Spouse debt after death

Keep_pedalling

Spendless said:

Keep_pedalling said:

My biggest concern here would be that the OP’s father, as a last act of spite, unilaterally splits the tenancy and makes a will leaving his wife nothing. 

Wouldn't he need Mum's signature to do so?  

No, either party can sever the tenancy at any time. They have to serve notice on the other tenants but they can’t be stopped from doing it.

https://www.gov.uk/joint-property-ownership/change-from-joint-tenants-to-tenants-in-common

Spendless

elsien said:

No, severing a joint tenancy can be done by either party without the consent of the other. 

Eeek well I never knew that. That leaves the other party vulnerable. Do they get notified of the change? 

elsien

Yes, there is a form to fill in. They don't have to agree but they have to be informed. 

Keep_pedalling

Spendless said:

elsien said:

No, severing a joint tenancy can be done by either party without the consent of the other. 

Eeek well I never knew that. That leaves the other party vulnerable. Do they get notified of the change? 

If it wasn’t the case that a single party could sever the tenancy their would be major problems for anyone separating from a uncooperative partner, had a joint owner who no longer had mental capacity or simply wanted to leave their share to someone other than the joint owner. 

msb1234

The wife could always do this - change it to TIC with her owning 90% and her husband 10%. So when he dies, only 10% of the house could be counted as his estate. However, 10% of a house where there is someone else living there and isnt in a position to see is actually worth nothing.

Keep_pedalling

msb1234 said:

The wife could always do this - change it to TIC with her owning 90% and her husband 10%. So when he dies, only 10% of the house could be counted as his estate. However, 10% of a house where there is someone else living there and isnt in a position to see is actually worth nothing.

Just how do you think she could claim 90%? Severing the tenancy will result in a 50/50 split unless both parties agree to a different percentage. 

Spendless

Keep_pedalling said:

Spendless said:

elsien said:

No, severing a joint tenancy can be done by either party without the consent of the other. 

Eeek well I never knew that. That leaves the other party vulnerable. Do they get notified of the change? 

If it wasn’t the case that a single party could sever the tenancy their would be major problems for anyone separating from a uncooperative partner, had a joint owner who no longer had mental capacity or simply wanted to leave their share to someone other than the joint owner. 

Well I sort of assumed in those cases that it would have to go through the courts. I'd read enough my ex is still on the house  how can I get rid to sort of think that and enough make sure you have LPA before you actually need it so it doesn't cause issues. 

sheramber

Spendless said:

I'm not sure I understand that. One part says it's not taken into account the other says if it's insolvent then creditors have up to 5 years to make a claim.

Joint tenant

Each owner owns all of the property. When one owner dies, their share does automatically pass to the other owner. It does not form part of the estate available to creditors. Therefore, the property is not taken into account when working out whether the estate is insolvent.

If you are unsure how the property is owned then you should contact land registry to find property ownership information, there is a cost of £3.

Property in insolvent estates

If the estate is insolvent and the property was owned as joint tenants, the creditor could apply to court to recover the deceased person's share of the property. This is called an insolvency administration order, the creditor has five years to apply from the date of death.

Creditors do not apply for insolvency administration orders very often. However, if a creditor threatens to do this, any surviving owner may need to try to negotiate with the creditor to prevent them making this application. The surviving owner could offer to pay a debt by instalments or offer a lump sum. If you need to negotiate, contact us for advice.

It is two separate transaction.

1 is to establish if the estate is insolvent. 

2. is the ability to claim from a joint asset passed to the other party.

Malthusian

Spendless said:

I'm not sure I understand that. One part says it's not taken into account the other says if it's insolvent then creditors have up to 5 years to make a claim.

One part says that if your only asset is a house owned in joint tenancy, the estate is insolvent.
The second part says that if your only asset is a house owned in joint tenancy, creditors can still claim on its value - it doesn't matter that the estate is insolvent. (Just to reinforce what sheramber said.)
Because creditors can still claim on the deceased's share of jointly-held property if the estate is insolvent, severing the tenancy in theory doesn't change the position much - creditors could claim on the husband's share either way.
Practically speaking however it does make her more vulnerable, as if it's TIC the wife legally has to pay off the creditors in order to transfer the husband's share into her name. If it's joint tenancy, the onus is then on the creditors to go to court. (But they could simply threaten the wife with going to court in order to force them into opening negotiations.)

msb1234

Keep_pedalling said:

msb1234 said:

The wife could always do this - change it to TIC with her owning 90% and her husband 10%. So when he dies, only 10% of the house could be counted as his estate. However, 10% of a house where there is someone else living there and isnt in a position to see is actually worth nothing.

Just how do you think she could claim 90%? Severing the tenancy will result in a 50/50 split unless both parties agree to a different percentage. 

My mother changed her property to TIC with an 80/20 split. Her husband didnt agree to anything. She just completed the form via the conveyancing solicitor.