Joint Tenants v Common Tenants

AdrianC

getmore4less said:

AdrianC said:

Sine_Nomine said:

Based on your, and other's, answers, it seems worthwhile doing a trace, but only to find out if the former partner is still alive.  If she is, then I am sensing the prudent move may be to just walk away from the house.

If she is, then she now owns the entire property. Wouldn't the decent thing to be to tell her?

the next question will be whether one can take on the administration of the estate, clear the house of personal possessions, and just walk away from the house?

No, it's all-or-nothing.

If you do not want to administer the estate, taking anything from it would be stealing from the beneficiaries.

There is a small mortgage in place which appears to be related to Council enforcement of repairs to the property

I think you mean a charge, rather than a mortgage. So, yes, that needs to be cleared from the estate's assets. That's why you cannot just help yourself to some of those assets without worrying about the debts.

The charge is for the estate to settle. The house's value is not part of the estate.

relocating items for safe keeping is allowed, is not intermeddling or stealing.

For safekeeping for the later administration of the estate, absolutely.

But that was in reply to...

the next question will be whether one can take on the administration of the estate, clear the house of personal possessions, and just walk away from the house?

It's hard not to take the cynical view of that as "can I be involved with the estate for just long enough to take the nice things (whether of actual monetary or merely sentimental value) but without worrying about any of the hard bits or debts"...

getmore4less

Sine_Nomine said:

getmore4less said:

Do not take on administrating unless you plan to follow it through.
Don't intermeddle in the estate

You can move contents for safe keeping and secure the property without intermeddling

If you can trace the other owner and find they have passed then if you collect the documentation to satisfy the land registry they died first then best to hand over to the beneficiary.to do the admin.

I understand about intermeddling.  Ignoring the house, there is probably a small positive value to the estate, so it may be worth administering as it'll yield enough to at least fund the funeral.  The question is whether an administrator can take on the task without having to resolve the house ownership issue.  Would there ever be a case where some costs relating to disposal of the house bounce back as a liability to the estate?

There is a small mortgage in place which appears to be related to Council enforcement of repairs to the property - so I presume it would become that lender's problem to sell it and disburse excess funds to the former partner.   

That would need investigating, for it to be a mortgage it would need to be the original one or agreed by both owners
if just a charge that may complicate as it could be a debt against the estate.

Sine_Nomine

the next question will be whether one can take on the administration of the estate, clear the house of personal possessions, and just walk away from the house?

It's hard not to take the cynical view of that as "can I be involved with the estate for just long enough to take the nice things (whether of actual monetary or merely sentimental value) but without worrying about any of the hard bits or debts"...

I can see why a cynic might view the question that way.  What I was trying to ask is whether the house, if it is now wholly owned by the surviving owner, can be detached from the estate.  If there is sufficient money in the estate to pay the funeral costs, that might justify the effort of administering the estate.  As regards walking away from any debts, I believe the only one in question is the charge registered a few years ago - which would be for enforced repairs to the house - it was my assumption that a charge of that nature would simply come from the proceeds of the sale - I assume it would be a debt against the 'current' owners of the house.  I appear to be wrong in that assumption.

As regards your earlier comment about 'doing the decent thing' and telling the owner about their windfall.  Doing decent things was most certainly not in that person's nature, and I have no intention of extending that courtesy to them after what they did 40 years ago.     

Sine_Nomine

getmore4less said:

Sine_Nomine said:

getmore4less said:

Do not take on administrating unless you plan to follow it through.
Don't intermeddle in the estate

You can move contents for safe keeping and secure the property without intermeddling

If you can trace the other owner and find they have passed then if you collect the documentation to satisfy the land registry they died first then best to hand over to the beneficiary.to do the admin.

I understand about intermeddling.  Ignoring the house, there is probably a small positive value to the estate, so it may be worth administering as it'll yield enough to at least fund the funeral.  The question is whether an administrator can take on the task without having to resolve the house ownership issue.  Would there ever be a case where some costs relating to disposal of the house bounce back as a liability to the estate?

There is a small mortgage in place which appears to be related to Council enforcement of repairs to the property - so I presume it would become that lender's problem to sell it and disburse excess funds to the former partner.   

That would need investigating, for it to be a mortgage it would need to be the original one or agreed by both owners
if just a charge that may complicate as it could be a debt against the estate.

That puts a very different complexion on the whole matter.  If the charge is a debt against the estate then, even if relatively small, it would probably make the estate insolvent, and my sense is it would be better to not apply for letters of administration and to walk away from the whole mess.

I guess the key at this stage is to see if the ex-partner is still alive, and if she is, to make sure that anything we do stops short of intermeddling.

AdrianC

Sine_Nomine said:
What I was trying to ask is whether the house, if it is now wholly owned by the surviving owner, can be detached from the estate. 

The house itself would be, yes.

But the stuff inside it is part of the estate...

Sine_Nomine

It’s nearly 12 months since I started this thread to explore the situation we have with a deceased relatives house. I have come back to provide an update, and to now seek some more advice.

We set about tracing the former partner and eventually found them. We informed them, honestly and bluntly, that they now owned the house outright. We did say that we felt morally that the deceased’s estate should be entitled to some of the value of the property, and might seek legal advice about this if we couldn’t come to a mutual agreement. To cut a long story short, they didn’t see this coming, had totally forgotten about what happened 40 years ago, and readily agreed to sign over the house to the deceased’s estate for a payment of £80k cash, which we estimated was approx 25% of the property value. We insisted the former partner took advice from their own solicitor, and the house has been transferred to “X and Y as Administrators of the Estate of the late Z”. So that bit’s resolved, other than that X and Y are both owed £40k each.

The property has now been put on the market, with an expected selling point of approx £320k.

Now for the bit we’re unsure of: Our assumption was that the property would/could become part of the estate. Once sold, and the £80k loan made by X & Y repaid, the estate would be valued at around £240k, and that would go to X and Y as sole beneficiaries of Z’s estate.

I'm now worried that as Z had already died when that transfer took place, the transfer is just from the joint (who had become sole) tenant to X & Y, and that the property is now outside of Z’s estate and simply the property of X & Y who simply bought it for £80k. This poses the question that when we sell the property, do we have a £240k Capital Gains liability? Another interpretation is that the estate ‘bought’ the property for £80k, but once again, as it didn’t technically own an interest in the property at that point, is the estate liable for the £240k Capital Gain?

We probably need to seek some advice from an accountant that specialises in estates and CGT, but initially interested in any helpful thoughts from the wise on this forum.