Estate liability position?

ExecutorDee

My elderly mother bought a house in 2006 with my sister and sisters partner.
They all had joint and several liability for the mortgage, although my mother had put in a large cash sum and it was understood by all that the mortgage was my sister and her partners responsibility.
The house was owned as co-tenants not jointly.
When she died in 2011 her share was bequeathed to me. My sister and her partner continued to live in the house and pay the mortgage.
My sister and her partner failed to pay the mortgage reliably and he has now been declared bankrupt.
The mortgage company have refused to release the estate from liability, although they have not ever asked the estate to make mortgage payments or sent statements of account.
The remainder of the estate has been fully disbursed, mainly to me.
I have now discovered as executor I am personally liable for any mistakes for up to 12 years from her death. If the mortgage company decide to ask the estate to pay the mortgage there is no money in the estate account, so am I personally liable as the executor ? Does the mortgage debt become taken over by the other signatories or does it stay with the 1/3 share? I have refused to inherit the share as I want no association with their finances (or existance) and was hoping they would buy it from the estate.

AnotherJoe

If ever a post needed a solicitor getting involved, this one does.

Thrugelmir

ExecutorDee wrote: »

I have now discovered as executor I am personally liable for any mistakes for up to 12 years from her death.

Yes executors are personally liable. You should have sought advice at the time rather than not deal with matters in the correct manner.

getmore4less

The estate/beneficiary will become liable for all the mortgage.
If you are the beneficiary executor liability is the same thing in practice as the debt stays with the property unless specially said otherwise in the will.
If you did not want your share of the house that should have been sorted during administration.

f they are bankrupt then the equity that is attached to the mortgage should stay with the mortgage.

The rest of their shares should be used to pay their debts.

Sell the place seems an option to clear the mortgage and release the equity for your share and their creditors.

You are going to need help with this. Their bankruptcy administrator should be interested is solving the property issues to get their hands on the equity, you may be able to buy them out and force a sale.

getmore4less

Was a deed of trust drawn up on purchase stating the shares and responsibly for the debt?

ExecutorDee

Hi. Yes, solicitor has been involved all along....there was no deed of trust re house purchase and before mum died she sued for negligence and won. sister and her partner bullied mum until she fled but then refused to sell house and repay her investment. sick old lady taken for a ride.

I was named as executor in the will, along with solicitors. No one ever explained how this made me liable. Solicitor sorted out all assets and disbursements. Solicitor now asking me to sign paper absolving them from liability...which seems to leave me carrying the can if the mortgage co make a claim. This is why i am trying to find legal position and second opinion.

All money disbursed to me has been spent to clear debt and to buy a small terraced house which I have since remortgaged. If mortgage co come after me as executor I could lose my inheritance and my house because sister and partner are scum. Unfair!

ExecutorDee

Also...estate considered to force sale to get away, as no way i want the link with sister and partner. trustee for bankruptcy was going to do this too so we did not proceed. Then trustee decided house in negative equity due to damage they have done vs fines from mortgage co so something was done about bankrupt paying £1 to trustee. I don't understand this bit. End result, house is not sold, estare is disbursed, mortgage may still apply to estate.

ExecutorDee

All done by solicitor. I did none of it except be named in the will and arrange funeral and house clearance.

Brock_and_Roll

Well something is very wrong here as if the above is correct then the solicitor should never have advised that the Estate be distributed given that it had a clear and ongoing liability.


Nothing however gets away from the unfortunate fact that the Executor is personally liable. From the bank's perspective, they had a claim on a solvent Estate and then assets (i.e. the cash) from the Estate were distributed to beneficiaries without their debt being settled!Furthermore, the fact that a property was purchased by the beneficiary...and then mortgaged will raise their eyebrows even more - no doubt they will think they have been diddled and this will get the rankles up in their legal department (as I can tell you first hand!)


If I were the OP I would a) sue their previous solicitor b) instruct a new, competent solicitor as the implication here are very serious.

Mojisola

ExecutorDee wrote: »

solicitor has been involved all along

I was named as executor in the will, along with solicitors.

Solicitor sorted out all assets and disbursements.

Solicitor now asking me to sign paper absolving them from liability...which seems to leave me carrying the can if the mortgage co make a claim.

Which you are not going to do, I hope!

They did the work - they are at fault although you also have liability as a co-executor.

getmore4less

I have refused to inherit the share as I want no association with their finances (or existance) and was hoping they would buy it from the estate.


Missed this bit.

will depend on the exact wording in the will but if you refused the share of the house properly( renounced the legacy ) then the legacy to you would fail and it would fall to the either someone else or the residual.

or you could have done a DOV to give it to your sis.

how many children are there as that would be the residual and if just your sister then the house should have been signed over to her.

When you say solicitors did it were you also on the grant or just the solicitors?

being named is not enough you would also need to be on the grant.

Is the property in negative equity?