Hello, my Father in Law’s Will contains sections covering Legacies, Gift of Residential Property and Residue.
The legacies amount to about £70k, the property is worth about £360k and we don’t think there are any significant savings.
The Gift of Residential Property provides a mechanism for establishing a market value and specifies that the property will be transferred to my Father-in-Law’s son provided he pays a certain percentage of the market value to each of his sisters (including my wife).
The residue is to be distributed equally between the children.
Am I correct in assuming that any shortfall in paying the legacies from other assets will need to be paid entirely by my Brother-in-Law from the value he receives from the property.
Many Thanks
Hi Des, and thank you for a really interesting query.
As a general rule of thumb, (1) cash legacies take precedence; and then (2) residue is paid in the proportions set out in the residuary clause. And, if a beneficiary wants to take an asset on account of their entitlement to residue, unless the will states otherwise, you would expect the net outcome to be that (the asset concerned included) the residuary beneficiaries end up with the correct percentage they are set to receive – whether that is cash or assets.
But, it all comes down to the terms of a particular will. And here, what sounds important is establishing if the house is a specific gift to your brother in law (known as a device of property), or does it pass silently under the clause of residue (albeit seemingly with some sort of buy out clause)?
Check out these further articles that might be of help:
Cash Legacies
Legacy or Residue
When are Legacies paid?
Hope this helps, and thank you again for reaching out to QLAW!