Complicated Probate case... sigh

Tom99

Adams18 wrote: »

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.

PA1A and also IHT205 I think.
All the forms and notes are here:
https://www.gov.uk/government/collections/inheritance-tax-forms

[Deleted User]

nom_de_plume wrote: »

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).

Thank you for your insights, good points, and I certainly have considered paying a sum to her, but my gut feeling is she would refuse and pursue the entire 25% to see where she ends up.

It seems RICS does a lot more than just your typical evaluations, I'll definitely pursue their service as they might be able to give me a solid opinion on the value of the 25%, and perhaps confirm what others have already stated here.

I don't know what her plans are, maybe she is banking on taking a large sum of money and going abroad.

Land_Registry

Adams18 wrote: »

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

Many thanks

TR1 to the two if you could have been ok and we shouldn't have needed probate as death cert alone would have sufficed. ID evidence for both of you also. We could have updated the register to new joint names, removed Dad's name BUT left the form A restriction in place.

DJP is simply an application to update the register re death of a joint proprietor. Again fine and only death certificate needed. Register updated to sole name. Form A restriction remains.

RX3 and ST5 are correct to cancel Form A restriction but you've already posted that the life interest/trust is still in play so not a valid application. Appreciate it can be confusing and whilst we may have explained that it was an option in a certain set of circumstances e.g he'd left his share to your Mother that clearly wasn't the case

Not being able to sell - this is the key Q now as whilst she can't sell on her own she can if she appoints someone else to act with her. The purpose of that is so together they take receipt of the capital monies and then deal with the beneficial ownerships, interests etc
So whilst the buyer will query the form A restriction, provided she is not acting alone then there should be no issue.

Lender/probate - the lender should be able to advise you on whether they need probate/letters of admin to deal with your handling if the mortgage/payments.

Proceeds of sale these are what are then distributed as part of the estate. But that's has to be considered alongside any other interests inc your Mither's and your own.

So on the face of it your Mother could appoint you to act with her on the Sale (Transfer) to a third party as part of the TR1. And together you could sell.
Or she can Transfer to herself and You. And together you then sell.

The % shares are in the beneficial ownership and that means the vale of the property less any mortgage for example. You can't split land and bricks/mortar into a 75/25 split. But you can with £ and pence and I find that's the easiest way to explain it.

You don't need probate/letters of admin to Transfer the ownership. And the form A restriction need not prevent a sale provided it's not by Mother on her own.

Once you have the £ and pence in the beneficial ownership pot you can then deal with the remaining interests as legally appropriate. But it's not a registration issue from there on. And the key Qs seems to be what did the court order impose on divorce? If you repay the mortgage and sell have you triggered anything the court ordered against perhaps? And does his partner have a claim under the legislation you mentioned?

Dandylion

Are you 100% certain that your father’s interest in the property still exists now he has died? If none of the triggering events happened in his lifetime, then perhaps the interest died with him?

Could you let us have the wording of the restriction placed as part of the divorce? Apologies if I missed it on this thread.

[Deleted User]

Land_Registry wrote: »

Many thanks

TR1 to the two if you could have been ok and we shouldn't have needed probate as death cert alone would have sufficed. ID evidence for both of you also. We could have updated the register to new joint names, removed Dad's name BUT left the form A restriction in place.

DJP is simply an application to update the register re death of a joint proprietor. Again fine and only death certificate needed. Register updated to sole name. Form A restriction remains.

RX3 and ST5 are correct to cancel Form A restriction but you've already posted that the life interest/trust is still in play so not a valid application. Appreciate it can be confusing and whilst we may have explained that it was an option in a certain set of circumstances e.g he'd left his share to your Mother that clearly wasn't the case

Not being able to sell - this is the key Q now as whilst she can't sell on her own she can if she appoints someone else to act with her. The purpose of that is so together they take receipt of the capital monies and then deal with the beneficial ownerships, interests etc
So whilst the buyer will query the form A restriction, provided she is not acting alone then there should be no issue.

Lender/probate - the lender should be able to advise you on whether they need probate/letters of admin to deal with your handling if the mortgage/payments.

Proceeds of sale these are what are then distributed as part of the estate. But that's has to be considered alongside any other interests inc your Mither's and your own.

So on the face of it your Mother could appoint you to act with her on the Sale (Transfer) to a third party as part of the TR1. And together you could sell.
Or she can Transfer to herself and You. And together you then sell.

The % shares are in the beneficial ownership and that means the vale of the property less any mortgage for example. You can't split land and bricks/mortar into a 75/25 split. But you can with £ and pence and I find that's the easiest way to explain it.

You don't need probate/letters of admin to Transfer the ownership. And the form A restriction need not prevent a sale provided it's not by Mother on her own.

Once you have the £ and pence in the beneficial ownership pot you can then deal with the remaining interests as legally appropriate. But it's not a registration issue from there on. And the key Qs seems to be what did the court order impose on divorce? If you repay the mortgage and sell have you triggered anything the court ordered against perhaps? And does his partner have a claim under the legislation you mentioned?

Many thanks for your response, you have made the part about selling and the Form A restriction much clearer.

I'll discuss TR1 application and legal ownership with my mom, if it's ever needed.

The % shares are in the beneficial ownership and that means the vale of the property less any mortgage for example. You can't split land and bricks/mortar into a 75/25 split. But you can with £ and pence and I find that's the easiest way to explain it.

Right, so let's say we sell theoretically, and there are net proceeds minus any debt. You now have a beneficial pot for the 25 and one for the 75 share. Are we entrusted with this beneficial pot of the 25 share, unless someone else makes a claim for it besides myself?

Any other claimant could apply for a court order preventing distribution of sale? But if me and my mother sold, it's down to us to ensure that the correct person claims the £ and pence resulting for the 25% share of the net proceeds.

This is what I wondered about, while there is a potential contentious probate going on, and a sale occurred, and then you have net proceeds which should be split 25/75.... who is this money entrusted too? To act in the right way? My mother naturally has a right to the 75... but the 25 we just hold on to it? Until it is clear who it belongs to?


And the key Qs seems to be what did the court order impose on divorce? If you repay the mortgage and sell have you triggered anything the court ordered against perhaps? And does his partner have a claim under the legislation you mentioned?

Following divorce proceedings, the court ordered for the property to go into joint legal ownership between my mom and dad, with beneficial interest at 75 and 25 per cent respectively. Now his name has been struck of as a legal owner from the register.

Upon the death or remarriage of my mother, OR on the sale of the property, the 25% beneficial interest ascribed to my father must be given to him, and it would then form part of his estate after any mortgage has been redeemed. These are the known triggers.

It is still unclear whether paying off the mortgage or remortgaging would also trigger the chargeback of the 25% held on trust to my fathers (deceased) estate.

[Deleted User]

Dandylion wrote: »

Are you 100% certain that your father’s interest in the property still exists now he has died? If none of the triggering events happened in his lifetime, then perhaps the interest died with him?

Could you let us have the wording of the restriction placed as part of the divorce? Apologies if I missed it on this thread.

I'll have to dig up the wording again, but I understand it to be protecting the interests of my mother.

So if I were to inherit the interest from my father, I myself would be in no better position than he was while he was alive. Even as a legal owner of the property surprisingly, which he was, he could not force my mother to sell.

[Deleted User]

If I have ability to sell in future, then it wouldn't be a bad investment, if I paid 80K into the property, I could recoup that and worst case scenario is I end up owing claimant 125K, so I lose 20K on the 80K, but me and my mother recoup the 60K on the 75 share.

Assuming house prices dont go down....

long elipses....

MovingForwards

But, take in account your dad died intestate and therefore you and your sister are the people entitled to his whole estate; subject to the claim by the partner.

Therefore the 'trigger event' is going to pass to you and your sister.

A Deed of Variation to alter the intestacy rules and remove your sister from the estate means it all goes to you, subject to the claim by the partner.

I still think you should get a RICS value from the date of death, it may be the house wasn't worth as much as it was 6 months later, and reduces the amount the partner can try and claim.

I would suggest getting a word document together, or some A4 paper and write down all the steps, in order, that you need to take, you will find it so much easier.

Tom99

Land_Registry wrote: »

TR1 to the two if you could have been OK and we shouldn't have needed probate as death cert alone would have sufficed. ID evidence for both of you also. We could have updated the register to new joint names, removed Dad's name BUT left the form A restriction in place.

Would that not have required permission from the mortgagee to add a new joint legal owner?

Land_Registry

Tom99 wrote: »

Would that not have required permission from the mortgagee to add a new joint legal owner?

From a registration perspective IF the lender had a restriction on the title preventing a disposition or Transfer by the registered owner without their consent, then Yes

So what is the issue with the lender as you see it? Have you checked anything with them around the impact of his death on the secured loan?
When was it mortgaged? Before the Divorce? The Transfer? Or after?
You referred to them just wanting their money but if it's a secured loan don't they get more money by leaving it in place?
And why do you think they'd start priceedings to try and force a repossession/sale by them if the payments are still happening?
Lots of Qs to be answered still it seems

As for your earlier reply how the beneficial pot(s) and estate are dealt with are not areas we deal with directly so that's for others to comment on