Probate delayed/ trying to sell the property

Mummy_Bean

So my grandparents owned a house outright (it was only in my Granddads name). He died 6 years ago with a Will which clearly stated it was to be left to my Nan - however nothing was ever done to actually move it into her name. (All current accounts/savings were transferred into her sole name before his death)

She then passed away at the beginning of the year leaving a Will which stated that the house was to be passed to her 3 sons (my dad and 2 uncles) who are all joint executors of the estate.

When she passed again nothing was done with the property and no probate forms were completed. They closed down all the current/savings accounts as they only held minimal amounts (under £5k) and split the money.

I would now like to buy the property - some thing that me and my Nan had agreed before she even fell ill, and something the sons have all agreed to. I have waited until now to actually buy it as I was on maternity leave and wanted to wait until my income was better before raising another mortgage.

So were now in a position to move pretty quickly getting the mortgage but I am worried that sorting the ownership of the house is going to take forever.

It is my understanding that the sons will have to apply for probate twice once from my Granddad to my Nan and the again from her to the sons.

My question is when they do ever get round to doing probate the fact they left it so long will this cause any major issues with the courts?? - as hopefully the fact there is clear Wills leaving line of succession for the property I was hoping it would be a pretty quick process.

Also in regards to inheritance tax - I know the individual limit is £325 k but jointly is £650k - will this joint limit still apply with all the delays? Just when she passed away the house was valued at £285k but with the crazy rise in house prices in London it could easily be worth above the £325k limit (in fact 2 other identical properties have gone up for £360k in the past weeks)

Thanks in advance for you advice.

Crabapple

There shouldn't be any problem with the Probate court simply because of the time, no. As long as they can provide values for the Estate of your grandfather as at that time it's fairly straightforward and far from unheard of for applications to be done years after the event, especially where there was a surviving spouse.

You are right in that Grants to both Estates will be required.

The only issue on timeframes would be with IHT, but there would be none payable in the first Estate since it all passed to a spouse, and the nil-rate band will transfer so there will be a limit of £650k available now.

g6jns_2

Mummy_Bean wrote: »

So my grandparents owned a house outright (it was only in my Granddads name). He died 6 years ago with a Will which clearly stated it was to be left to my Nan - however nothing was ever done to actually move it into her name. (All current accounts/savings were transferred into her sole name before his death)

She then passed away at the beginning of the year leaving a Will which stated that the house was to be passed to her 3 sons (my dad and 2 uncles) who are all joint executors of the estate.

When she passed again nothing was done with the property and no probate forms were completed. They closed down all the current/savings accounts as they only held minimal amounts (under £5k) and split the money.

I would now like to buy the property - some thing that me and my Nan had agreed before she even fell ill, and something the sons have all agreed to. I have waited until now to actually buy it as I was on maternity leave and wanted to wait until my income was better before raising another mortgage.

So were now in a position to move pretty quickly getting the mortgage but I am worried that sorting the ownership of the house is going to take forever.

It is my understanding that the sons will have to apply for probate twice once from my Granddad to my Nan and the again from her to the sons.

My question is when they do ever get round to doing probate the fact they left it so long will this cause any major issues with the courts?? - as hopefully the fact there is clear Wills leaving line of succession for the property I was hoping it would be a pretty quick process.

Also in regards to inheritance tax - I know the individual limit is £325 k but jointly is £650k - will this joint limit still apply with all the delays? Just when she passed away the house was valued at £285k but with the crazy rise in house prices in London it could easily be worth above the £325k limit (in fact 2 other identical properties have gone up for £360k in the past weeks)

Thanks in advance for you advice.

The two estates will need to be submitted to probate either with wills or letter sof administration. Whoever took the money has defrauded the estate. You may need paid for professional advice to sort out the mess.

Tuesday_Tenor

g6jns wrote: »

Whoever took the money has defrauded the estate.
You may need paid for professional advice to sort out the mess.

That's rather sweeping.

If the three sons , due to be executors, were the only or main beneficiaries then they have made themselves an interim payment. As they hadn't yet officially got themselves the grant of probate then they were a little out of order, but I'd hardly call it defrauding the estate.

With the passage of time they have now made the form-filling more difficult for themselves in estimating the values of things at earlier times.

But with one property and small cash assets to account for, it's hardly a mega-mess, so unless there are complexities in the wills we don't know about, then I don't see the need for getting a solicitor involved.

OP seems to have a good grasp of the probate process, so can support the executors if they have not.

Savvy_Sue

g6jns wrote: »

The two estates will need to be submitted to probate either with wills or letter sof administration. Whoever took the money has defrauded the estate. You may need paid for professional advice to sort out the mess.

Surely if the will said everything was to be split between the three sons and they divvied up the money between them, then no-one has defrauded the estate.

However, the uncles might want to consider whether they will be liable to CGT, depending on what the property was worth at Grandma's death, and what it is worth at the time of sale, and whether their share of the proceeds might tip their own estates into the realm of IHT. If they don't actually need the money, then a Deed of Variation might be worth considering - that only works if they don't need the money and are feeling particularly generous, of course! And would probably only be wise if the OP is the only grandchild.

Mummy_Bean

Thanks for the responses.

The estate is as you say pretty straight forward as only 1 property with clear Wills in place which very simply passed it on equally split to the 3 sons.

Glad to know hopefully the process shouldnt be to difficult...it will just be a case of getting a realistic valuation of the property 6 yrs ago when my grandfather passed.

The capital gains is an issue as all 3 sons are in 'need' of the money (although would have preferred their parents alive) and property prices in London have gone mad this past year. We had 3 estate agents give the property a value of between 260-280 in Jan 14 who have now said we could get £330+ and this for a tiny 2 bed Victorian cottage with no heating, windows and half collapsed roof.

Do you have any idea on a really rough time line on how long it might take to get probate? I know the house was never registered with Land reg as it was bought over 55yrs ago...so were hoping once probate granted and my mortgage sorted we can put it straight into my name ...saving time and money

Mummy_Bean

g6jns wrote: »

The two estates will need to be submitted to probate either with wills or letter sof administration. Whoever took the money has defrauded the estate. You may need paid for professional advice to sort out the mess.

When it came to the current accounts all the banks said as the individual amounts were under £5k they released the funds with just proof of death and copy of the Will. They did put all the money in one account which was the divided up...so hopefully there should be a good paper trail should any one question it.

g6jns_2

Savvy_Sue wrote: »

Surely if the will said everything was to be split between the three sons and they divvied up the money between them, then no-one has defrauded the estate.

However, the uncles might want to consider whether they will be liable to CGT, depending on what the property was worth at Grandma's death, and what it is worth at the time of sale, and whether their share of the proceeds might tip their own estates into the realm of IHT. If they don't actually need the money, then a Deed of Variation might be worth considering - that only works if they don't need the money and are feeling particularly generous, of course! And would probably only be wise if the OP is the only grandchild.

Unless, and until, the will, is admitted to probate none of the beneficiaries has any legal right to the money. There may well have be creditors who are entitled to be paid. The bank are also at fault for handing over funds without proper authority.

g6jns_2

Mummy_Bean wrote: »

Thanks for the responses.

The estate is as you say pretty straight forward as only 1 property with clear Wills in place which very simply passed it on equally split to the 3 sons.

Glad to know hopefully the process shouldnt be to difficult...it will just be a case of getting a realistic valuation of the property 6 yrs ago when my grandfather passed.

The capital gains is an issue as all 3 sons are in 'need' of the money (although would have preferred their parents alive) and property prices in London have gone mad this past year. We had 3 estate agents give the property a value of between 260-280 in Jan 14 who have now said we could get £330+ and this for a tiny 2 bed Victorian cottage with no heating, windows and half collapsed roof.

Do you have any idea on a really rough time line on how long it might take to get probate? I know the house was never registered with Land reg as it was bought over 55yrs ago...so were hoping once probate granted and my mortgage sorted we can put it straight into my name ...saving time and money

Impossible to say how long. Given the mess the two estates are in somebody needs to grasp the various nettles and get it sorted out. I very much doubt it is something any of the interested parties can DIY since there are all sorts of legal pitfalls. In particular HMR&C are going to be scrutinising it closely. Timely professional advice may well save the parties more than it costs.

Crabapple

Mummy_Bean wrote: »

The capital gains is an issue as all 3 sons are in 'need' of the money (although would have preferred their parents alive) and property prices in London have gone mad this past year. We had 3 estate agents give the property a value of between 260-280 in Jan 14 who have now said we could get £330+ and this for a tiny 2 bed Victorian cottage with no heating, windows and half collapsed roof.

As you haven't applied for Probate, get an updated valuation. You could submit a higher value for Probate purposes to minimise any CGT. Even in a rising market it seems bizarre that a house in poor condition would have risen that much in only a few months!

They can technically appropriate the house to themselves which would give them a CGT allowance each against the value, plus can deduct reasonable selling costs including legal fees and the like, so the CGT should be minimal.

g6jns wrote: »

Unless, and until, the will, is admitted to probate none of the beneficiaries has any legal right to the money. There may well have be creditors who are entitled to be paid. The bank are also at fault for handing over funds without proper authority.

There are various situations where a Grant is not required, small Estates being one of them. The bank will have insisted on a small estates indemnity. Technically they shouldn't have signed it as they would be needing a Grant to the Estate for the house, but the bank hasn't done anything wrong here, it's normal procedure.

The Executors having collected the funds is okay, and as long as they settle any debts (there will be some final utilities etc) from the house sale then there's no real issue.

g6jns_2

Crabapple wrote: »

As you haven't applied for Probate, get an updated valuation. You could submit a higher value for Probate purposes to minimise any CGT. Even in a rising market it seems bizarre that a house in poor condition would have risen that much in only a few months!

They can technically appropriate the house to themselves which would give them a CGT allowance each against the value, plus can deduct reasonable selling costs including legal fees and the like, so the CGT should be minimal.



There are various situations where a Grant is not required, small Estates being one of them. The bank will have insisted on a small estates indemnity. Technically they shouldn't have signed it as they would be needing a Grant to the Estate for the house, but the bank hasn't done anything wrong here, it's normal procedure.

The Executors having collected the funds is okay, and as long as they settle any debts (there will be some final utilities etc) from the house sale then there's no real issue.

Sorry but I have to differ. Until the executors have probate they have little or no authority to act in respect of the estate. The whole purpose of admitting a will to probate is to prove that it is valid and to confirm the executors can act. They may have paid the debts that they are aware of but there may be others and unless a statutory notice is published money may be due to those who have no knowledge of the death. Just doing as they please undermines the whole process. Furthermore they may find that they are personally liable for penalties levied by HMR&C. As for the bank they should not release funds before probate except, for example, paying a funeral director. Probate may be bureaucratic but it does offer some protection against lazy and incompetent executors.