What happens to a mortgage after death of one party?

Moglet

ILW wrote: »

If you have in effect gifted away part of the estate that was due to other benficiaries, you could find yourself personally liable for making good to them for their losses.

I know but I'm not likely to sue myself and nor is my sister. But if I can do something now to put this right for both of us then I'd like to try. What kind of solictor should I be seeing?

Senior_Paper_Monitor

A very interesting question this one - and one I'm ashamed to say I don't know the answer to (off to do a bit of reading /research) !!

dkmax_2

Moglet wrote: »

What should happen to those funds?

Life policies are paid into the estate and distributed accordingly. People with mortgages should make provision in their will to pay off the mortgage from the proceeds of any such policy, if this is what they want to happen. This is why making a will is so important.

An added element of risk is where the T&Cs of the mortgage require the mortgage to be fully paid up upon the death of any mortgagee.

Good solicitors will make all this very clear during the conveyancing process as it is in the owners' best interests and the solicitor obviously avails of a money making opportunity.

dunstonh

Life policies are paid into the estate and distributed accordingly.

Even on joint owner, first death cases or on life of another?

Moglet

Many thanks to all who have replied.

Insurance company say "although the policy was taken out in connection with the mortgage, the policy was not assigned to the lender" and "death claim is payable to your mothers estate".

I do not know the T&C's of the mortgage as the company refused to disclose anything about the mortgage citing the DPA and the surviving party.

I don't understand life assurance at all but when I spoke to L&G last year they explained it was because it was an ISA fund and had to be separate funds/polices but linked (??) and on the death of either party both policies pay out half the value of the mortgage capital borrowed to each policyholder to do with what they wanted.

Regarding the mortgage - I'm pretty sure that's still ongoing. I recall my SD telling me that the mortgage company wanted more money to close down the mortgage than was paid out in total and he couldn't afford it. I tried speaking to the mortgage company again last year but apart from confirming there was still a mortgage, they wouldn't speak to me. Land Registry title as of last year is still in both names and the original charge is still on there - it hasn't been remortgaged or paid off it would seem.

Moglet

Bit more info. Just rung the mortgage company who have confirmed the mortgage has continued in the sole name of the surviving party and they can't speak to me about the account at all, not even from when it was a joint account. It has the same mortgage account number.

So I assume the terms didn't stipulate the mortgage must be paid off? This would tie with what L&G told me that a new sole policy was now in place with the surviving owner.

What's my next step though?

dkmax_2

dunstonh wrote: »

Even on joint owner, first death cases or on life of another?

Payments that are assigned to someone else have no bearing on the estate of the deceased. The point here is that a life policy pays into the estate and it is up to the will to divert this to the mortgage if that is what is desired. Bear in mind that there may not even be a mortgage at time of death and there may be additional claims on the estate.

The ISA wrapper is a red herring. The money can't go anywhere else other than through the estate.

dkmax_2

Moglet wrote: »

What's my next step though?

What outcome are you looking for?

getmore4less

Moglet wrote: »

I know but I'm not likely to sue myself and nor is my sister. But if I can do something now to put this right for both of us then I'd like to try. What kind of solictor should I be seeing?

Moglet wrote: »

What's my next step though?

http://www.step.org/

Seek advice this is well beyond moy lay persons

Here are a couple of thought though.

From what you have said you were the executor and are one of the benifitiaries with your sister being the other was she also an executor so you have made a joint mistake?

Do you think you could get the money back if you wanted to?

Do you want to?

if you two don't want to persue it is there anyone else that might be able to in the future, do either of you have kids, not sure if they could but the most likely as potential benifitiaries as issue of the benifitiaries in the will.


If it was done wrong one way to tidy it up might be a deed of variation on the sums involved to make the money payable to the mortgage/Step Dad.

Does not help if you want the money back.

Moglet

Yes, I was executor and a beneficiary. My sister wasn't named as an executor only because she wasn't old enough when the Will was made otherwise she would have been.

Could I get the money back...probably not without taking him to court and getting a charging order or similar.

Do I want to...yes but I accept that would put the final nail in the coffin of a very very strained (well non existant if I'm honest) relationship and ensure he doesn't *do the right thing* and bequeath half the house to us when his time comes (assuming there is a house when that happens).

Neither of us have kids but the Will didn't mention grandchildren or potential ones.

Don't understand the bit about a Deed of Variation, the mortgage company have already had half (at least) of their money.

Thanks for your thought though. I've made an appointment with a solictor for next Friday. I should have done this 5.5 years ago.