Help Needed With Legal Rights On A Will

purple_haze

The position appears to be that the deceased partner left the OP’s father a right to occupy the property in her will. When the right to occupy finishes, the property reverts to the daughter. An interest in possession trust has been formed, and the daughter as executor is the trustee of this trust.


There is no tenancy. The father as the beneficiary of an interest in possession trust does not need one. He certainly should pay no rent.


We are not told whaty the daughter did with the proceeds of the BTL mortgage, but she could only properly have raised the mortgage in her capacity as trustee of the interest in possession trust. If it was to replace the existing mortgage, the position is too complicated to deal with here (and we’d need to know the wording of the deceased partner’s will).


If, however, she entered into the mortgage simply to raise funds ,the funds could only be used for the purposes of the trust, which would mean any income from the proceeds should be paid to the father as the beneficiary of the interest in possession trust. Having said that, the daughter was almost certainly acting in breach of trust when she raised the mortgage, as there appears no possible benefit to the trust in by simply placing the trust into debt.


The OP’s father should see a solicitor. The solicitor should write in strong terms to the daughter pointing out her responsibilities as trustee and demanding
(a) immediate return of any rent paid by way of restitution and
(b) that she remedy her breach of trust in mortgaging the property or, at the very least, indemnify the OP’‘s father by ensuring the mortgage payments are met from her own resources so that he can continue to enjoy his occupation of the property.

roger196

purple_haze wrote: »

An interest in possession trust has been formed, and the daughter as executor is the trustee of this trust.
.

Is the executor automatically the trustee or would the will have to nominate the daughter as trustee. Until the will is examined, there is uncertainty as to whether a valid trust has been set up or not. See my post 9

GDB2222

Until I read that the property had been mortgaged, I thought this could be sorted out amicably. As things stand, dad needs to see a solicitor urgently. The life interest trusts are not that complicated, so an ordinary high street solicitor should be able to deal with it. If the will is not readily to hand, the solicitor can easily get one from the Registry. The thing is to get on with this quickly, before the daughter undermines Dad's position even more. The Solicitor will advise whether the Police should be involved, which seems extremely likely.

I would just point out that the daughter may owe money back to the will trust but she may not have the means to pay it, so seeing a solicitor quickly is essential, although this may just be a case of shutting the stable door after the horse has well and truly bolted.

roger196

GDB2222 wrote: »

Until I read that the property had been mortgaged, I thought this could be sorted out amicably. The thing is to get on with this quickly, before the daughter undermines Dad's position even more. The Solicitor will advise whether the Police should be involved, which seems extremely likely.
I would just point out that the daughter may owe money back to the will trust but she may not have the means to pay it, so seeing a solicitor quickly is essential, although this may just be a case of shutting the stable door after the horse has well and truly bolted.

Playing devil's advocate:

If the daughter applied for the mortgage without disclosing the existence of the trust, then the mortgage is suspect.
Why do you think that a fraudulently obtained mortgage will be (a) a valid charge on the trust property and (b) affect the rights of the person who holds the interest in posseesion.
If the existence of the trust and/or the interest in possession was disclosed, who would lend on the trust property.

Until the will is examined, there is uncertainty as to whether a valid trust has been set up or not. See my post 9

GDB2222

roger196 wrote: »

Playing devil's advocate:

If the daughter applied for the mortgage without disclosing the existence of the trust, then the mortgage is suspect.
Why do you think that a fraudulently obtained mortgage will be (a) a valid charge on the trust property and (b) affect the rights of the person who holds the interest in posseesion.
If the existence of the trust and/or the interest in possession was disclosed, who would lend on the trust property.

Until the will is examined, there is uncertainty as to whether a valid trust has been set up or not. See my post 9

I agree with you, by and large. The obvious interpretation is that there is a life interest trust with teh daughter as executor. I think that her mortgage (although fraudulently obtained) would still be valid, ie the lenders can get their money back by selling the house. However, I am not a lawyer, and there's probably some 100 year old case that sets out the law on this. A high street solicitor will be able to find out exactly what's happened, and if he needs detailed advice he can get counsel to advise. I'm hoping for the Dad's sake that this is not as bad as I fear it is, because it does not sound like they have bags of money for legal fees.

DVardysShadow

GDB2222 wrote: »

I agree with you, by and large. The obvious interpretation is that there is a life interest trust with teh daughter as executor. I think that her mortgage (although fraudulently obtained) would still be valid, ie the lenders can get their money back by selling the house. However, I am not a lawyer, and there's probably some 100 year old case that sets out the law on this. A high street solicitor will be able to find out exactly what's happened, and if he needs detailed advice he can get counsel to advise. I'm hoping for the Dad's sake that this is not as bad as I fear it is, because it does not sound like they have bags of money for legal fees.

I too think that the mortgage would be valid. But OP's father's lifetime interest would, I believe, take precedence. So effectively, the lender has a mortgage over a property which would not allow them to repo until the death of the father.

I think some fairly quick action is required here. First of all, legal advice to confirm or otherwise that father's lifetime interest has precedence over the mortgage, then let the lender know. I think the sooner they find out about this, the more likely they are to be able to recover their money from the ultimate beneficiary of the mortgage - which will result in less pressure on OP's father.

GDB2222

DVardysShadow wrote: »

I too think that the mortgage would be valid. But OP's father's lifetime interest would, I believe, take precedence. So effectively, the lender has a mortgage over a property which would not allow them to repo until the death of the father.

I think some fairly quick action is required here. First of all, legal advice to confirm or otherwise that father's lifetime interest has precedence over the mortgage, then let the lender know. I think the sooner they find out about this, the more likely they are to be able to recover their money from the ultimate beneficiary of the mortgage - which will result in less pressure on OP's father.

I hope you are right!

DVardysShadow

GDB2222 wrote: »

I hope you are right!

I have thought about it a little more. The lender may be able to repo and resell. But if they did, they would be selling a property where the father has the right to live - and I imagine could prevent viewings.

GDB2222

These sorts of trusts have been around since William I. I suspect that there's case law. It's a balancing act, ie whose interests have precedence, given that both the bank and the life tenant have acted perfectly correctly?

DVardysShadow

GDB2222 wrote: »

These sorts of trusts have been around since William I. I suspect that there's case law. It's a balancing act, ie whose interests have precedence, given that both the bank and the life tenant have acted perfectly correctly?

A and C have acted correctly. B defrauds C by misrepresenting A's interests. It is between B and C. C's losses cannot be put onto A.