Estate questions for unmarried couple with no will & children under 18

I'm trying to complete a PA1A form to apply for letters of administration and have some questions.

My long term partner has passed away and we have 2 young children. We weren't married & never completed a will. The family home is in my sole name but we own a plot of land as tenants in common. The land has started to be developed into what was going to be the new jointly owned family home. The land was purchased from myself remortgaging the family home in my sole name, once the self build was completed, I'd sell our current home and use the remaining equity to reduce the new build mortgage. I'm applying for LOA because I'm the only family member, her elderly mother now has dementia.

So my questions are.

1.The tenants in common land we own, our children will receive the 50% share their mother owned. Do they own it now, or do I need to do something to legally make this theirs. I'm assuming it currently forms part of the estate?

2. Once letters of administration are obtained, is the value of the estate public knowledge or shared to creditors? I'd like to know because for any debts I'd like to try to agree reduced amounts to settle them, this would likely be a no answer if they knew there was value in the estate.

3. If the total value of all of the estate is below £325k inheritance tax threshold, is it only the PA1A form to be completed or is IHT 421 also required? What other documents need to accompany the PA1A form, I read on one site there should be two copies and passport photos of applicants etc.

4. Trusts & accounts - For any money left in the estate, life insurance due to the children as beneficiaries or if I was to sell the land and retrieve my partners 50% share in money, this will then become the children's share which I have to manage for them with another adult until the children reach adulthood. 
Does the money value have to go into a trust or can it be put in to a high interest savings account currently paying 5%.

Whats the pro's and cons to a trust vs regular account if i was to die before they reach 18 or tax implications?

5. Am legally able to use some of the estate money to continue to develop the family self build once L.O.A are obtained, or to pay off the current family home mortgage if its in the best best interests of being able to care for the children on a single wage and as long as either properties share has them named on it?

Comments

  • Linton
    Linton Posts: 17,015
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    I think you will need a solicitor to help sort things out. 

    I am not a lawyer so don’t want to say too much.  But will comment on two of your questions: As I understand it under age child children cannot own property in the UK and so there will need to be a trust to hold the 50% property on your children’s behalf.

     More importantly on Q2 the estate must be distributed n the following order:
    1 funeral and administrator expenses
    2 debts paid in full 
    3 what is left goes to the beneficiaries.

    You as administrator have no choice. Your pretending that the estate is insolvent when it is not can be seen as fraud and the consequences could be very serious. So I suggest you keep well clear of any such ideas.


  • Marcon
    Marcon Posts: 9,918
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    I'm trying to complete a PA1A form to apply for letters of administration and have some questions.

    My long term partner has passed away and we have 2 young children. We weren't married & never completed a will. The family home is in my sole name but we own a plot of land as tenants in common. The land has started to be developed into what was going to be the new jointly owned family home. The land was purchased from myself remortgaging the family home in my sole name, once the self build was completed, I'd sell our current home and use the remaining equity to reduce the new build mortgage. I'm applying for LOA because I'm the only family member, her elderly mother now has dementia.

    So my questions are.

    1.The tenants in common land we own, our children will receive the 50% share their mother owned. Do they own it now, or do I need to do something to legally make this theirs. I'm assuming it currently forms part of the estate?

    2. Once letters of administration are obtained, is the value of the estate public knowledge or shared to creditors? I'd like to know because for any debts I'd like to try to agree reduced amounts to settle them, this would likely be a no answer if they knew there was value in the estate.

    3. If the total value of all of the estate is below £325k inheritance tax threshold, is it only the PA1A form to be completed or is IHT 421 also required? What other documents need to accompany the PA1A form, I read on one site there should be two copies and passport photos of applicants etc.

    4. Trusts & accounts - For any money left in the estate, life insurance due to the children as beneficiaries or if I was to sell the land and retrieve my partners 50% share in money, this will then become the children's share which I have to manage for them with another adult until the children reach adulthood. 
    Does the money value have to go into a trust or can it be put in to a high interest savings account currently paying 5%.

    Whats the pro's and cons to a trust vs regular account if i was to die before they reach 18 or tax implications?

    5. Am legally able to use some of the estate money to continue to develop the family self build once L.O.A are obtained, or to pay off the current family home mortgage if its in the best best interests of being able to care for the children on a single wage and as long as either properties share has them named on it?
    You certainly do need professional help - not least because an unmarried partner cannot normally apply for letters of administration in their own right: https://www.gov.uk/applying-for-probate/if-theres-not-a-will
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • Keep_pedalling
    Keep_pedalling Posts: 16,127
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    Minors cannot own land, therefore their share needs to be held in trust. It may make life far easier if either the land is sold and their inheritance converted to cash, or with the sale of your existing home for you to buy out their their share.

    if her estate exceeds £325k then you also have the issue of covering IHT.
  • badmemory
    badmemory Posts: 7,490
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    Selling the existing home does not sound like too good an idea as that would leave all 3 homeless.  Pity there wasn't a will as it seems it will devalue what they would have inherited.
  • Keep_pedalling
    Keep_pedalling Posts: 16,127
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    edited 6 October 2023 at 8:29PM
    badmemory said:
    Selling the existing home does not sound like too good an idea as that would leave all 3 homeless.  Pity there wasn't a will as it seems it will devalue what they would have inherited.
    I did not make myself very clear there I should have said sell once the new property is ready ( if that is still possible)
  • badmemory said:
    Selling the existing home does not sound like too good an idea as that would leave all 3 homeless.  Pity there wasn't a will as it seems it will devalue what they would have inherited.
    I did not make myself very clear there I should have said sell once the new property is ready ( if that is still possible)
    Thank you everyone for your replies. All comments taken on board and some heavy reading has took place since I originally posted.

    The reason I'm in this mess is down to us not obtaining a will in time and understanding the consequences, also moving from a long term joint life policy to separate policies when the land was bought and not having the new policy set up in trust, which would have been a simple form to return.

    1. I have to complete a PA1A form so require a second applicant. This was going to be a family member who would be our children's guardian if something happens to myself. They have concerns over their responsibilities being the second applicant in thinking they are solely responsible for all of the trust for the children. I thought they are equally responsible along with myself as the first applicant? Without a second adult, I'm unable to apply, so nothing will happen.

    2. I will require some legal advice regarding the development or sale of the partially developed land. I've currently used around £40k of money from my own sole bank account to develop the land, so with proof, I'm unsure if this value can be separated from the total sale of the land and then the remaining value is split 50/50, or I have to just half the total sale value and lose out on what I've invested. This wasn't an issue when my partner was alive because we just classed everything as each others, but if I have to sell it, I need the maximum back from the sale that I legally own to pay off my current family home mortgage that I remortgaged in my name to purchase the land.
    If I sold our current family home owned by myself, which I wouldn't do until the build was completed, I'd have a third of the value in equity remaining.  
    • The only way I can complete the build for us to all live in, would be to go 50/50 on the build costs and both own equal shares in the family home with solicitor guidance on keeping it as tenants in common, or swapping to joint tenants. Everything I own will be written into a will for them to receive upon death. I understand as adults they could force me to sell up to free their share of the property. My children would also need a will at 18 to state that the sale of the home could not be forced by their surviving partners until I passed away or sold the property. This is common with couples.

      The new build would be a far superior house to the existing family home which is now old and will need money spent on it in the near future, so could potentially be considered an investment for the beneficiaries, but who decides this? The beneficiaries would still have a substantial amount of savings in trust, plus what I already save for them each month. 
    The two questions I need legal advice on are.
    1. Is it legal to use a proportion of the beneficiaries money to invest in the family build?
    2. Does a trust require 2 adult signatures at all times to withdraw any money for the children?

  • Linton
    Linton Posts: 17,015
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    These sorts of legal questions require paid-for legal advice. Not quick answers from unknown people on the internet.

    My non expert view is that your question (1) sounds very dodgy. If you can’t afford to complete the build it could be wrong to use the children’s money to do so. Certainly you need proper advice before doing anything that could be seen as illegal or fraudulent.

    Also your statement that the children would need some sort of statement in their wills to protect you seems odd. Surely what your then adult children put into their wills is up to them.  You will have no say in the matter.
  • Linton said:
    These sorts of legal questions require paid-for legal advice. Not quick answers from unknown people on the internet.

    My non expert view is that your question (1) sounds very dodgy. If you can’t afford to complete the build it could be wrong to use the children’s money to do so. Certainly you need proper advice before doing anything that could be seen as illegal or fraudulent.

    Also your statement that the children would need some sort of statement in their wills to protect you seems odd. Surely what your then adult children put into their wills is up to them.  You will have no say in the matter.
    Thanks for your reply, I'm seeking solicitor advice and will post my answers when I receive them. My options are buy them out of their share, continue as a shared investment that we set out to do, sell everything and split the cash. 
    I can afford to build alone, but not after buying out their share my children's inherited due to our error of not securing things correctly legally. thats the children's gain and now my loss. 
  • Linton said:
    I think you will need a solicitor to help sort things out. 

    You as administrator have no choice. Your pretending that the estate is insolvent when it is not can be seen as fraud and the consequences could be very serious. So I suggest you keep well clear of any such ideas.


    Hi, I just wanted to add, if the life insurance isn't awarded, there is no cash value to cover the estate debts other than in the land. So if I wanted to hold onto the land for the future, then it complicates things or putting the expenses back on myself. I'm not going to sell land in the hundreds of thousands to pay a small amount of debt plus funeral fees.

    This is why I was going to ask if the company would like to reduce the debt for an immediate payment.

    Hopefully there will be enough value.
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