Derby solicitors For cheap fixed price probate, conveyancing & divorce call friendly local Derby lawyer , Gary Dickie , at Mc Intosh Fleming on (01332) 518135 . Fixed fees not “estimates” or hourly charging unlike most other Derby solicitors. Read more about Derby Solicitors Subject to the directions of the will, the order in which assets are to be applied in the discharge of the debts and liabilities is based upon the presumed intentions of the testator, and these have been given statutory form. When an estate is insolvent, the contest is between the creditors among themselves as to the priority in which their debts are to be paid. When an estate is solvent, the creditors are paid in full and the contest is between the beneficiaries among themselves: (1) as to the order in which resort is had to the various parts of the estate for payment of the debts and liabilities; and (2) what parts of the estate are charged with payment of the pecuniary legacies and in what order. Both these matters which arise in the administration and distribution of a solvent estate are to be determined primarily by the directions, if any, contained in the will, and the statutory order of application of assets takes effect subject to those directions. Accordingly, where a testator combines his real and personal estate in one general fund, and directs the whole of that fund to be applied for the payment of debts or legacies, the creation of the mixed fund excludes the statutory order of application of assets, and the real and personal estate must be applied in the discharge of the debts or legacies rateably according to their respective values. A gift of real and personal estate together, coupled with a direction to sell and to pay debts or legacies out of the proceeds, creates a mixed fund; a direction that the real estate is to be sold and that the proceeds of sale are to be considered as part of the personal estate will have the same effect. It is not necessary that there should be an absolute conversion directed by the will; a power of sale may be sufficient if, from the terms of the will as a whole, it can be gathered that the testator had the intention of creating a mixed fund. The mere gift of real and personal estate together, coupled with a direction to pay debts or legacies, or a trust for the payment of debts or legacies, is not by itself sufficient to constitute a mixed fund in the absence of words in the will showing an intention on the testator’s part that his real estate should be sold for the purpose of meeting the debts or legacies. The creation of a mixed fund is not the only way by which the statutory order for the payment of funeral, testamentary and administration expenses, debts and liabilities, can be displaced. Accordingly, a direction for payment of such expenses out of the proceeds of the conversion of the testator’s personal estate, or a gift of residue subject to the payment of such expenses, is sufficient to exclude the statutory order so far as it provides primarily for payment out of property undisposed of by will; but a mere direction to pay such expenses, followed by a gift of residue, or a gift of residue followed by a direction to pay duty, will not exclude the statutory order. Again, an express charge of such expenses on specific bequests, followed by a gift of residue to a legatee other than the legatees of the specific property, excludes the statutory order and renders such expenses primarily payable out of the specific bequests to the exoneration of residue, whereas a charge of such expenses on a legacy, the residue being undisposed of, is insufficient to exclude the statutory order so as to make the legacy the primary fund for payment in place of the undisposed of estate. The right to exoneration does not endure for the benefit of a person who becomes entitled to a lapsed gift, whether the fund appropriated to the exoneration is one of realty or of specific personal assets, the right to the benefit of the exoneration being, in fact, a part of the legacy which has failed. The statutory order of application applies to the discharge of unsecured debts, whereas secured debts are primarily payable out of the property on which they are charged. In accordance with this principle, where a person has contracted to purchase property and dies before paying the purchase money, the property contracted to be purchased is primarily liable for the unpaid purchase money, unless by his will or deed or other document he has signified a contrary intention, and a devisee or successor is not entitled to have the unpaid purchase money discharged or satisfied out of any other part of the testator’s estate. The principle of marshalling in the administration of assets is a process of adjustment directed to ensuring that assets are ultimately applied in accordance with their proper order of liability, notwithstanding that in the actual course of administration assets more remotely liable have been used in priority to those more immediately liable. Accordingly, where debts are charged on real estate, but are in fact paid out of personalty, with the result that pecuniary legatees are disappointed, the legatees have an equitable right to compensation, and to have the assets marshalled so as to render the real estate charged with debts available for their legacies. The doctrine of marshalling in this connection is considered elsewhere in this work.