Legal aid charge on house

trwil

Hi All

I have been with my partner for 20 odd years now, i moved into her family home 20 odd years ago and paid my share of the mortgage since then. I have been the main earner.

She got the home from her ex husband in the divorce before i met her, we checked the land registry and it only lists her as an owner.

As we are hitting a certain age, we want to make sure the other person is protected if one of us passes away. We did wills leaving everything to the other person and if i die she will get my pension pot (currently around 300k) and i have life insurance. Its never nice stuff to discuss but has to be done.

However my partner has a legal aid charge on the house (accrued during the divorce as she was awarded property) for about 20k

If she passed before me, would legal aid immediately sell the house and make me homeless? i wouldn't be able to pay off 20k and my partner has no savings. I just dont know if they would be willing to do a deal with me to give me time to pay it off? 

Thanks.

Marcon

trwil said:

Hi All

I have been with my partner for 20 odd years now, i moved into her family home 20 odd years ago and paid my share of the mortgage since then. I have been the main earner.

She got the home from her ex husband in the divorce before i met her, we checked the land registry and it only lists her as an owner.

As we are hitting a certain age, we want to make sure the other person is protected if one of us passes away. We did wills leaving everything to the other person and if i die she will get my pension pot (currently around 300k) and i have life insurance. Its never nice stuff to discuss but has to be done.

However my partner has a legal aid charge on the house (accrued during the divorce as she was awarded property) for about 20k

If she passed before me, would legal aid immediately sell the house and make me homeless? i wouldn't be able to pay off 20k and my partner has no savings. I just dont know if they would be willing to do a deal with me to give me time to pay it off? 

Thanks.

This is possibly a bit messier than it sounds. Do you both have valid, properly drawn up (ie professionally by a solicitor rather than a DIY version) wills which cater for the possibility that you both die at the same time? Just leaving everything to the other party doesn't cater for that thoroughly nasty scenario.

Have you considered the merits (financially and administratively if nothing else!) of getting married, or entering into a civil partnership if you really don't like the idea of marriage?

If you've been paying your share of the mortgage, is there a reason why you aren't on the deeds?

It's unlikely that you could be forced out of your home for as little as £20K, but much depends on the value of the house (ie could you easily buy something else with the remaining sale proceeds after the debt has been cleared) and the sort of 'deal' you'd be able to afford. Also, if the original debt was £20K, bear in mind that will have been increasing for the last 20 years (current interest rate 8%), so would be substantially more by now. Trying to pay off the debt or at least reduce it would make sense, if you're in any position to do so.

It really would be wise to get some legal advice on all of this, based on a full understanding of all relevant facts. Nobody here has those, so any comments can only be speculative.

trwil

Marcon said:

trwil said:

Hi All

I have been with my partner for 20 odd years now, i moved into her family home 20 odd years ago and paid my share of the mortgage since then. I have been the main earner.

She got the home from her ex husband in the divorce before i met her, we checked the land registry and it only lists her as an owner.

As we are hitting a certain age, we want to make sure the other person is protected if one of us passes away. We did wills leaving everything to the other person and if i die she will get my pension pot (currently around 300k) and i have life insurance. Its never nice stuff to discuss but has to be done.

However my partner has a legal aid charge on the house (accrued during the divorce as she was awarded property) for about 20k

If she passed before me, would legal aid immediately sell the house and make me homeless? i wouldn't be able to pay off 20k and my partner has no savings. I just dont know if they would be willing to do a deal with me to give me time to pay it off? 

Thanks.

This is possibly a bit messier than it sounds. Do you both have valid, properly drawn up (ie professionally by a solicitor rather than a DIY version) wills which cater for the possibility that you both die at the same time? Just leaving everything to the other party doesn't cater for that thoroughly nasty scenario.

Have you considered the merits (financially and administratively if nothing else!) of getting married, or entering into a civil partnership if you really don't like the idea of marriage?

If you've been paying your share of the mortgage, is there a reason why you aren't on the deeds?

It's unlikely that you could be forced out of your home for as little as £20K, but much depends on the value of the house (ie could you easily buy something else with the remaining sale proceeds after the debt has been cleared) and the sort of 'deal' you'd be able to afford. Also, if the original debt was £20K, bear in mind that will have been increasing for the last 20 years (current interest rate 8%), so would be substantially more by now.

It really would be wise to get some legal advice on all of this, based on a full understanding of all relevant facts. Nobody here has those, so any comments can only be speculative.

Hi, thanks for the feedback

No we didnt do provision for if both of us die at the same time - she has kids from previous marriage however (who encouraged us to do this, they dont want the house and i essentially raised them)- so we would want it to go to them

The 20k debt estimate is based on me calculating compound interest since the last letter she had about it. If anything happened i could probably pay 5k of it off  initially and commit to 200 or 300 a month to pay it off.

It was never an issue really with the deeds, covid made us think more about this stuff. 

The wills were drawn up by a solicitor and their firm has copies of the wills.

Marcon

trwil said:

Marcon said:

trwil said:

Hi All

I have been with my partner for 20 odd years now, i moved into her family home 20 odd years ago and paid my share of the mortgage since then. I have been the main earner.

She got the home from her ex husband in the divorce before i met her, we checked the land registry and it only lists her as an owner.

As we are hitting a certain age, we want to make sure the other person is protected if one of us passes away. We did wills leaving everything to the other person and if i die she will get my pension pot (currently around 300k) and i have life insurance. Its never nice stuff to discuss but has to be done.

However my partner has a legal aid charge on the house (accrued during the divorce as she was awarded property) for about 20k

If she passed before me, would legal aid immediately sell the house and make me homeless? i wouldn't be able to pay off 20k and my partner has no savings. I just dont know if they would be willing to do a deal with me to give me time to pay it off? 

Thanks.

This is possibly a bit messier than it sounds. Do you both have valid, properly drawn up (ie professionally by a solicitor rather than a DIY version) wills which cater for the possibility that you both die at the same time? Just leaving everything to the other party doesn't cater for that thoroughly nasty scenario.

Have you considered the merits (financially and administratively if nothing else!) of getting married, or entering into a civil partnership if you really don't like the idea of marriage?

If you've been paying your share of the mortgage, is there a reason why you aren't on the deeds?

It's unlikely that you could be forced out of your home for as little as £20K, but much depends on the value of the house (ie could you easily buy something else with the remaining sale proceeds after the debt has been cleared) and the sort of 'deal' you'd be able to afford. Also, if the original debt was £20K, bear in mind that will have been increasing for the last 20 years (current interest rate 8%), so would be substantially more by now.

It really would be wise to get some legal advice on all of this, based on a full understanding of all relevant facts. Nobody here has those, so any comments can only be speculative.

Hi, thanks for the feedback

No we didnt do provision for if both of us die at the same time - she has kids from previous marriage however (who encouraged us to do this, they dont want the house and i essentially raised them)- so we would want it to go to them

The 20k debt estimate is based on me calculating compound interest since the last letter she had about it. If anything happened i could probably pay 5k of it off  initially and commit to 200 or 300 a month to pay it off.

It was never an issue really with the deeds, covid made us think more about this stuff. 

The wills were drawn up by a solicitor and their firm has copies of the wills.

One crumb of good news: it isn't compound interest, it's simple (ie 8% per annum on the original amount), so hopefully rather less than the £20K you fear.

In the eyes of the law, two people can't die at the same time(!), so it would make sense to update the wills to reflect your joint wish her children would inherit. If you don't, there are two possibilities: if you die first and she then dies, with a will making no provision other than for you to inherit, she'll be treated as dying intestate which makes things a bit more complicated for her offspring, even if the outcome is eventually the same. If she dies and then you die a few minutes later, you'll be treated as dying intestate, having inherited all her property...and her children won't have any valid claim. From what you've said, that doesn't sound as if it's what you'd want?

trwil

Marcon said:

trwil said:

Marcon said:

trwil said:

Hi All

I have been with my partner for 20 odd years now, i moved into her family home 20 odd years ago and paid my share of the mortgage since then. I have been the main earner.

She got the home from her ex husband in the divorce before i met her, we checked the land registry and it only lists her as an owner.

As we are hitting a certain age, we want to make sure the other person is protected if one of us passes away. We did wills leaving everything to the other person and if i die she will get my pension pot (currently around 300k) and i have life insurance. Its never nice stuff to discuss but has to be done.

However my partner has a legal aid charge on the house (accrued during the divorce as she was awarded property) for about 20k

If she passed before me, would legal aid immediately sell the house and make me homeless? i wouldn't be able to pay off 20k and my partner has no savings. I just dont know if they would be willing to do a deal with me to give me time to pay it off? 

Thanks.

This is possibly a bit messier than it sounds. Do you both have valid, properly drawn up (ie professionally by a solicitor rather than a DIY version) wills which cater for the possibility that you both die at the same time? Just leaving everything to the other party doesn't cater for that thoroughly nasty scenario.

Have you considered the merits (financially and administratively if nothing else!) of getting married, or entering into a civil partnership if you really don't like the idea of marriage?

If you've been paying your share of the mortgage, is there a reason why you aren't on the deeds?

It's unlikely that you could be forced out of your home for as little as £20K, but much depends on the value of the house (ie could you easily buy something else with the remaining sale proceeds after the debt has been cleared) and the sort of 'deal' you'd be able to afford. Also, if the original debt was £20K, bear in mind that will have been increasing for the last 20 years (current interest rate 8%), so would be substantially more by now.

It really would be wise to get some legal advice on all of this, based on a full understanding of all relevant facts. Nobody here has those, so any comments can only be speculative.

Hi, thanks for the feedback

No we didnt do provision for if both of us die at the same time - she has kids from previous marriage however (who encouraged us to do this, they dont want the house and i essentially raised them)- so we would want it to go to them

The 20k debt estimate is based on me calculating compound interest since the last letter she had about it. If anything happened i could probably pay 5k of it off  initially and commit to 200 or 300 a month to pay it off.

It was never an issue really with the deeds, covid made us think more about this stuff. 

The wills were drawn up by a solicitor and their firm has copies of the wills.

One crumb of good news: it isn't compound interest, it's simple (ie 8% per annum on the original amount), so hopefully rather less than the £20K you fear.

In the eyes of the law, two people can't die at the same time(!), so it would make sense to update the wills to reflect your joint wish her children would inherit. If you don't, there are two possibilities: if you die first and she then dies, with a will making no provision other than for you to inherit, she'll be treated as dying intestate which makes things a bit more complicated for her offspring, even if the outcome is eventually the same. If she dies and then you die a few minutes later, you'll be treated as dying intestate, having inherited all her property...and her children won't have any valid claim. From what you've said, that doesn't sound as if it's what you'd want?

God no i wouldn't want that, they aren't biologically my kids but they treat me as if they are (fathers day cards etc) and if i die last i fully intend to leave the house to them although they really don't care and have their own houses and good jobs.

I will look at updating the wills in case we both die in an accident or something.

Thanks for the info on the debt interest, that will make a big difference and i will work it out later.

As for legal aid forcing a sale, i guess i will have to take legal advice as you suggest. I dont really want to spend a fortune on solicitors but maybe can combine the advice with updating the wills.

Thanks again, i appreciate it.

fatbelly

trwil said:

Hi, thanks for the feedback


The 20k debt estimate is based on me calculating compound interest since the last letter she had about it. If anything happened i could probably pay 5k of it off  initially and commit to 200 or 300 a month to pay it off.

It shouldn't be compound interest. LAA charges attract simple interest at 8%

Keep_pedalling

How much is the house worth? If it is over £325k then a more pressing concert should the OPs partner die first is IHT. Not being married or in a civil partnership means no spousal exemption and IHT would need to be paid within 6 months of death.

The solution to that is simple, get married or become civil partners. 

Voyager2002

I am surprised that no-one has suggested life insurance for your partner: just enough to pay off the Legal Aid debt.

trwil

Keep_pedalling said:

How much is the house worth? If it is over £325k then a more pressing concert should the OPs partner die first is IHT. Not being married or in a civil partnership means no spousal exemption and IHT would need to be paid within 6 months of death.

The solution to that is simple, get married or become civil partners. 

I hadnt considered that, i looked up recent sales and our neighbours house sold for £245,000 a few years ago, its just a modest semi.

As you say civil partners might be easiest, thanks.

trwil

Voyager2002 said:

I am surprised that no-one has suggested life insurance for your partner: just enough to pay off the Legal Aid debt.

I did consider that, its quite expensive for over 50s i think?

Jude57

trwil said:

Voyager2002 said:

I am surprised that no-one has suggested life insurance for your partner: just enough to pay off the Legal Aid debt.

I did consider that, its quite expensive for over 50s i think?

Surely it's worth getting some quotes? I doubt that cover of, say £30,000 (which would cover the Charge, legal costs and funeral costs) would cost very much per month. In your situation, the lack of life insurance for your partner could end up costing a great deal more. Why not have a look at the Insurance page on this site? Plenty of knowledgeable posters to advise you there.