Life tenant and executor legal expenses questions

nom_de_plume

Yorkshireman99 wrote: »

Nobody but the owner, the supposed life tenant, has any liability for the mortgage. That rests solely with who ever took out the mortgage. The executor(s) are responsible along with those who signed the DOV for any losses the estate has suffered. Quite why the beneficiaries should have agreed to such an arrangements beggars belief.

There's a lot of unknowns in this case. I'm reading between the lines in that the property had a mortgage on it at the time of the testator's passing and so, to retain the property, it would have been necessary for the beneficiaries (OP included) to inject cash into the equation in one form or the other. Also, reading between the lines, it sounds that the beneficiaries had terms thrust upon them, the consequences of which they are just discovering.

getmore4less

If there was a mortgage then it would be possible and perfectly reasonable and legal for the the person given a life interest in the equity to buy out the mortgaged part of the property and take ownership of that share outright.

The default for secured debts is they stay with the security unless there is something specific in the will to say pay it off using other assets.

Not clear if that is what the 56% would be but the estate paying the interest does seem a bit unusual.

A life tenant may not be responsible for the upkeep of the property, it should be part of the interest in possession trust set up by the will.

It is pretty clear that the op/children did not have a clue what was happening and not sure they have a clue now.

Only someone with all the docs in front of them will be able to determine what did and should have happened.

Claiming 100% of the house when there was not 100% in the estate to start with might not be a smart move.

Also if there was supposed to be life cover there would have been payments at some point wonder how hard they looked for it.

Keep_pedalling

I would have thought if there really was life cover it would easily be tracked down through the deceased persons bank account. Unfortunately all too often people cancel things like this to save a bit of money and if there were no regular payments going to insurance companies it almost certainly was not in place.

earlycomputers

What we have here is a the following situation:
'A' dies and leave a Will. He wishes 'B' to live in his house as a life tenant and 'C' to receive 100% of his house at the end of the life tenancy. 'A' believed there was an insurance policy to cover the mortgage on his house so 'B' could live there rent free. It was discovered that there was no such insurance policy. 'A's house and interest-only mortgage was in his name. The decision was taken, after 'A's death, to put the interest-only mortgage and house in 'B's name and allow 'C' to own 44% of the property. 'C' has to pay back 'B's mortgage payments at the end of the life tenancy.
The question is - were there any alternative options to the above that could/should have been taken? One that could honour the wishes of 'A'?

FreeBear

Somewhere along the line, the mortgage company will want their money back. If there was no insurance policy or lump sum in the estate (from a pension pot perhaps) to pay off the equity, then the house will have to be sold and the bequest fails.

bebewoo

As Freebear says you have bigger problems as an interest only mortgage will not repay the capital, and at the end of the mortgage term the capital sum will need to be repaid to the bank.
How will that be done without selling the house?

earlycomputers

So if the other option would be to have sold the house, who should have got the profit? The life tenant or the beneficiaries?

unforeseen

earlycomputers wrote: »

So if the other option would be to have sold the house, who should have got the profit? The life tenant or the beneficiaries?

Whoever was due to get the residual assets of the estate as the life interest part of the will would have failed

getmore4less

earlycomputers wrote: »

What we have here is a the following situation:
'A' dies and leave a Will. He wishes 'B' to live in his house as a life tenant and 'C' to receive 100% of his house at the end of the life tenancy. 'A' believed there was an insurance policy to cover the mortgage on his house so 'B' could live there rent free. It was discovered that there was no such insurance policy. 'A's house and interest-only mortgage was in his name.

There is not a100% hosue to give away in the will only the equity, how miuch is the mortgage(% of house will do)

The decision was taken, after 'A's death, to put the interest-only mortgage and house in 'B's name and allow 'C' to own 44% of the property.

that makes sense B buys out the equity covered by the mortgage and owns that bit

'C' has to pay back 'B's mortgage payments at the end of the life tenancy.

why? B now owns that bit with mortgage(they should pay the interest on that mortgage) to do with as they want, if C wants to buy it off the estate of B then that would be one way to do it.

The question is - were there any alternative options to the above that could/should have been taken? One that could honour the wishes of 'A'?

If the primary wish was for B to remain in the property then someone needed to pay of the mortgage that A had.

B does it they own that bit of the house,
estate does it then it remains the property of the trust with a life interests.


Would depend on the wordings what would happen if sold.

getmore4less

what does the DOV say?
(if B bought out the mortgaged equity a DOV would not have been needed)

what was the outstanding mortgage as a % of the house.

what is not clear is how the original beneficiaries retain the the beneficial ownership which you suggest is happening(along with the liability for the mortgage debt).