Loan repayable on death?

Bec1000

Hi
I am one of the executors of our father's estate- he died in December 2023.
He had 4 children, 1 from a first marriage and 3 from a second marriage. His second wife (my mum) died in the 1990s. They owned a house as tenants in common.
Mum left half the house to her 3 children, but dad bought this back a few years later with a £70k interest free loan. He never moved out of the house.
In his will (dated 2017) he left the house to the 3 children from his second marriage. As far as I am aware the loan has not been repaid and was repayable on death. The will does not refer to the loan. Should the loan still be repaid now and it is independent of the will, ie the 3 children from the second marriage would receive the house and the loan? thanks

Bec1000

Hi, I am one of the executors of our father's estate- he died in December 2023.He had 4 children, 1 from a first marriage and 3 from a second marriage. His second wife (my mum) died in the 1990s. They owned a house as tenants in common. Mum left half the house to her 3 children, but dad bought this back a few years later with a £70k interest free loan. He never moved out of the house. In his will (dated 2017) he left the house to the 3 children from his second marriage. As far as I am aware the loan has not been repaid and was repayable on death. The will does not refer to the loan. Should the loan still be repaid now and it is independent of the will, ie the 3 children from the second marriage would receive the house and the loan? thanks

Isthisforreal99

A aecured oan on the property? I'd be surprised if it isn't to secure the lenders position. Interest free? Who was the money borrowed from.

Regardless of a will all estate liabilities should be paid before distribution.

p00hsticks

Who was the loan from ? What was put in writing about it at the time ?

p00hsticks

This is a duplicate thread - I'll ask that they be merged

poseidon1

Death was in 2023, so surely if this was a normal commercial loan from a bank or a more specialist equity release arrangement, you have already notified the lender concerned who will want their money back ASAP.

If this was a private arrangement I would still expect the creditor to have secured the loan by legal charge on the property bearing in mind you say the loan was to buy the property.

Either way, the beneficiaries inherit the father's share of the house burdened with the outstanding loan.

molerat

The executor needs to settle the debts of the estate from the estate's assets, if there is not enough money that may mean liquidating other assets - such as the house - to raise the money. Estate debts come before whatever is stated in the will. Get it wrong and you could be held personally liable.

Keep_pedalling

Have you check the land registry to see if there is a charge on the house?

https://www.gov.uk/search-property-information-land-registry

Has anyone been living there since his death?

gwynlas

There is very rarely an interest free loan/lunch unless provided by the bank of mum and dad an I assume that his predeceased him/.

Do you mean that he octained equity realease or a lifetme mortgage on the property?

If so why would he do this unless to ptrovide cash for you and your siblings that you otherwise would have waited all these years for?

Unfortunately unless he;s somehow repaid this loan interest will have accrued and there might be very little capital left once house sold.

Flugelhorn

who was the loan from and where did the money go to?

it all sounds very strange - normally if they were TIC then a trust would own half of the property until father's death - there would be no need to "buy it back"