Life tenant owning property and getting capital appreciation on disposal

earlycomputers

Can anyone advise me whether a life tenant of a property (someone who, via a will, has been allowed to stay in a property until they die or leave the UK for 12 months or more), is normally allowed to a) have their name on the title deeds as being the owner of this property and b) have a majority percentage of the profit on this property on it's sale/disposal? My late father stated in his will that his wife could stay in his property (as this is where they were living together) until she either dies or leave the UK for 12 or more months, where upon the property would pass to his children. Should his wife be on the title deeds as the only owner? Myself and siblings are only mentioned as 'second charge', the first charge being the mortgage lender. A deed of variation drawn up after my father died states that his wife gets 56% of the value of the property on its disposal and we, his children , have to pay her back all her mortage payments! I also thought life tenants were normally responsible for all outgoing payments on the property including mortgage payments. Myself and siblings are also having to pay for her mortgage application costs. Is this standard practice? hope someone can advise as i think I may have to arm myself with a good lawyer..

Yorkshireman99

earlycomputers wrote: »

Can anyone advise me whether a life tenant of a property (someone who, via a will, has been allowed to stay in a property until they die or leave the UK for 12 months or more), is normally allowed to a) have their name on the title deeds as being the owner of this property and b) have a majority percentage of the profit on this property on it's sale/disposal? My late father stated in his will that his wife could stay in his property (as this is where they were living together) until she either dies or leave the UK for 12 or more months, where upon the property would pass to his children. Should his wife be on the title deeds as the only owner? Myself and siblings are only mentioned as 'second charge', the first charge being the mortgage lender. A deed of variation drawn up after my father died states that his wife gets 56% of the value of the property on its disposal and we, his children , have to pay her back all her mortage payments! I also thought life tenants were normally responsible for all outgoing payments on the property including mortgage payments. Myself and siblings are also having to pay for her mortgage application costs. Is this standard practice? hope someone can advise as i think I may have to arm myself with a good lawyer..

This sounds very odd. For a DOV to be valid all the affected beneficiaries have to agree. Did that happen? It seems particularly odd that the mortgage company would agree to such an arrangement. Even if the mortgage is secured on the property the debt is owed by the borrower. So assuming there was enough money in the borrower's estate the mortgage would be repayable from there. Perhaps you need to do some more research before a definitive answer can be given.

getmore4less

Who was executor?

How was the house owed prior to his death.

Who are the beneficiaries(were they over 18 on death).

Did the will specify the trustees.

How big was the mortgage/value of the house at the time.

earlycomputers

yes myself and siblings all signed the DoV but were not advised to get legal advise as we trusted the executor who is also the solicitor implicitly - assuming he was working in our interest. We obviously all completely regret signing it now and am planning to take action over the poor handling and admin of this case. But I want to know what is the norm in the case of a life tenant benefitting from capital etc? If this DoV hadn't been written, what would normally happen re a life tenant? Surely they don't normally have their name down on the title deeds as being the owner of the property? Why would a life tenant be granted part of the profits of any value of such a property on its disposal? Does this happen often and why? re your questions - yes beneficiaries all over 18 and myself & siblings plus his wife and the executor are all in the 'trust'. My father had intended his life policies to pay off the remaining mortgage, but unfortunately it was discovered that he didn't have enough life policy to cover this, hence the need for his wife to get a mortgage. The property was all in my dad's name. Thanks

Savvy_Sue

Solicitors work in the best interests of whoever is paying them. In this case, their fees come from the estate, because they were named as executor in the will.

But it does sound REALLY odd that they would prepare a Deed of Variation, and someone must have instructed them to do this.

You're going to need to consult another solicitor. It's going to get messy, and probably expensive.

Yorkshireman99

earlycomputers wrote: »

yes myself and siblings all signed the DoV but were not advised to get legal advise as we trusted the executor who is also the solicitor implicitly - assuming he was working in our interest. We obviously all completely regret signing it now and am planning to take action over the poor handling and admin of this case. But I want to know what is the norm in the case of a life tenant benefitting from capital etc? If this DoV hadn't been written, what would normally happen re a life tenant? Surely they don't normally have their name down on the title deeds as being the owner of the property? Why would a life tenant be granted part of the profits of any value of such a property on its disposal? Does this happen often and why? re your questions - yes beneficiaries all over 18 and myself & siblings plus his wife and the executor are all in the 'trust'. My father had intended his life policies to pay off the remaining mortgage, but unfortunately it was discovered that he didn't have enough life policy to cover this, hence the need for his wife to get a mortgage. The property was all in my dad's name. Thanks

This suggests something is seriously wrong. A life tenant is just that. The tenant has the right to occupy the property for life or a shorter period if specified. Each person signing a DOV must have independent legal advice which you say did not happen. This may well make the whole scheme in valid. It is crucial that you establish the way the property was held before the death of your father. AFAIK no building society of bank would lend money to a life tenant as there is not security whatsoever. I suggest that you get urgent legal advice to try and unscramble the mess.

gettingtheresometime

Wouldn't the property have to be held in trust ?

My FIL wrote a very similar will (the only difference is that the life tenant was his partner rather than wife) and I'm sure that his house is held in trust.