Brother wants £75K from my Dad to pay off debts - Dad recently widowed and we are tenants in common

Madrick

JackSprout said:

My understanding is Dad can do what he wants with the money and yes I agree if he want to sell up and have a really loverly care home then I believe he should do that, but he does have 3 grandchildren (my brother doesnt have children) so he may decide to leave them some money. But that is totaly up to him, hes not that great at money my Mum always dealt with it so I have to try and give him the options including bailing my brother out,

So brother doesn't have any kids

What did he do to run up £75k of debts?

He has obviously never been on this site...

If he managed to run up that much debt, presumably he's not particularly good with money? 

JackSprout

xylophone said:

Subject as above the Property Trustees shall hold the capital and income of the Trust Fund for my son BOB and my son BILL which shall be held by them or the survivor of them in equal shares 

I don't quite follow.

What "Trust Fund"?

Was your mother's only asset her beneficial interest in the property or were there cash/share assets as well?

What exactly does the will say in respect of the gift of her interest in the property?

The following are the pertanent clauses under the heading: Life interest in xyz (the property)

"The Trust Fund shall mean my share of my property", there was only the property and enough to cover funeral costs, so the Trust Fund is half the property.

Then it goes on to say:

Subject as above the Property Trustees shall hold the capital and income of the Trust Fund for my son BOB and my son BILL which shall be held by them or the survivor of them in equal shares and if either of them fail to obtain a vested interest leaving issue who survive me then such issue shall take by subsitituion such failed share and if there shall be more than one of such issue they shall take in equal shares per stirpes.

xylophone

under the heading: Life interest in xyz (the property)

"The Trust Fund shall mean my share of my property", there was only the property and enough to cover funeral costs, so the Trust Fund is half the property.

Then it goes on to say:

Subject as above the Property Trustees shall hold the capital and income of the Trust Fund for my son BOB and my son BILL which shall be held by them or the survivor of them in equal shares and if either of them fail to obtain a vested interest leaving issue who survive me then such issue shall take by subsitituion such failed share and if there shall be more than one of such issue they shall take in equal shares per stirpes.

I am very puzzled by this. The heading is "life interest" but the following clause does not appear to relate to a life interest.

One would have expected that either your mother's share would have been left in life interest trust to your father with you and your brother as remaindermen or that it would have been left to you and your brother as an immediate bequest.

I would suggest that you take advice from the solicitor who drafted the will before taking any further action.

xylophone

Depending on what the solicitor advises, might it be worth considering a sale of the property now? How would your father feel about this?

After paying you and your brother the appropriate amounts, would your father have enough to buy a suitable property outright?

BillyHorner

My understanding of the legal position (and I'm not a lawyer) is as follows.

Your mum and dad were tenants-in-common, each holding a 50/50 share in both the legal and beneficial ownership of the property. When your mum passed away, as tenant-in-common, your dad would have automatically become the 100% legal owner of the property (is it his name that is on the title with the Land Registry?).

He would also continue to hold a 50% beneficial interest in the home and he, as the legal owner, would hold the other 50% in trust for you and your brother. It sounds like he also has a lifetime interest in the other 50%, meaning it would be impossible for anyone else to force a sale.

If the above is correct, it would be almost impossible to raise £75k against the value of the house, unless your dad chooses to sell it and dispose of the assets in accordance with your mum's will.

Your dad would probably be unable to access equity release, as the property is encumbered by the trust. An equity release company would need to make a legal charge against the property and they are highly unlikely to do so with a trust in place.

You would be unable to raise a mortgage against your share of the beneficial interest, as you do not have legal ownership of the property. The same would apply to your brother.

I would strongly advise that you (and your dad) get some proper legal advice before making any firm decisions.

JackSprout

BillyHorner said:

My understanding of the legal position (and I'm not a lawyer) is as follows.

Your mum and dad were tenants-in-common, each holding a 50/50 share in both the legal and beneficial ownership of the property. When your mum passed away, as tenant-in-common, your dad would have automatically become the 100% legal owner of the property (is it his name that is on the title with the Land Registry?).

He would also continue to hold a 50% beneficial interest in the home and he, as the legal owner, would hold the other 50% in trust for you and your brother. It sounds like he also has a lifetime interest in the other 50%, meaning it would be impossible for anyone else to force a sale.

If the above is correct, it would be almost impossible to raise £75k against the value of the house, unless your dad chooses to sell it and dispose of the assets in accordance with your mum's will.

Your dad would probably be unable to access equity release, as the property is encumbered by the trust. An equity release company would need to make a legal charge against the property and they are highly unlikely to do so with a trust in place.

You would be unable to raise a mortgage against your share of the beneficial interest, as you do not have legal ownership of the property. The same would apply to your brother.

I would strongly advise that you (and your dad) get some proper legal advice before making any firm decisions.

Yes I agree, I think that our hands are tied in respect to equity release, I will be progressing the probate and get my brothers name on the deeds as well as mine, at least that way he can expect a win fall one day, I did show my Dad a couple of nice properties near us, however it just reinforced the fact he likes where he is for now, he can always re visit that in the future.

xylophone

as the legal owner, would hold the other 50% in trust for you and your brother. It sounds like he also has a lifetime interest in the other 50%, meaning it would be impossible for anyone else to force a sale.

Father is certainly the legal owner of the whole of  the property and the beneficial owner of 50%.

However, the OP has not indicated that father was given a life interest in the mother's share of the property - nor has he stated that father is a Trustee of the property. It appears that he and his brother are the Trustees of the property for their own benefit (which strikes me as very odd).

It seems to me that before doing anything, he should consult the solicitor who drafted the will.

JackSprout

xylophone said:

as the legal owner, would hold the other 50% in trust for you and your brother. It sounds like he also has a lifetime interest in the other 50%, meaning it would be impossible for anyone else to force a sale.

Father is certainly the legal owner of the whole of  the property and the beneficial owner of 50%.

However, the OP has not indicated that father was given a life interest in the mother's share of the property - nor has he stated that father is a Trustee of the property. It appears that he and his brother are the Trustees of the property for their own benefit (which strikes me as very odd).

It seems to me that before doing anything, he should consult the solicitor who drafted the will.

3 of us are trustees, my Dad has a life interest as the "Life Tenant" and as a result can do what he wishes. We have no rights to the 50% left to us by Mum until Dad dies, at which point there maybe no money left is my understanding. Therefore Dad will have to agree to us changing the land registree, which was the entire purpose of the will to protect his assets being consumed by care costs.   

xylophone

3 of us are trustees, my Dad has a life interest as the "Life Tenant" and as a result can do what he wishes. 

There is another clause in the will which grants the life tenancy?

If your father is the Life Tenant of your mother's share, then he cannot "do as he likes".

He is bound by the terms of the life tenancy.

 And if  it is the case that your mother's will grants father a life tenancy, you and your brother are not tenants-in -common with your father in your own right - your father may give permission for you to be registered on the Deeds but if so your status is as Trustees of the Trust.

What does the Life Tenancy clause have to say about any sale of the property (perhaps with a view  to downsizing)?

If you are not completely sure of how to proceed, you should take the solicitor's advice.

MalMonroe

Your poor dad. 

I have been in financial trouble myself and I know how horrible that is, I was really depressed and didn't know where to turn. Your brother could easily contact one of the free debt help agencies. Of course that may mean him declaring himself bankrupt but that's a far better option than asking your dad for help. (I was helped by StepChange to get a DRO which hung around my neck for six years but now it's over and I have finally (after 50 odd years) learned how to look after my finances. It wasn't easy though.)

I will readily admit that I am no angel but I would never have asked my parents for money. They are no longer with us but I just couldn't have done it. Nor could I ever have told them I was struggling financially (prompted by the breakdown of my marriage and my being left a single parent) as didn't want them to worry. The people on this thread who are saying if your brother is helped to get out of debt he'll never learn to manage his money are right. He won't. He'll have to do it himself.

The best thing is, I agree with everyone else saying this, to contact a solicitor. If nobody in the family can afford that, then Citizens Advice may be able to help with contact details for cheaper alternatives.