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

JackSprout

MalMonroe said:

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. 

Thank you for your comments you are obviously a very clever person to have worked your finacial issues through, in reality this has been a wake up call for my brother and he appears to be taking responsibility, I do agree with you and I think if he is bailed out at this point he may come back in 10 years time for another hand out, my worry then would be is that he will be very much older and may not have the ability to sort him self out, and at that point there maybe absolutly no way we could.

JackSprout

xylophone said:

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.

It states The Property Trusties may -- in which the Life Tenant has for the time being an interest in possession :

"lend money of assets compromised in the Trust Fund to the Life Tennant on such terms (whether including provision for the payment of interest) as the property Trustees this fit"

"pay out of any proceeds of sale of this property or any subsituted property to purchase a freehold or leashold property which will be held for the benefit of the Life Tenant on the same trust to which this clause refers."

Land_Registry

JackSprout said:

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.

If the property was in their joint names you don’t need probate. I assume you are applying for probate for some other reason though as you referenced Dad being the one to transfer ownership if he wanted to? 

If you decide all three of you are to be registered as joint owners then Dad would transfer to himself plus the two of you. 

However there are always other options to consider including doing nothing other than updating the register re the sad death. 

The form A restriction protects the trust/arrangement and your beneficial shares and that appears to have been the plan all along as Dad retained a life interest. 

Transferring it may not change that position and may have other benefits but it may be unnecessary and/or not such a good idea depending on each personal circumstances, other property ownership and assets. 

As others have mentioned the wills/trust may not have had the impact on possible care fees as thought so a legal and financial understanding of the available options to all and which is best is highly recommended 

squirrelpie

"If the property was in their joint names you don’t need probate."

JackSprout stated that the property was held as tenants in common, not joint tenants.

JackSprout

squirrelpie said:

"If the property was in their joint names you don’t need probate."

JackSprout stated that the property was held as tenants in common, not joint tenants.

Thats correct Mum and Dad were tennants in common.

BillyHorner

squirrelpie said:

"If the property was in their joint names you don’t need probate."

JackSprout stated that the property was held as tenants in common, not joint tenants.

Land_Registry said in their joint names, not held as joint tenants. Regardless of whether a property is held as joint tenants or tenants in common, when 2 people own a property and 1 of them dies, the survivor automatically becomes the sole legal owner of the property.

Wills/trusts relate to the beneficial ownership of a property, not the legal ownership. The title held by the Land Registry only records the legal owner(s).

JackSprout

The house owned by my parents as tenants in common (I guess that’s important?).

Based on what others have said it doesn’t look like there is a compelling reason for Dad to allow us (based on my advice) to update the Land Registry, other than the fact that Mum has died.

And that there is a dis benefit potentially from putting our names on the Land Registry espesially as I owm a house as does my brother with a mortgage, and as others have said its not like we can borrow against our share even if we wanted to?

I thought the benefit of my parents to create such a will with Trusts, Life Tenants etc (reason) was to protect Mums share of the house which she placed in a Trust Fund for my brother and I. And that is doing so that part of the house would not be used to fund health care costs, forced on Dad.

My understanding was that was the point of the Will was to allow him to keep living in the house or selling  up until his death, at which point my brother and I receive the property share contained within the Trust Fund, assuming there is anything to be left.

If this is not the case then what was the point of the Will, else why bother?

Is a form A part of the probate process or is that something else?

Land_Registry

JackSprout said:

Is a form A part of the probate process or is that something else?

The restriction on the register is known as a form A restriction. It restricts a sole surviving owner as the wording states and indicates to others that some form of trust/tenants in common exists

People regularly get confused between the legal and beneficial ownerships and the importance of joint tenants/tenants in common. 

BillyHorner has explained it. And for emphasis as the legal ownership has passed to Dad the property does not form part of Mum’s estate so probate is not required to deal with the property. 

BillyHorner

JackSprout said:

I thought the benefit of my parents to create such a will with Trusts, Life Tenants etc (reason) was to protect Mums share of the house which she placed in a Trust Fund for my brother and I. And that is doing so that part of the house would not be used to fund health care costs, forced on Dad.

My understanding was that was the point of the Will was to allow him to keep living in the house or selling  up until his death, at which point my brother and I receive the property share contained within the Trust Fund, assuming there is anything to be left.

If this is not the case then what was the point of the Will, else why bother?

Again, I'm not a lawyer, but my understanding is that your Mum's will/trust has ensured that the beneficial ownership of her share of the house has indeed passed to you and your brother, but that it is restricted by your Dad's lifetime interest until his eventual passing. At the same point in time, if your Dad's will is a mirror, you with both inherit his 50% beneficial interest and his 100% legal ownership of the house (you will require probate for that).

The beneficial ownership is the one which holds the 'value' of the house, not the legal ownership. As your Mum has bequeathed this to you/your brother (with a lifetime interest to your Dad), that 50% share of the value of the house should not be counted within your Dad's assets should he require care.

That is the point of tenants in common and wills/trusts. It's just important to understand the distinction between beneficial and legal ownership.