Charge on property.

stuartthedog

My parents took out a Lifetime Mortgage with Aviva, who have a charge against the property.

My father has since died and my sister and I, the executors, are the beneficeries of his half of the property (which was held as equal shares as Tenants in Common).

I have been advised by Aviva that whilst they have a charge on the property (i.e. whilst they are outstanding money) they will not agree to a change of ownership at the Land Registry.

How can we carry out the terms of the Will without having the money to pay off the debt, as we can't/don't want to sell the property whilst my Mother is still living there. The Will was written in this way in the first place to try to avoid the sale of the property should the remaining parent require residential care, but it would now appear that should my Mother require residential care we would need to sell the property to clear the debt with Aviva and it would then appear to be too late to 'claim' our entitlement, as we wouldn't then be able to record our 'inheritance' as the property will have already been sold.

Any advice would be appreciatted.

Flugelhorn

I don't think you need to do anything about changing the names at the LR - you have the documentation - I don't think most people do change it. If mother goes into care then it would be sold (presumably by one of you as attorney) - Aviva would be paid off and you would get your share then.  

Keep_pedalling

Did your father give your mother a life interest in the property? This would be the normal thing to do as it both protects your inheritance and the security of the surviving spouse. If that is the case then although legal ownership is held in trust, your mother mother is the beneficial owner and nothing needs to be done.

If that is the case then if your mother should need residencial care and the house needs to be sold, once the loan is paid off your mother gets half of the remaining proceeds, and either you and your sibling get the other half or you and your siblings share is still held in trust with your mother having the right to any income earned on it. This all really depends on the exact terms of your father’s will. 

This sort of arrangement in wills is not to prevent the sale of property if the surviving spouse needs residencial care but to protect the inherited share from being used for care cost of the surviving spouse or in the event that the surviving spouse r3marroes and fails to make a new will.

The terms of the loan will also require it to be repaid in the event of the second death or when the surviving spouse moves ealsewhere. 

Mark_d

As I understand it, when the property is ultimately sold, Aviva will get the amount owed to then (unknown at this time) and the rest forms part of your parents estate.  It is only at that time when you'll know what you are due to inherit

RAS

If your parents, as opposed to your father, took out the lifetime mortgage, Aviva are paid off, half the remainder is set aside to pay mum's care fees and half is probably invested. Mum gets the income, you get the capital when she dies.

But a lot depends on the terms of the Immediate Post Death Interest trust. What does the will say about the terms?

You will need to register the trust with the HMRC within 2 years of dad's death.