I and my sister are executors of my late mother’s will. Grant of probate has been issued several months ago and an enquiry by the Department of Social Protection with regards to overpayment of non-contributory pension is complete with no overpayment found.
There are cash assets and a family home which is up for sale. Also, we have occurred various expenses along the way.
My questions are as follows: Do we have to wait until the house is sold before we can distribute the existing cash assets? If we have to wait, can we get repayment of expenses so far incurred?
Ms P.N.
On the Money: the personal finance newsletter from The Irish Times
Moving your savings into the right bank account could earn you an extra €700 a year on a €30,000 lump sum
Financial wellbeing and literacy across demographics subject of report
Here are 33 places to eat in Ireland that readers say are good value
You seem to have organised things very admirably but now find yourselves in a bit of a quandary. What next? And the answer is that you can distribute the assets available to you and then treat the sale of the property as a second distribution.
The investigation by the Department of Social Protection is not remotely unusual. If someone is in receipt of a welfare payment, you are obliged to notify the department on their death.
There are two reasons for this. First, clearly, now that the welfare beneficiary has died, it is important to stop payments to them as soon as possible. Second, it gives the department a chance to conduct a look back and make sure that everything is in order — including claiming back any payment made for periods after the person died, but also covering earlier eligibility to the payments received.
In your case, no overpayment is found and both sides now have the peace of mind that the affairs are in order.
Alongside that, you have clearly organised her financial affairs, gathering details of all your mother’s assets and any liabilities outstanding. Probate has subsequently been granted.
This is the critical “trigger” step in the process. You are not entitled to distribute any part of the estate until you have probate. But once probate is granted, as executors you are obliged to ensure the assets are distributed in accordance with the instructions contained in a will as soon as practicable once probate has been granted and ideally within the one-year grace period — the executor’s year — before any intended recipient can contemplate challenging the process.
So unless there is good reason to delay, you shouldn’t.
You find yourself with two classes of assets: your mother’s home and an amount of cash. You also have some expenses that you have incurred thus far in the process, presumably including probate fees.
The first thing to say is that you are entitled to your valid expenses. These are a charge on the estate and should be taken by you and your sister before the balance is distributed. As always, make sure account is kept of these steps — and the underlying evidence of the expenses — to ensure no subsequent conflict.
Clearly, with the house still to be sold, there will be further expenses but you do not have to wait until all expenses are finalised in order to recover all your costs. It would be reasonable to deduct any expenses incurred to date from the cash assets and then distribute those assets. Again, you don’t have to wait until the house is sold to distribute the cash among the intended recipients and I am sure they would welcome the interim payout.
The will may mandate the sharing equally of all assets or it may opt to share the proceeds of the house between one or more of the beneficiaries and the cash among another selected group, or whatever. The key thing is to follow precisely the wording and intent of the will. If someone is entitled to a share of the house and not of the cash, do not “advance” them some of the money pending sale of the property. It is only asking for trouble.
As you are doing this distribution, you can also be progressing the sale of the house which will necessarily take longer. Once that process is concluded with the sale completed and all necessary legal, auctioneering and other related expenses paid, the balance of the proceeds of the sale of the home can then be distributed, again in strict compliance with the wording of the will.
- Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice
