Q&As

What action can an executor take where beneficiaries have been overpaid due to a miscalculation and where monies are now required to settle a liability?

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Produced in partnership with Helen Galley of XXIV Old Buildings
Published on LexisPSL on 30/01/2020

The following Wills & Probate Q&A produced in partnership with Helen Galley of XXIV Old Buildings provides comprehensive and up to date legal information covering:

  • What action can an executor take where beneficiaries have been overpaid due to a miscalculation and where monies are now required to settle a liability?

What action can an executor take where beneficiaries have been overpaid due to a miscalculation and where monies are now required to settle a liability?

Where, due to a miscalculation, a beneficiary has been overpaid and the executors need money in order to pay liabilities of the estate, the executors or creditors may have two remedies.

The first is a personal claim against the person or persons overpaid to compel them to refund the overpayment. For further information, see Practice Note: Restitution for unjust enrichment—elements of the claim. The second is a proprietary remedy, including following or tracing, in respect of which, see Practice Note: Proprietary remedies (including following and tracing).

The personal claim is a restitutionary action based on the fact that the beneficiary has been unjustly enriched, ie has by mistake received more than they were entitled to. Tracing is a proprietary right, but is not at all straightforward as the executors will have to show that there is some asset which represents the cash overpaid. The leading case remains Re Diplock. This was a case of mistaken distribution to charities when the gift was not a valid charitable gift. As a result, the gift failed and the next of kin were entitled to take the amount of the gift on intestacy. The Court of Appeal held that the personal restitutionary remedy was a good

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