Is My Uncle’s Handling of the Will and Company Legal?

Question from Poll, Is My Uncle’s Handling of the Will and Company Legal?

Answer from AI:

When a family member passes away and leaves shares in a family company, it can create complex legal and financial situations. In your case, your uncle, who is the executor of your grandmother’s will, is making decisions that affect the company’s finances and the distribution of salaries and dividends. Let’s break down the key issues and relevant legal principles in the UK.

Executor’s Duties and Responsibilities

An executor has a fiduciary duty to act in the best interests of the beneficiaries of the will. This includes:

• Administering the estate according to the terms of the will.
• Paying any debts and taxes owed by the estate.
• Distributing the remaining assets to the beneficiaries.

If your uncle is using the estate’s money for personal gain or to avoid taxes, he may be breaching his fiduciary duties. Executors must act transparently and in accordance with the law.

Company Law and Directors’ Duties

As directors of the company, you, your mum, your uncle, and your cousin have certain legal responsibilities under the Companies Act 2006. These include:

1. Acting within your powers as set out in the company’s constitution.
2. Promoting the success of the company for the benefit of its members.
3. Exercising independent judgment.
4. Avoiding conflicts of interest.
5. Not accepting benefits from third parties.
6. Declaring any interest in proposed transactions or arrangements.

If your uncle is refusing to pay salaries and dividends despite the company making a profit, he may be failing to promote the success of the company and acting against the interests of its members.

Holding Board Meetings

Board meetings are essential for making key decisions and ensuring that all directors have a say in the company’s management. The company’s articles of association typically outline the procedures for calling and holding board meetings. If your uncle is refusing to hold meetings, he may be violating these procedures.

Steps You Can Take

If you believe your uncle is acting unlawfully, you may consider the following steps:

1. Request a Board Meeting: Formally request a board meeting in writing, citing the company’s articles of association.
2. Seek Mediation: Consider mediation to resolve disputes amicably.
3. Consult a Solicitor: Seek legal advice from a solicitor who specializes in company law and probate matters.
4. Report to Authorities: If you suspect serious misconduct, you may report it to the relevant authorities, such as the Insolvency Service or the police.

Legal Advice and Resources

Given the complexity of your situation, it is crucial to consult with a legal professional who can provide personalized advice. Here are some resources that may help:

• UK Government: Wills, Probate, and Inheritance
• The Law Society: Using a Solicitor

Remember, this information is intended to provide a general understanding of the legal principles involved. For specific advice tailored to your situation, please consult a qualified legal professional.