Gaining a beneficial interest

Sea_Shell

poseidon1 said:

Seems to me there is a degree of moral hazard providing responses to this OP, without proper explanation of the entirety of the background, context and circumstances of the various players in this 'domestic' opera.

My concern is the OP maybe cherry picking  aspects of  responses here  which suits their own objectives and desired outcome.

Wow.

I just wanted to know how far an executor needs, legally, to delve into this potential issue.

If they'd paid £10k towards a new kitchen, for example , then it would likely be treated as a gift, in lieu of "rent", unless there was any paperwork to suggest otherwise.

Rather than a claim on a % of the house.

Marcon

Sea_Shell said:

p00hsticks said:

I'm no expert, but in my view if you're going down that route you'd also need to take into account the fact that they've lived (presumably) rent-free in the accommodation for many years, which may well offset the money they've contributed to improvements (which they will also have benefitted from). 

So one can be "offset" against the other?

Does an executor have a legal duty to ascertain (prove) what any "net" contribution may have been?

An executor has a legal duty to administer the estate in accordance with the terms of the will. They have a duty to pay any debts owed by the deceased.

Replying to an earlier post on this thread by saying that's 'all you need to know for now' could be taking a needless risk, and creating needless confusion and grief at some future point.

As the 'deceased' is apparently still with us, then a new will - a proper one, drawn up by a professional who has all relevant facts - is better than relying on the replies posted in response to the limited information you've posted. 

Dead_keen

Sea_Shell said:

Keep_pedalling said:

Sea_Shell said:

Keep_pedalling said:

What is the exact relationship between the deceased and the house owner? 

Long term partner.  'Deceased' still legally married, estranged.  

You are not bending very transparent here, I am still not clear if this person is still with us or not.

This money could have given them a beneficial interest in the house or it could have been a gift. With no documentation saying otherwise then I would assume it was a gift and treat it as such in administering the estate. If the person is still alive and is still compos mentis then they are in a poison to clarify the situation.

If that's the default legal position - gift  (without any documentation to the contrary) then that's all I need to know...for now.

Sorry, but it's definitely not the default legal position. The legal position starts and ends with the full facts and circumstances. 

Once those are known, the executor can get on with their duty of collecting in the estate.  They have to act reasonably - it is not just pursue every single penny no matter what the cost of getting it.  But if an executor just sticks their head in the sand then they are not acting reasonably.  While the executor might not be the owner of the property, there may still be a conflict of interest to be avoided (e.g. if owned by a relative). 

Sticking heads in sands is also a good way of making the executor liable for careless / deliberate penalties with the IHT forms if HMRC take a different view. 

Sea_Shell

I understand that you are all trying to dot the i's and cross the t's, but you do seem to be wanting to turn a fairly simple question into a difficult one.

Person A transfers £10,000 to their partner, B.
B uses the money towards a new kitchen in the house they solely own.
A has been living there "rent free", but contributing to other bills.
A dies. (with a will or without), either way, leaves their estate to their adult children.
One of these acts as executor/administrator.
They go though A's accounts to see what transactions may have been made in the last 7 years.
They find the £10k, with no associated paperwork, but the transaction says "kitchen" in the reference.
B freely admits, in their grief, that the money WAS specifically for the kitchen, without realising what they may be saying. (when they maybe should of just stuck to "it was a gift")

At this point, exec. needs to assess what to do about the £10k.
Treat it as a gift, or pursue the owner for a relevant % of the house value, opening a potential huge (and expensive) can of worms.

What would be "reasonable" in the above circumstances?
What if the amounts involved are bigger - say £50,000?


How much of this can be ascertained before the executor is deemed to have "intermeddled" and so can no longer just walk away?


Of course there is also the chance that B dies first and A becomes homeless.

BikingBud

Sea_Shell said:

I understand that you are all trying to dot the i's and cross the t's, but you do seem to be wanting to turn a fairly simple question into a difficult one.

Person A transfers £10,000 to their partner, B.
B uses the money towards a new kitchen in the house they solely own.
A has been living there "rent free", but contributing to other bills.
A dies. (with a will or without), either way, leaves their estate to their adult children.
One of these acts as executor/administrator.
They go though A's accounts to see what transactions may have been made in the last 7 years.
They find the £10k, with no associated paperwork, but the transaction says "kitchen" in the reference.
B freely admits, in their grief, that the money WAS specifically for the kitchen, without realising what they may be saying. (when they maybe should of just stuck to "it was a gift")

At this point, exec. needs to assess what to do about the £10k.
Treat it as a gift, or pursue the owner for a relevant % of the house value, opening a potential huge (and expensive) can of worms.

What would be "reasonable" in the above circumstances?
What if the amounts involved are bigger - say £50,000?


How much of this can be ascertained before the executor is deemed to have "intermeddled" and so can no longer just walk away?


Of course there is also the chance that B dies first and A becomes homeless.

If they are both still alive who has promoted the conversation about wills and LPAs with A and B?

Have they considered, or even been prompted to consider, marriage or civil partnership?

I currently see nothing other than a sum of money that has been transferred to another party. There appear to be no supporting docs to comment upon the basis of the transfer or the protection of any perceived rights to reclaim the cash.

To ensure a holistic protection of either, severally, and both parties, jointly, positions going forward it would be only logical to address ownership of the property, LPAs and wills that both are content with, as a matter of urgency.

If they cannot agree and produce instructions that enables and ensure suitable protection for both parties then that seems to be their desired outcome.   

And as is often the case the simple phrase "you can sort it all out once we've gone" wreaks havoc!

Sea_Shell

No one has prompted the discussion.

They cannot marry.

It's "complicated", like a lot of families.

I'm not sticking my head above the parapet on this.  Stubborn, doesn't cover it.

AIUI there are currently no wills or LPAs in place for either party!!

And as is often the case the simple phrase "you can sort it all out once we've gone" wreaks havoc!

Never a truer word spoken.

Anyway, I'll leave it here for now, as more "details" would constitute airing others "laundry" in public.

Marcon

Sea_Shell said:

I understand that you are all trying to dot the i's and cross the t's, but you do seem to be wanting to turn a fairly simple question into a difficult one.

Person A transfers £10,000 to their partner, B.
B uses the money towards a new kitchen in the house they solely own.
A has been living there "rent free", but contributing to other bills.
A dies. (with a will or without), either way, leaves their estate to their adult children.
One of these acts as executor/administrator.
They go though A's accounts to see what transactions may have been made in the last 7 years.
They find the £10k, with no associated paperwork, but the transaction says "kitchen" in the reference.
B freely admits, in their grief, that the money WAS specifically for the kitchen, without realising what they may be saying. (when they maybe should of just stuck to "it was a gift")

At this point, exec. needs to assess what to do about the £10k.
Treat it as a gift, or pursue the owner for a relevant % of the house value, opening a potential huge (and expensive) can of worms.

What would be "reasonable" in the above circumstances?
What if the amounts involved are bigger - say £50,000?


How much of this can be ascertained before the executor is deemed to have "intermeddled" and so can no longer just walk away?


Of course there is also the chance that B dies first and A becomes homeless.

There is nothing simple about the situation you are describing, not least because you haven't given all essential information. Nobody here has a hope of giving you a fully informed and accurate reply based on the selective snippets you are choosing to share - as of course is your right. I think there is often far too much over-sharing on this forum! Just don't make the mistake of thinking you have been given any information on which you can rely. 

Get some professional advice - it could be much cheaper than opening that expensive can of worms.

Sea_Shell

What criteria need to apply, for someone to gain a financial interest in a property, that they don't own, but live in?

If they have made significant payments towards renovation or improvements to the property?
If they've paid towards any mortgage?

Can the owner argue (take into account) that these should be off-set against, a period of "rent-free" living?

EG, have contributed £x towards, say, an extension, but have also had the benefit of not paying any rent in x years, which could be argued, more than exceeds the £x spent.


Rent could've been "worth", say, £600 per month, over 15 years, so £108,000, against a payment for renovations of £20,000.   

So no claim could be made for a financial interest being obtained, in those circumstances.

Sea_Shell

I appear to have muddied the waters by posting the question from the potential 'executors' POV.

I've asked the question about purely the property aspect on the housing forum, as its been pointed out that this section is not relevant as no one has died.

theartfullodger

Marriage or civil partnership amongst others.. (eg wife not on deeds but does everything for 30 years...).

Quite right to.