate by the beneficiary, but nothing else. Costs
awarded by the court, and utility bills paid on the beneficiary's behalf,
can be deducted, as can debts owing under the tenancy agreement (which might
include the costs of the eviction if the tenancy agreement says so). But
expenses of the estate that are not legally owed by the beneficiary cannot
be deducted just because the beneficiary is blamed for them.
--
Chris R

========legalstuff========
I post to be helpful but not claiming any expertise nor intending
anyone to rely on what I say. Nothing I post here will create a
professional relationship or duty of care. I do not provide legal
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where specified and are subject to the terms (including limitations of
liability) at http://www.clarityincorporatelaw.co.uk/legalstuff.html
======end legalstuff======

[GB]

The executor should have got a court order for costs if he wanted
certainty. It's probably too late to get one now. So, the deduction for
legal costs proposed by the OP is illegal.

To seek to back that up with a threat not to hand over the beneficiary's
interest unless he agrees not to sue seems to be exactly covered by
"holding to ransom".

I'm not sure why the estate paid for utilities. That looks like a
mistake on the executor's part, as utilities should have been paid by
the occupier of the property. I'd therefore say that the executor should
now reimburse the estate for that money, so the other beneficiaries are
not prejudiced by his mistake. :)

> As to the court supporting it that is difficult
> to predict but bluffing in such a situation can work hence my
> suggestion. The executor should not be exposed to the risk of having to
> pay if they have already distributed the estate.
>

Such is the world of the executor! It's why I always recommend acting
flexibly if at all possible, so as to avoid arguments.

In this case, the OP is asking about deducting (at a guess) £1-3k from
the share of one beneficiary. If the beneficiary raises a serious
argument about that, the legal costs could run into tens of thousands.
Is it worth taking that risk?

[Peter Crosland]

The costs can legitimately borne by the estate as a whole. Why should
the other beneficiaries effectively pay for the costs incurred by just
one beneficiary. This is quite inequitable. Do you suggest the executor
should sue the beneficiary instead? Offsetting the costs in this way
seems reasonable and I would expect the court to support it.

[GB]

Just go through these valid grounds, please? Often, successful litigants
end up out of pocket. That's how the system works. Of course, it's
unfair to the other beneficiaries, but the executor is only entitled to
the costs awarded. Any more would be illegal.

The beneficiary might be bullied into accepting more - that's what you
are saying - but it would be illegal, and he could sue the executor at
any time over the following six years. Likewise, the beneficiary might
be bullied into signing a (probably invalid) waiver of his right to sue.

Maybe we should change the name of this group to
uk.wing.it.and.see.what.you.can.get.away.with?

[GB]

You are absolutely right that it's unfair to the other beneficiaries,
but only because the litigation system in this country is unfair. It's
absolutely normal that the successful litigant is out of pocket for
costs. The executor only received fixed costs of around 20% of what was
incurred. That's a shame, but it's how the system works.

It's NOT okay to deduct money from one beneficiary's share simply on
general grounds of fairness. There's no power for executors to do that.

> Do you suggest the executor
> should sue the beneficiary instead?

He did sue the beneficiary, but the costs available in the small claims
track are very limited.

> Offsetting the costs in this way
> seems reasonable and I would expect the court to support it.

The courts apply the law, and there's no law allowing this.

In fact, if the OP goes ahead and makes the deduction, he well might be
guilty of theft. Ironically, had he made the deduction without
consulting a legal newsgroup, he would not have had the mens rea for
theft. However, he has now asked, and (apart from you) the view has been
that it's illegal to deduct more than ordered by the court. So, if he
now goes ahead, he would have mens rea.

[Peter Crosland]

The eviction will not have been to do with the Small Claims Track. It
will probably have been a High Court action. You don't think equity
might apply in this case?

[Peter Crosland]

The executor acted reasonably on behalf of the estate not them self. I
maintain that the costs were reasonably incurred by the estate not the
executor. I also agree that it might be difficult to recover the costs
directly from the culprit and on reflection my original suggestion was
legally incorrect though the OP did ask if it would be fair and
reasonable which most would agree that it is. What would you do in such
circumstances? Would you risk wasting more estate funds or be pragmatic
and tell the culprit you proposed deducting the costs and see if he
accepted this?

[Peter Crosland]

On 05/09/2016 12:04, August West wrote:

>
> The entity calling itself Peter Crosland wrote:
>>
>> The eviction will not have been to do with the Small Claims Track. It
>> will probably have been a High Court action. You don't think equity
>> might apply in this case?
>

> The one quesrion I see in this matter is: The estate would not have any
> ability ti extract to the monies spent from the tenant had he not been a
> beneficiary.
>
> Why, then, should they have that right when the tenant is a beneficiary?

Does equity not apply?

[Clive George]

On 05/09/2016 09:02, Peter Crosland wrote:

> The costs can legitimately borne by the estate as a whole. Why should
> the other beneficiaries effectively pay for the costs incurred by just
> one beneficiary.

Because they'd have to pay if the costs were incurred by evicting
somebody who wasn't a beneficiary.

> This is quite inequitable. Do you suggest the executor
> should sue the beneficiary instead? Offsetting the costs in this way
> seems reasonable and I would expect the court to support it.

Disagree.

[Clive George]

On 05/09/2016 10:55, Peter Crosland wrote:

> The executor acted reasonably on behalf of the estate not them self. I
> maintain that the costs were reasonably incurred by the estate not the
> executor. I also agree that it might be difficult to recover the costs
> directly from the culprit and on reflection my original suggestion was
> legally incorrect though the OP did ask if it would be fair and
> reasonable which most would agree that it is. What would you do in such
> circumstances? Would you risk wasting more estate funds or be pragmatic
> and tell the culprit you proposed deducting the costs and see if he
> accepted this?

I'd take the costs out of the estate, then proceed as per the will. That
is the pragmatic approach. Neither wasting more estate funds (they've
already been spent), nor proposing illegal action against the "culprit".

[Janet]

In article <rrOdnSm2HpJNk1DK...@brightview.co.uk>,
g6...@yahoo.co.uk says...

If a Will beneficiary causes extra expenses to the Estate, which are
paid by the Executor before distribution, don't all the residual
beneficiaries share a proportion of that reduction?


Janet

[GB]

I agree 100% with Clive.

I don't know where the idea came from that the executor should foot the
legal fees personally? If it's from something I said, then I apologise,
as I certainly didn't mean that.

[Niall]

I also 100% agree with Clive, although it may not fit as the moral way forward, it is the correct legal way forward. Costs not awarded, but incurred by the estate MUST be borne by the residuary estate. The pecuniary gift to the person evicted cannot be reduced, it must be distributed as per the Will. That is the executors legal duty.