5 Inheritance disputes that slow sales down

Under the Inheritance Act 1975, disputes or claims against an estate, in most cases, can only be made within 6 months of the Grant of Probate being granted. Under normal circumstances, the probate process can take between 9-12 months, and, if you throw in court disputes or claims against the estate, this can drag the process on for two and a half years (average).

In a survey by IBB Law, 36% of inheritance disputes were resolved through mediation, 21% through negotiation and 57% resolved without court involvement. In cases where litigation is necessary, it could take an additional 12 to 24 months to resolve a dispute. 

Inheritance disputes arise when disagreements occur over the distribution of an estate. Across the UK, the amount of inheritance disputes is on the rise, with contested probate cases in the High Court rising by 11% between 2021 and 2022.

26% of disputes occur because a beneficiary is unhappy with the amount of inheritance they are entitled to (IBB Law). And, that’s before the probate process has even begun!

This article has been created specifically with executors in mind, and will outline the five most common disputes and their impact on trying to sell a house during probate.

1. Will disputes (not against executor)

If a will dispute occurs before probate is granted (validity dispute), you do not have the legal authority to sell the property – you will need to wait until this dispute has been resolved (although, it could take months).

Disputes against the will can come from third parties like unmarried partners, step children or another dependent, or it can come from beneficiaries outlined within the will. 

As the executor, it is your responsibility to investigate the dispute, gather information and justify the will against the claim:

• Gather any relevant information, including the will, any prior wills, medical records, opinions from the deceased’s GP or nursing staff.

• Proactively communicate with the disputing parties, and try to avoid making any promises or admissions.

• Consider mediation early to potentially resolve court proceedings.

We would recommend seeking immediate advice from a specialist probate solicitor. They will be able to help guide you through the proper recourse, and hopefully come to a resolution that benefits all parties – without going to court.

If probate has been granted, you should proceed with the sale, unless a court orders you not too. 

2. Beneficiaries challenging your decisions

If there are beneficiaries in the will, and they don’t agree with your decisions, then they can claim you are mismanaging the estate, being biased towards other beneficiaries, or making decisions without consulting them.

As a result, beneficiaries may attempt to block your decisions through legal action or just simply refusing to cooperate. Under the Administration of Estates Act 1925, it is your duty to stay in communication with your beneficiaries, and act in the best interests of the entire estate:

• Maintain records of all decisions and communications between parties.

• Provide clear, written explanations to beneficiaries for decisions.

• If a beneficiary objects, address their concerns in writing.

If they accuse you of unfair decisions, then you will need to prove that you have been transparent throughout the process. If disputes cannot be resolved, you can seek a court order to force the sale of the property – which means your actions are legally protected.

3. Beneficiary disputes over house sale

If a beneficiary was supposed to inherit the property, as stated in the will, but it needs to be sold to pay for outstanding debts, then the beneficiary may try to stop the sale process through the dispute.

As the executor of the estate, you have the legal duty to style the payment of estate debts before distributing assets to beneficiaries. In order to avoid a dispute, you can:

• Provide the beneficiary with proof of the estate’s debts and the lack of liquid assets (cash).

• Justify your legal requirement to sell the property to settle the debt.

• Explore alternatives, like the beneficiary buying the property or taking on the debt themselves – as long as it doesn’t disadvantage other beneficiaries.

If the beneficiary continues to be uncooperative and disputes the sale, you should keep documentation of every conversation, and make sure you only communicate in a written format like email. 

You should also be prepared for them to take legal action against you, and have steps in place to try mediation to reach a beneficial resolution, before going to court.

4. Disputes over loan repayment

If you took out a loan, be it executor or bridging, to pay off the Inheritance Tax, and need to sell the house to repay the loan –then beneficiaries may argue if it was unnecessary, especially if they weren’t consulted. 

If you did take out a loan (a standard practice), you should have done it in the best interests of the estate, and be able to justify the loan. To protect yourself, you can:

• Keep detailed records of why the loan was necessary, including; evidence of the estate’s lack of liquid assets, documentation of the Inheritance Tax due, evidence that you had explored other avenues.

• Communicate proactively with the beneficiaries, or even consult them, about the need to use the loan (document the conversations).

If a dispute arises over the loan payment, then you will need to show the documentation to prove you acted in the best interests of the estate. Attempt mediation, before going to court.

5. Executor misconduct claims

Possibly the most important for you, if a beneficiary feels that you have made poor financial decisions or haven’t acted in the best interests of the estate, they can apply to the courts to have you removed. 

During this period, the probate process will freeze, and you will lose the ability to act on behalf of the estate. If the house is still going through the sale process, this will also halt until the issues are resolved.

As the executor, it is your responsibility to act honestly and executor misconduct claims can have some personal liability – as you will be held for losses caused by your misconduct. To avoid any misconduct claims, you should:

• Immediately seek legal advice from your solicitor.

• Gather all records related to the estate administration, including financial records, communications and documentation of decisions.

• Cooperate fully with any investigation, under the guidance of your solicitor.

• Be prepared to defend your actions in court.

• Consider whether stepping down as executor is the best course of action, even if you believe the claims have no substance.

If it goes to court, you will need to prove you acted in good faith and made decisions to better the process. If the beneficiaries won’t stand down, then you can, and appoint someone to be an administrator for the rest of the process.

Here at The Property Buying Company, we work with a dedicated panel of nationwide solicitors, to offer guidance to executors, administrators, and beneficiaries looking to sell their probate or inherited property. We can work with all parties involved to come to a beneficial resolution through mediation, and help your sale stay on track.