Intestate & Per Stirpes Rule

lawgirl

Ok peoples, my head is wrecked trying to figure this one out so any help appreciated!!

Grandmother (A) dies intestate in 2007 - she has 5 children all alive. Estate is partially administered and some monies paid out when 1 child (B) dies in 2009.

child who dies (B) leaves a Will leaving entire estate to only child (C)but dies in debt (not huge).

Question: Can (C) inherit under the per stirpes rule without having to take out a grant of probate and administer (B)'s estate or does (B)'s share of (A)'s estate pass to (B)'s estate and is therefore eaten up by (B)'s debt leaving nothing for (C)?

LG

bath handle

Child c has no claim on the grandmothers estate because the parent was alive at the date of the grandmothers death.

coylemj

bath handle wrote: »

Child c has no claim on the grandmothers estate because the parent was alive at the date of the grandmothers death.

Correct, you can't inherit under per stirpes from a grandparent if your parent was alive when the grandparent died. The estate of B will get the inheritance from the estate of A and this will be used to pay B's debts so C will get nothing because it appears that B died insolvent.

lawgirl wrote: »

Question: Can (C) inherit under the per stirpes rule without having to take out a grant of probate and administer (B)'s estate or does (B)'s share of (A)'s estate pass to (B)'s estate and is therefore eaten up by (B)'s debt leaving nothing for (C)?

LG

The second proposition (in bold) will apply.

lawgirl

Thanks guys, its been wrecking my head for days!! I kinda had a feeling that it went into (B)'s estate alright rather than per stirpes!

LG

Jo King

If this was a real case and there was a lot of money involved it would be worth considering renouncing B's claim to the estate. This can be done by his administrator and would result in an increasing share for the remaining beneficiaries of the original estate. They might be willing to make an arrangement with c.

coylemj

Jo King wrote: »

If this was a real case and there was a lot of money involved it would be worth considering renouncing B's claim to the estate. This can be done by his administrator and would result in an increasing share for the remaining beneficiaries of the original estate. They might be willing to make an arrangement with c.

If this was done specifically to damage the chances of B's creditors getting all or part of the money owed to them, wouldn't the same creditors be able to sue the administrator of B's estate?

I'm not a lawyer but I can't see how the law would allow someone to pull off this stroke, it would be like the administrator setting fire to B's house just to stop the creditors getting payment, surely he or she has a responsibility to gather up all of B's assets and use them to pay the lawful creditors?

If the administrator was capable of renouncing B's claims on the estate of the parent, it would leave the process of administration/probate wide open to corruption. Putting it bluntly, he could blackmail the creditors to promise him a kickback or else he could put the estate further into the red by renouncing a legacy that is on it's way to B's estate.

Jo King

coylemj wrote: »

If this was done specifically to damage the chances of B's creditors getting all or part of the money owed to them, wouldn't the same creditors be able to sue the administrator of B's estate?

I'm not a lawyer but I can't see how the law would allow someone to pull off this stroke, it would be like the administrator setting fire to B's house just to stop the creditors getting payment, surely he or she has a responsibility to gather up all of B's assets and use them to pay the lawful creditors?

If the administrator was capable of renouncing B's claims on the estate of the parent, it would leave the process of administration/probate wide open to corruption. Putting it bluntly, he could blackmail the creditors to promise him a kickback or else he could put the estate further into the red by renouncing a legacy that is on it's way to B's estate.

An administrator is under no duty to gather in assets for the benefit of creditors. The administrators duties are to the estate and beneficiaries.

coylemj

Jo King wrote: »

An administrator is under no duty to gather in assets for the benefit of creditors. The administrators duties are to the estate and beneficiaries.

You're saying that his duty is to the 'estate and beneficiaries', the problem with that statement is that there are no beneficiaries, I assume that by 'beneficiaries' you meant people expecting legacies.

The only people who are going to get money out of the estate are the creditors so in this case 'estate' and 'creditors' are effectively the same thing in so far as 'estate' refers to a collection of assets and cash and 'creditors' are the people who are going to get all of this money. Thus I'm confused how you can separate them in this instance.

If the administrator's duty is to the estate, doesn't that mean that he is obliged to derive the maximum benefit from buildings, farms, debtors and a potential inheritance from the parent (A) who died before B? How can he then renounce the inheritance if his duty is to the 'estate'.

Kosseegan

coylemj wrote: »

You're saying that his duty is to the 'estate and beneficiaries', the problem with that statement is that there are no beneficiaries, I assume that by 'beneficiaries' you meant people expecting legacies.

C is a beneficiary of that estate. C will get nil therefore refusing the entitlement would not affect C. Something like the manouvre described here is a matter for leading specialist professional advisers.I have seen something like that done for tax reasons but it took serious negotion with the relevant authorities.

coylemj

Kosseegan wrote: »

C is a beneficiary of that estate. C will get nil therefore refusing the entitlement would not affect C.

Yes but it's not really down to C to refuse anything, what we're talking about is the actions by the administrator of B's estate in potentially renouncing B's inheritance from the estate of A in order to increase the amount of money going to the aunts and uncles of C, the siblings of B.

It's clearly a family-driven strategy to reduce the amount of money available to pay the creditors of B and divert that money (B's inheritace from A) into the pockets of the wider family. I'm suggesting that surely in law those creditors would have some remedy to see to it that this couldn't happen.

Kosseegan

The creditors only have a remedy if money actually goes into the estate. The administrator is under no duty to get money into the estate to satisy creditors.
What remedy do you say is available in law for b's creditors?
Nobody is obliged to accept an inheritance any more than anybody is obliged to accept a gift. If B was still alive he could renounce his inheritance if he knew that his creditors would swoop and take it off him. The administrator is simply doing what B would probably do if he was alive.