Getting Your Legacy Quickly. Interim Distributions from Estates

Even in more certain times, many of us from time to time are in urgent need for a cash injection.  This may be due to a drop in income or unexpected expenditure.

On the death of a relative, no matter how well-loved and respected, it is natural to enquire as to whether one is left a legacy and how much.  That normally isn’t a problem, although the process may seem tortuously long-winded. In some circumstances, it is necessary to apply some pressure on executors to release information. My colleague  Ryan Taylor sets out in his blog how this might be achieved.

Once you have established that you are mentioned in a will, there are two types of legacies that you might be entitled to.  A specific legacy gives an exact amount of money or a specified property, whereas the residual legacy gives you a share in the remainder of the estate after debts and specific legacies have been paid out.

The person in charge of gathering in the estate assets and then making distributions is normally the executor.  In the case of an intestacy the same role is performed by an administrator.  These personal representatives of the deceased have a considerable amount of discretion as to when to make payments. This is partly because personal representatives can be personally liable if they pay out too much money.  Only in very exceptional circumstances will a personal representative make an interim distribution before a grant of probate has been obtained.

The process of obtaining a grant can in some circumstances be complicated and lengthy.  Before a full grant is obtained it is necessary to value assets and prepare a tax return.  There also normally has to be a payment of tax before the grant is issued.  With the exception of some small estates, this can be a daunting process for the lay person who has been appointed as executor in the will.  If the tax form is done incorrectly or if HMRC raises issues on the valuations the process can become even more lengthy.  It is for this reason that many people writing wills appoint solicitors to become the executor, or if a person is appointing an executor, they appoint solicitors as their agents to do this work. Even when a grant is obtained there may then be limited liquid assets to distribute. If a property has to be sold, again there can a further delay. We have had cases of estates not being distributed after 20 years.

Unless there are exceptional circumstances, it can be difficult to persuade a court to remove a personal representative in the first year after the death.  However, if things are taking an extremely long time, then it is possible to apply to have the personal representative removed. The court will then normally appoint a solicitor, to get on the with the job quickly. We act in such cases, which often require after appointment resolving protracted family disputes in a cost-effective and timely manner.

So, what can you do if you are in desperate need for money shortly after a death?

Firstly, personal representatives do have a duty to consider reasonably any request for an interim distribution.  Of course, they cannot magic money out of thin air, however, if there is a bank account with surplus money there then they should really consider an interim distribution.  Where it is quite clear that the person will be entitled to a legacy, for example, if the person is entitled to a specific legacy, and there is available money, then any request for interim distributions should be considered.

If the need is particularly urgent, it might be possible to obtain an interim grant, or even for the personal representative to borrow money against an asset in order to make an interim distribution. If a personal representative is not considering seriously a reasonable request, then advice should be sought. A letter setting out the legal duties that personal representative is under can be effective.

In other circumstances, it is possible under the Inheritance (Provision for Family & Dependants) Act to issue a court action in order to obtain an interim distribution.  My colleague Oliver Jackson his recent blog sets out the rules around eligibility to make such a claim.

If you require any advice on any of the issues raised in this blog, please contact us on 020 7940 4000 or David_wedgwood@anthonygold.co.uk.

*Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*