Brother's Inaction on Inherited Estate Creates Legal Dilemma

An inherited estate, comprising seven properties, remains in limbo due to one of two joint executors failing to take any action on selling the inherited assets. The situation leaves the other executor in a difficult legal position, unable to proceed with estate administration and facing potential liabilities.

Estate Administration Stalemate

The deceased parents' estate, which includes financial products, six rental properties, and the main family residence, was intended to be administered by the two brothers. Following the mother's passing in 2023, an informal agreement was made where one brother would handle the financial products, and the other would manage the liquidation of the properties. While the financial assets have been distributed, the properties remain in the parents' names and are still rented out.

The inaction has led to several issues. The main residence has fallen into disrepair, prompting the local council to demand a council tax levy for a second or empty home. One of the rental flats requires a landlord license, and upcoming regulations for rental property databases will necessitate administration and compliance. Furthermore, essential safety measures like electricity certificates are not in place.

The executor who is seeking resolution expresses a desire to move forward with his future plans, feeling blocked by his brother's refusal to act. He is concerned about the increasing bureaucracy of managing rental properties and wishes to receive his share of the estate.

Legal Duties and Potential Recourse

According to legal experts, the brother who is not acting cannot indefinitely prevent the administration of the estate. As joint executors, both individuals remain jointly responsible for administering the estate and protecting its assets until completion. This responsibility is particularly critical when dealing with multiple rental properties that have specific legal and safety requirements.

Before considering court proceedings, it is advised that the inactive brother be formally contacted in writing. This correspondence should outline the outstanding issues, request an update on the properties, details of rental income and expenditures, and confirmation of the steps he intends to take towards marketing and selling the properties. Urgent matters such as repairs, safety measures, or compliance works should also be addressed in writing, with careful records maintained.

If the brother continues to be uncooperative, the court has powers to assist with estate administration, including ordering the sale of particular assets. However, a more effective solution might be an application to remove and replace the uncooperative executor. The court's primary concern is whether the estate can be administered properly and without unnecessary delay. If an executor's lack of engagement prevents this, the court may appoint a replacement to facilitate the process.

While legal action can be expensive, it may be the most practical way to resolve the situation, especially if the estate is suffering from neglect and potential liabilities due to inaction.

Inheritance Tax Considerations

Regarding inheritance tax, the understanding of how HMRC handles property value fluctuations upon sale is clarified. Inheritance tax is generally based on the property's value at the date of death. Any increase in value after that date typically falls under capital gains tax. Similarly, if a property sells for less than its probate value, reliefs may be available to reduce the inheritance tax payable, potentially resulting in a refund.

Given the number of properties involved, obtaining specialist tax advice before any sales occur is recommended to ensure compliance and to explore available reliefs.