When is it safe to distribute an estate?

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Executors often ask, ‘When is it safe to distribute an estate?’ It is a very important question as there can be serious consequences for an executor who gets it wrong, including personal liability. In this article contentious probate solicitor, Chris Holten looks at a recent case of an executor who has found himself in hot water and how such problems can be avoided.

A professional executor has recently been fined £15,000. His mistake?  Allowing a distribution from an estate.

The estate is question was subject to a dispute brought by the deceased’s children. The distributions were made to the deceased’s widow at her request.

It was a large estate and the executor considered that the risks of distributing part of it were minimal.

However a Tribunal determined that regardless of the size of the estate, no distributions should have been made and imposed the hefty fine.

It is important that executors ensure estate assets are protected if it is anticipated that litigation against an estate is likely and that includes delaying distribution.  Failure to do so leaves an executor open to personal liability. Professional executors run the additional risk of facing sanction from their regulator.

If you are an executor and are unsure whether it is safe to distribute an estate we would generally urge caution. Executors can often feel pressurised by beneficiaries to complete the administration of an estate and distribute the assets, but they should not be bullied into doing so prematurely. This is especially important where the executor is aware that there is a dispute.

Executors can retain our specialist team to advise on when it is safe to distribute an estate. By taking expert legal advice an executor will be able to demonstrate that they have considered the issues with diligence and care, thereby limiting the risk of personal liability or a fine.

Taking legal advice in these circumstances is a perfectly reasonable step for an executor to take and the costs will be an expense of the estate. So, rather than run the risk of being drawn into a protracted legal dispute and being held personally liable it makes sense for an executor to consult a specialist solicitor as soon as there is any indication of a dispute brewing.

For a preliminary chat about when it is safe to distribute an estate call freephone 0808 139 1606 or email us at [email protected]