Conflict of interest beneficiary/executor?

Daisytrix

Hello,

I'd be grateful for advice on this situation please.

My husband became a beneficiary of 25% of his father's estate. He is joint executor with his brother who is receiving 75%.

The father died 26 months ago. Probate was dragged out because the brother wanted to buy out my husband's shareof the family home and avoid paying CT whilst he sorted out his finances. My husband not wanting to be grasping went along with this. Finally probate was granted in September this year and we are into more delays. The brother has said the property must be signed over to him because the bank will not issue a mortgage unless it is 100% in his name. This sounds highly suspect to me and i cautioned against it at least not without some oversight from a solicitor. Brothers don't behave that way i was told and my advice ignored. My husband has signed the documents and we are led to believe the transfer is in progress. The LR today shows the property is still held in the father's name. Other items in the estate have not been shared eg. Car etc. My husband has requested the sale of some jointly held shares. 12 months later they have not been sold (as far as we are aware).

I'm in the situation now of dealing with my mother's more complex estate with tax due and searching for a loan (80k) to pay it off. My husband had hoped that his inheritance would have funded this. Effectively we will be taking a loan now to fund the brother's interest free loan from us.

There doesn't seem to be any end in sight. The brother is behaving like a majority shareholder and looking after his own interests to the detriment of my husband. This doesn't seem right.

What would be my husband's next steps to resolve this situation? He doesn't want to cause bad blood, but this doesn't seem to be a worry to the brother tbh.

We'd really like to resolve this and move on with our lives after a period of turmoil with family illness.

Thanks in advance.

Keep_pedalling

I am afraid your BIL is treating your husband like a fool, and he is not wrong there. This should have been treated like any other house sale / purchase with your BIL obtaining a mortgage before having the property signed over to him, and it would have been wise to engage solicitors to handle the house purchase.

He really needs to start manning up and getting more control of winding up the estate. Get him to sort out a meeting with his brother to establish the progress on the mortgage, and to insist the remaining assets are sold.

Flugelhorn

House should have remained in father's name and been sold by the executors to the brother via a proper conveyancing process. Mortgage companies often lend on situations like this - sounds like brother doesn't quite know what he is doing.

Daisytrix

Thanks for your reply. Yes that's my impression! My husband is not a great communicator and has let the brother call the shots for fear of upsetting his grieving brother who couldn't bear to part with family home. I now find myself having to sell my family home after just 6 months and am wondering why a grown man can't do the same. My husband has been told the mortgage is approved in principle although he has not seen any documentation.

I personally think firing off a solicitors letter at this point wouldn't be a bad thing? In general the brother takes weeks/in some cases months to reply to my husbands messages. I've taken screenshots of comms because at this point my husband has potentially handed over a 70k "gift" with no recourse.

With the property transfer not yet done, would a call to the LR be able to put the transfer on hold?

Brynsam

Daisytrix wrote: »

I personally think firing off a solicitors letter at this point wouldn't be a bad thing? In general the brother takes weeks/in some cases months to reply to my husbands messages. I've taken screenshots of comms because at this point my husband has potentially handed over a 70k "gift" with no recourse.

Firing off a solicitor's letter is a pretty daft idea unless the solicitor is properly instructed and knows exactly what your husband is trying to achieve.

The position may be even more complicated than you realise if your husband has effectively handed over his potential ownership of the property without a deed of variation. He could have put himself in line for a bill for CGT, depending on the timing of events and the exact way they've been done.

Starting point is to have a discussion with your husband and agree what needs to be done and the relevant timescale. His brother has no interest in changing his own behaviour, since he's been allowed to do exactly as he pleases since the death of his father. it is for your husband to get a grip of the situation and get the necessary processes in place - and that's where a solicitor's letter could indeed do the trick.

Gavin83

Daisytrix wrote: »

I'm in the situation now of dealing with my mother's more complex estate with tax due and searching for a loan (80k) to pay it off. My husband had hoped that his inheritance would have funded this. Effectively we will be taking a loan now to fund the brother's interest free loan from us.

Just to ask about this why are you taking out a loan in your name to settle your late mums debts? Why can't this come out of the estate?

getmore4less

Gavin83 wrote: »

Just to ask about this why are you taking out a loan in your name to settle your late mums debts? Why can't this come out of the estate?

The clue is Tax due, probably IHT.

Daisytrix

Not debts. The estate was debt free. Relatively small quantity of cash but several properties to sell so IHT to pay before we can access the proceeds.

Daisytrix

Thanks, i agree entirely. Problem i have is it's not entirely "my" business as it's not my inheritance so i've tried to take a step back but i can see my husband is putting his (and therefore our) finances in jeopardy and with this signing over the house idea i feel compelled to intervene. I will try to get a solicitor appointment arranged and see what they advise. I'm really pleased that i'm not the only person paranoid enough to see there is potential if not actual problems here. Thanks again.

Daisytrix

I meant to ask, do you think you could clarify your comment on the CGT aspect please? How would this potentially apply in these circumstances?

Well following a firm but polite and respectful message a reply was received which was pretty nasty. The brother saying he would be presenting my husband with a bill for last two years running costs for the property even though the house has only been kept because the brother wanted to buy my husband out. I despair i really do.

Dox

OP - there is nothing paranoid about recognising that your husband's behaviour resembles that of an ostrich putting its head in the sand. Equally, no good getting riled with your brother in law when your husband has so singularly failed in his role as executor, thus letting your BIL do exactly as he pleases, which is what seems to have happened. His reply isn't 'nasty' - it is simply a statement of fact and quite a reasonable one, given the way things have been allowed to drag on. Your husband is the one who has let them do so.

Many people aren't good at handling conflict, especially within the family, and it looks as if your husband is more worried about the fallout with his brother than the little matter of protecting his wife. It happens, and how you deal with it is going to have a major impact on your marriage going forward, never mind your finances.

I think the CGT issue referred to above is where someone 'disposes' of a house (or their share of a property) for less than market value to a 'connected person' such as a close family member, and the property in question is not their principal residence. HMRC then treats the transaction as if the deal had been done at arm's length and CGT may be payable on the full market value disposed of, however little cash is actually paid/received.

An appointment with a solicitor to establish the facts seems your best starting point. Hopefully your husband will see the logic of that, but if necessary you may need to show up on your own.