Complicated Probate case... sigh

Tom99

theoretica wrote: »

It feels to me like you are muddling various things together which would be clearer separately.
1) sorting probate
2) whether you wish to own part of your mother's house and what that does to your relationships!

It seems to me your father did not own 25% of the house when he died - he owned about 21%, the bank 16% and your mother the rest. If you pay off the mortgage with your own money, it is worth thinking about getting it documented that you own that 16%. Sorting probate properly will stop his partner having any claim to the £20k you pay off his 25%.

I think this is still the current table for valuing life interest - and by extension the reversionary interest which the partner is seeking.

http://www.legislation.gov.uk/uksi/2008/3162/pdfs/uksi_20083162_en.pdf
If your mother is 54 now, she was 52 at date of death - so the value of the life interest is 42.2% of the whole, and the reversion value will have been 57.8% of the market value. 57.8% x £105k = £60,690

That's very interesting. Are you forced to use that formula though?

Even if you are I think it might be:
£125k x 57.8% = £72,250
Less the debt of £20,000 = £52,250

nom_de_plume

Going back to this paragraph in the opening post....

This partner has laid claim to the 25%, however this 25% is held in a special "trust" and is only accessible in the the triggering events that my mother (75% owned) dies, remarries or the lender forces sale of the property if mortgage is not paid. The partner has laid claim under the 1975 dependents act.

I assume there is another triggering event namely the sale of the property by OP's mother. Would the OP taking out a mortgage on the property and becoming a part owner be considered such an event?


Also, on the value of the 25%. If the father had not contributed to the mortgage interest payments, should his estate therefore not be liable for 25% of them over the last 20 years if it is to benefit from the increase in the property's value?

[Deleted User]

theoretica wrote: »

It feels to me like you are muddling various things together which would be clearer separately.

1) sorting probate
2) whether you wish to own part of your mother's house and what that does to your relationships!


It seems to me your father did not own 25% of the house when he died - he owned about 21%, the bank 16% and your mother the rest. If you pay off the mortgage with your own money, it is worth thinking about getting it documented that you own that 16%. Sorting probate properly will stop his partner having any claim to the £20k you pay off his 25%.


I think this is still the current table for valuing life interest - and by extension the reversionary interest which the partner is seeking.

http://www.legislation.gov.uk/uksi/2008/3162/pdfs/uksi_20083162_en.pdf
If your mother is 54 now, she was 52 at date of death - so the value of the life interest is 42.2% of the whole, and the reversion value will have been 57.8% of the market value. 57.8% x £105k = £60,690

Very interesting information, I had no clue what a life interest was, still learning about it.

So you are saying I quote that figure (60k) on a probate form?

Where does the justification part of it come in to play? I mean who would ask me? For me to cite the table for valuing life interest on how we reached that figure.

It's weird because technically, If I am assessing his debt and the estate, father owes Santander 80K.

Whether I own 16 % or my mom owns another 16% on top of her 75% (or 63% as you put it minus 12%) doesn't matter to us.

Seeing as realistically, only I can deal with the lender not my mother, at least to make it official rather than lender just accepting money from my mom. I would be paying the lender directly so then
how do I go about buying 16% by paying the mortgage, have no clue how that works.

I have to do probate first by listing the estate figures, THEN I pay the mortgage and clear the debt.. so those figures would change. I am looking at the probate now, need a PA1A form for when no will, and if any tax is due on it, which I don't think so as it is below the threshold. But I am liable for the accuracy of all information provided.

My tiny brain is going to explode soon

[Deleted User]

nom_de_plume wrote: »

Going back to this paragraph in the opening post....

I assume there is another triggering event namely the sale of the property by OP's mother. Would the OP taking out a mortgage on the property and becoming a part owner be considered such an event?


Also, on the value of the 25%. If the father had not contributed to the mortgage interest payments, should his estate therefore not be liable for 25% of them over the last 20 years if it is to benefit from the increase in the property's value?

My solicitor seems to think if the original mortgage or debt is removed, or replaced by a new one.... it is a triggering event.

I think there is a standard form A restriction on the property right now preventing sale by my mother, I need to do probate, inform land registry and then I think beneficial interest transfers to me, I think I can get added as a legal owner too, but my solicitor is not sure if that's needed.

All I know for sure right now, is that as far as the Lender is concerned, my father is obligated to pay the mortgage.

[Deleted User]

Tom99 wrote: »

That's very interesting. Are you forced to use that formula though?

Even if you are I think it might be:
£125k x 57.8% = £72,250
Less the debt of £20,000 = £52,250

I think if the house is sold then mortgage would be redeemed first, so -20K then the beneficial interest is realised = 105K

Otherwise if the mortgage is paid off now, then either the beneficial interest increased in equity/value or I can claim it back from the estate? Either at 4% as Theoritica suggested in terms of ownership, I claim 20K from his 125K, or I own 4% of his 25% leaving him with 21%.


Or I claim 80K from his 125K as a debt under his name? He owes the lender 80k as far as the lender is concerned, I pay it out of my pocket, and so I reclaim it back from his estate.... IF that estate was to ever go to someone else other than myself or my mother... for example.

nom_de_plume

I think you have mentioned you father's partner is claiming benefits. Depending on what these benefits are, she may lose some or all of them if she were to inherit a sizeable sum of money.



You have recognised yourself that, were this to go to Court, the final outcome is by no means predictable. My gut feeling is that an offer should be made to his partner but nowhere near the 25% she is looking for if she wants cash now. Perhaps somewhere around 12.5% but 12.5% of the reduced value of the property due to your mother's occupancy and taking into account the outstanding mortgage. Hopefully a decent RICS valuer would be able to value the property taking your mother's occupancy into account. (Look up protected tenancies which is in effect what your mother is as well as being a part owner).

Land_Registry

Adams18 wrote: »

My solicitor seems to think if the original mortgage or debt is removed, or replaced by a new one.... it is a triggering event.

I think there is a standard form A restriction on the property right now preventing sale by my mother, I need to do probate, inform land registry and then I think beneficial interest transfers to me, I think I can get added as a legal owner too, but my solicitor is not sure if that's needed.

All I know for sure right now, is that as far as the Lender is concerned, my father is obligated to pay the mortgage.

I get the feeling that you have already contacted us in some way re the situation. However I am going to reply based solely on what you have posted in this thread to date. IF the comments don't match what has previously been explained then I can only assume that there is more detail I am missing

The legal ownership has passed to your Mother following your Father's death. We register that legal ownership

The form A restriction was applied for at some point and most likely to protect the life interest/trust they created so as to restrict a surviving legal owner from taking receipt of capital monies. In general terms selling to a third party or taking out a mortgage being the most likely scenarios.

You post that the form A restriction is 'preventing sale by my mother' - that is true in one context but I get the impression that you believe the property can't be sold. Is that correct?

Probate, or letters of administration if he had no will, seem to be required in order for the lender to engage with the executor/administrator in some way.

Probate would not be needed to from a registration perspective as we register the legal ownership, not the beneficial one. Your Mother could, for example, transfer the legal ownership by way of a gift to herself and you. No capital monies are involved and the form A restriction would remain in place and still protects the life interest/trust remains.
Seems likely that the lender would though need to consent to such a Transfer and of course that involves informing them that he has died and providing evidence of your legal authority to deal with his estate.

If the above is correct then the wider issue, which others have also posted, is that the legal ownership should be dealt with separately from the life interest/trust. However you do need to consider both before doing anything to understand how each affects the other.

In general terms when a property is sold it is the proceeds of sale that then go into the beneficial ownership pot so to speak. Those with an interest in that beneficial ownership then have a claim on that pot and this is the issue, it seems, you have with regards the other party as well as your own and your Mother's beneficial interest(s).

It would be interesting to know, bearing in mind my earlier Q, what you have contacted us to ask previously and what reply you received?

Note - as we do not register the specifics re the beneficial ownerships we cannot offer any comment/advice on the % shares you refer to or their calculation/impact. That is, as mentioned, a separate matter

Tom99

Adams18 wrote: »

I think if the house is sold then mortgage would be redeemed first, so -20K then the beneficial interest is realised = 105K
Otherwise if the mortgage is paid off now, then either the beneficial interest increased in equity/value or I can claim it back from the estate? Either at 4% as Theoritica suggested in terms of ownership, I claim 20K from his 125K, or I own 4% of his 25% leaving him with 21%.
Or I claim 80K from his 125K as a debt under his name? He owes the lender 80k as far as the lender is concerned, I pay it out of my pocket, and so I reclaim it back from his estate.... IF that estate was to ever go to someone else other than myself or my mother... for example.

The 1st item on your to do list is probate. The forms are fairly straight forward but you do have to decide what values to give:

1 - The asset. Various valuation methods have been suggested above. Maybe as suggested an RICS valuation of a 25% share subject to a life interest would be possible.
2 - The debt. I 1st thought this was £80k but then after you said the 25% share was after the mortgage was paid off, £20k.

In terms of the partner claim it would obviously be better to show £80k as the debt rather then £20k. You say this was a loan in your father's name only but secured against a house your mother owns 75% of.
At the date of you father's death this £80k loan was repayable in 2yrs time by your father. Only if your father defaulted on the loan would the lender seek to repossess the house. When listing a debt for probate purposes you have to assume that any loan is to be repaid in full, you cannot assume some cheaper alternative by defaulting on the loan. Maybe therefore £80k is the correct figure to list as debt?

[Deleted User]

Land_Registry wrote: »

I get the feeling that you have already contacted us in some way re the situation. However I am going to reply based solely on what you have posted in this thread to date. IF the comments don't match what has previously been explained then I can only assume that there is more detail I am missing

The legal ownership has passed to your Mother following your Father's death. We register that legal ownership

The form A restriction was applied for at some point and most likely to protect the life interest/trust they created so as to restrict a surviving legal owner from taking receipt of capital monies. In general terms selling to a third party or taking out a mortgage being the most likely scenarios.

You post that the form A restriction is 'preventing sale by my mother' - that is true in one context but I get the impression that you believe the property can't be sold. Is that correct?

Probate, or letters of administration if he had no will, seem to be required in order for the lender to engage with the executor/administrator in some way.

Probate would not be needed to from a registration perspective as we register the legal ownership, not the beneficial one. Your Mother could, for example, transfer the legal ownership by way of a gift to herself and you. No capital monies are involved and the form A restriction would remain in place and still protects the life interest/trust remains.
Seems likely that the lender would though need to consent to such a Transfer and of course that involves informing them that he has died and providing evidence of your legal authority to deal with his estate.

If the above is correct then the wider issue, which others have also posted, is that the legal ownership should be dealt with separately from the life interest/trust. However you do need to consider both before doing anything to understand how each affects the other.

In general terms when a property is sold it is the proceeds of sale that then go into the beneficial ownership pot so to speak. Those with an interest in that beneficial ownership then have a claim on that pot and this is the issue, it seems, you have with regards the other party as well as your own and your Mother's beneficial interest(s).

It would be interesting to know, bearing in mind my earlier Q, what you have contacted us to ask previously and what reply you received?

Note - as we do not register the specifics re the beneficial ownerships we cannot offer any comment/advice on the % shares you refer to or their calculation/impact. That is, as mentioned, a separate matter

Thank you for your reply, yes my mother has contacted the Land Resgistry several times.

First she attempted to file a TR1 form in an attempt to register myself as a proprietor, as a beneficiary to the deceased proprietor. And herself as a transferee, remaining a proprietor on the property. She would also have to fill an AP1 form for personal identification purposes. For this, the Land Registry required various documentation, including death certificate and Grant of Probate/Letters of Administration.

Not sure where this ended up, my mom was confused with all the forms, I was busy at work!

Next, my mom filed a a DJP form to remove the deceased name from the register. The documentation required for this was a death certificate, and an official copy of probate or letters of administration.

Next my mom attempted to file an ST5 form and an RX3, where I believe she was trying to remove the Form A restriction on the house. At this point I believe she was truly confused on restrictions, and Land Registry in general. I am not too clear on it either, but the last response we got was that the Land Registry removed my fathers name, but were not satisfied in removing the restriction due to no letters of administration being provided. I have the response letter somewhere at home, I'll go and read it again, and see what else it says. I am just going off memory, and some emails right now.

Looking at the ST5 form for removal of Form A restrictions, it says:

Before a restriction in Form A in the proprietorship register can be cancelled, HM Land Registry must be satisfied that the restriction is no longer required. This will often be because the land is no longer subject to a trust. A trust of land exists when the formal ownership of the land (the ‘legal estate’) is separated from the underlying ownership (the ‘beneficial interest’).

The restriction will no longer be required if:
- the interest protected by the restriction has ended or passed to the registered proprietor(s) or the survivor(s) of them, and
- nobody else has a beneficial interest in the land, and
- if there are two or more registered proprietors, they now hold the land on trust for themselves (and nobody else) as beneficial joint tenants. Joint owners must hold the legal estate as joint tenants, but their beneficial interests may be held either as joint tenants or as tenants in common. Joint tenants do not have specific shares in the land. On the death of one joint tenant, their interest in the land passes automatically to the others. Tenants in common have specific shares, which can be transferred separately, and are inherited as part of their estate on their death. (See https://www.gov.uk/joint-property-ownership)

Not being able to sell the house?
I thought that the restriction prevents my mom from selling the house, we are both very confused about how we could sell the house if the 25% is held under trust, how do the net proceeds get distrubuted? I guess now you can't sell to a third-party because they will run a check and see a form A restriction on the property.

Lender/Probate
I get the impression the lender does accept money from whoever, when closing the account and clearing the mortgage. But I figured I would do it the proper way by doing probate, and showing them the letters of administration so I can deal with the account in a recorded fashion. As they accept payments from my mom who isn't listed as an account holder.
I don't know the advantages of having myself registered as a legal owner on the property, at this juncture.

In general terms when a property is sold it is the proceeds of sale that then go into the beneficial ownership pot so to speak. Those with an interest in that beneficial ownership then have a claim on that pot and this is the issue, it seems, you have with regards the other party as well as your own and your Mother's beneficial interest(s).
Yes so then, the property cannot be sold because of the Form A? Or it can be sold but the Form A restriction will protects the life interest trust from being distributed?
I am confused on this part.
As soon as the property is sold, the beneficial interest held under trust becomes part of the deceased estate anyway, pending any debts that need redeeming

[Deleted User]

Tom99 wrote: »

The 1st item on your to do list is probate. The forms are fairly straight forward but you do have to decide what values to give:

1 - The asset. Various valuation methods have been suggested above. Maybe as suggested an RICS valuation of a 25% share subject to a life interest would be possible.
2 - The debt. I 1st thought this was £80k but then after you said the 25% share was after the mortgage was paid off, £20k.

In terms of the partner claim it would obviously be better to show £80k as the debt rather then £20k. You say this was a loan in your father's name only but secured against a house your mother owns 75% of.
At the date of you father's death this £80k loan was repayable in 2yrs time by your father. Only if your father defaulted on the loan would the lender seek to repossess the house. When listing a debt for probate purposes you have to assume that any loan is to be repaid in full, you cannot assume some cheaper alternative by defaulting on the loan. Maybe therefore £80k is the correct figure to list as debt?

It's just become so convoluted with the court orders and valuing the life interest that 80K seems the most sensible to list as a debt, although it wouldn't reconcile with what we are saying to the solicitors, and what the solicitors have discussed re the calculations:

500K-80K
= 420/4
=105K

Perhaps list 80K as debt, pay it..... and then find a way to reclaim the 80K in future from the estate if needs be? I.e. if the claimant pursues the 25% claim

Or find a way to buy 16% equity in the property in the form of paying the 80K which I have no idea how that's done.

Either I pay someone a large sum to solve this probate case for me, or I do it myself and figure out what to list on that PA1A form. I would have though it was simple enough to do.