Splitting the house

bluefaerie

Hello
My MIL passed away a while ago without a will, it was quite sudden. My OH and I live in the house at the moment, he lived there before she passed away. His older sister is applying for probate.
They've decided together how they'll split everything, she gets everything and then they split the house.
His mum has paid of about 80% of the mortgage so obviously 20% of whatever they get goes to the bank. However he says if he stays in the house as we are then she gets 50% of house value as opposed to 50% of sale. Is this correct?

g6jns_2

bluefaerie wrote: »

Hello
My MIL passed away a while ago without a will, it was quite sudden. My OH and I live in the house at the moment, he lived there before she passed away. His older sister is applying for probate.
They've decided together how they'll split everything, she gets everything and then they split the house.
His mum has paid of about 80% of the mortgage so obviously 20% of whatever they get goes to the bank. However he says if he stays in the house as we are then she gets 50% of house value as opposed to 50% of sale. Is this correct?

The intestacy rules apply. These are not optional! Someone has to apply for letters of administration and apply the rules. This shows who inherits.


https://www.gov.uk/inherits-someone-dies-without-will

getmore4less

bluefaerie wrote: »

Hello
My MIL passed away a while ago without a will, it was quite sudden. My OH and I live in the house at the moment, he lived there before she passed away. His older sister is applying for probate.
They've decided together how they'll split everything, she gets everything and then they split the house.
His mum has paid of about 80% of the mortgage so obviously 20% of whatever they get goes to the bank. However he says if he stays in the house as we are then she gets 50% of house value as opposed to 50% of sale. Is this correct?

If they are the only kids and no hubby they should start with everything 50:50. any change is distributions will be PET gifts unless a DOV is done.

If the house is not sold and you keep it then that will need a remortgage or the mortgage paying off first(needs to be paid off by you not from the rest of the estate) and the sis is due 50% of the net value(market value less mortgage).

bluefaerie

getmore4less wrote: »

If the house is not sold and you keep it then that will need a remortgage or the mortgage paying off first(needs to be paid off by you not from the rest of the estate) and the sis is due 50% of the net value(market value less mortgage).

Thanks getmore, that answers my question perfectly. Now I just need to figure out how remortgaging works as he doesn't want to move house.

g6jns_2

bluefaerie wrote: »

Thanks getmore, that answers my question perfectly. Now I just need to figure out how remortgaging works as he doesn't want to move house.

Just to emphasise the point. Do you/they realise they cannot do it without first getting letters of administration? Then they need to do deeds of variation to vary the intestacy split. Add the mortgage complications and it needs to b very carefully thought through. It would be wise to get some professional help if none of those involved has experience of dealing with inheritance issues. Unless everything is done correctly and in the right order there is a significant risk of it all going pear shaped.

getmore4less

bluefaerie wrote: »

Thanks getmore, that answers my question perfectly. Now I just need to figure out how remortgaging works as he doesn't want to move house.

Buying the house off the estate can reduce the complications with mortgage companies.

Definately involve the help of a good broker you will need to meet lending criteria.

If you don't have the cash to pay off the Sis then you will need to raise a bigger mortgage than the current one.

getmore4less

Depending on the numbers a Deed of variation might not be worth the cost and simple gifting will suffice.

Tuesday_Tenor

MiL may have had insurance to pay off the mortgae on her death. Need to check for that.

bluefaerie

SIL is applying for probate at the minute, does that solve the letter of administration issue?

Getmore I didn't realise it was possible to buy the house off the estate?
Will see about a broker as we can't pay the sister off outright.

Tuesday, there is no insurance but will double check.

g6jns_2

If there is no will an application for letters of administration has to be made. This takes the place of a will. Probate only applies if there is a will.

getmore4less

Why has the split been decided the way it is?

As there is no will she will be applying for letters of administration not probate.

In practice it makes little difference.