Solicitor's letter 7 months after Probate / Estate closed and finalised

Jenniefour · 2 November 2017 at 4:01PM

Tom, would that apply, though, to a property which is held as "joint tenants"? Which I think has a very different meaning to "joint assets", as that term is used in inheritance matters. Joint tenancy of a property only applies as long as both people are alive, it does not continue after the death of either one of the parties. And it wouldn't fall into the estate in many circumstances.

I think this case is more complicated. If the parents had done a legal financial settlement after the divorce but simply forgot to take father's name off the deeds then that would have demonstrated intent and it may then have been regarded as part of the estate. That very scenario happened to a friend 15 years after the divorce and financial settlement. Solicitors had to sort it out, I don't know exactly how they did it but friend did not have a capital gains bill to pay although there was IHT to pay. How and whether intent should or can be taken into account in this case I have no idea, and father paying mother's mortgage might complicate that further (or not).

OP needs to get proper advice from a good solicitor before possibly unintentionally making it all more complicated by trying to respond.

Tom99 · 2 November 2017 at 4:22PM

Jenniefour wrote: »

Tom, would that apply, though, to a property which is held as "joint tenants"? Which I think has a very different meaning to "joint assets", as that term is used in inheritance matters. Joint tenancy of a property only applies as long as both people are alive, it does not continue after the death of either one of the parties. And it wouldn't fall into the estate in many circumstances.

[FONT=Verdana, sans-serif]Some people seem to disagree with me, as you can see from the above posts, but plenty of others agree that a DOV can be used to redirect joint property assets. Just to quote three:-

[/FONT] [FONT=Verdana, sans-serif]https://www.taxation.co.uk/articles/2001/11/08/1421/replies-queries-4-post-death-planning[/FONT]

“[FONT=Verdana, sans-serif]The Inland Revenue takes the view that a joint tenancy can be severed for the purposes of section 142(1)(a), Inheritance Tax Act 1984, on the basis that this transaction comes within the words 'or otherwise': see Tax Bulletin 19 (October 1995).”

[/FONT] [FONT=Verdana, sans-serif]https://www.taxadvisermagazine.com/article/emotional-distress
[/FONT]
“[FONT=Verdana, sans-serif]Assets owned as beneficial joint tenants. These pass not by the will but by survivorship. It isn’t the will that is varied, but ownership of an inherited asset, irrespective of whether that inheritance is by will, intestacy or survivorship.”

[/FONT] [FONT=Verdana, sans-serif]https://www.barkerevanslaw.co.uk/2016/09/deed-of-variation-changing-a-will-after-death/
[/FONT]
“[FONT=Verdana, sans-serif]a deed of variation can be used to change the way jointly owned property is inherited. Property that is owned as joint tenants in equity passes by survivorship to the remaining co-owners but this might not be what the surviving co-owners want. They can re-direct the deceased’s share elsewhere by ‘severing’ the joint tenancy and making a deed of variation.”

The deed of variation would be more complicated than normal but I can't see why it could not be done.
[/FONT]

Jenniefour · 2 November 2017 at 4:37PM

I don't believe this is anything to do with a DOV at all.

Interesting debate though, it shows how complex the law can be. And also reminds us, for those who are divorced - get the financial settlement sorted out and make sure it's acted on before something untoward happens.

Correction: Removed reference to (non-existent) will, my error.

newjersey · 2 November 2017 at 8:16PM

I have been trying to understand this thread and I'm still confused, why isn't the sister getting 50% of the house ? Is it because a hitch the mother didn't realize was there, before she died ? Did the mother want/ expect her home to be shared equally among her children ? Does it matter if one child is a perfect prudent saver and the other a reckless irresponsible spender ? It's not a moral test as to who gets most, is it ? Also, what would happen if the father became sick in a few years and needed care, will they want the house he "gifted" back ?

childofbaahl · 2 November 2017 at 8:39PM

The whole issue centers on the fact my late mother didn't remove my father from the deeds so it passed to him on her death and bypassed the estate. My mother made several wishes before her death but nothing was ever laid out in a will so there is no legal road map to follow other then the house going to my father. So if the house was part of the estate I couldn't follow her wishes, I would have to follow the rules of intestacy as there was no will.

There was never any formal divorce agreement regarding the assets of the marriage so my Mum must have known the house was still in both names, maybe she thought that her half would go to her kids on her death, maybe she didn't realise the true nature of the way the house was originally divided. My dad continued to give her money towards the mortgage and the insurances on it so she must have known.

My father is in prime health and there's nothing to suggest that he will need care any time soon, so as long as he doesn't need a care home within the next 3 years then the council can't take the house back.

It all comes down to the fact that my sister agreed with my father on the sum that she has received (though I believe it was all over the phone as my dad isn't one for emails.) When I was starting the process of applying for the mortgage and told that I had to own the house for 6 months before they would agree, my sister tried to force my dad to sell the house and split it 3 ways. She got her 33.33% and now may feel she has the money to spend on solicitors to try and get some more.

As far as IHT goes for my father, including the house, he doesn't come any where near the threshold and unless he wins the lottery within the next 6 years, that isn't an issue.

newjersey · 2 November 2017 at 9:26PM

So basically, your mother died and your father inherited the house, neither child got anything of the house. Your father said, here you can have my house, you say, thanks and take it. Another child/sibling is sitting there who gets nothing so you say, here have this sum of money from me to you & she takes it. Now you are sitting there with 2/3rds of your mother's house & she with 1/3rd. If someone was planning on taking legal action against me my instinct would be to put myself in their shoes and how would I make a case while in those shoes, then I would have a better idea what my defence would be or if I even had one. I think you do need to get good legal advice.

childofbaahl · 2 November 2017 at 10:26PM

Not 2/3rds I got a mortgage for 50% of the house and gave my sister what she and my father had agreed on with my father getting the rest. She had agreed to give him a large gift back when we thought the house was part of the estate and so that continued after too, she then tried to get my dad to sell the house before he'd signed it over to me stating that it should be split 3 ways, she now has that 3rd.

What grounds does she have to take legal action though as the house was my fathers after my late mother's passing. My sister lost her interest in it when it was shown to not be part of the estate and as such it wa's my father's to do with as he pleased. If he decided to gift it to the Cat protection league then that's his business. But my sister agreed to and even was the one who came up with the 3-way split so how can she come back afterwards asking for seconds?

Do you really think she has a claim on the house? Or do you just feel the split (who ever originated it) is unfair?

Tom99 · 3 November 2017 at 2:51AM

childofbaahl wrote: »

Do you really think she has a claim on the house? Or do you just feel the split (who ever originated it) is unfair?

I think the split was unfair as you get more out of it than your sister. You should have got a mortgage for 60% and given your sister 40% and your father 20% to cover his CGT.

I can understand why your sister feels agrieved but I agree with you she has no legal claim to more.

It was very generous of your father to give away the house, particularly since you say he had been helping with the mortgage and by all accounts is a long way short of £325k even with the house. However he should have treated you both equally to do otherwise was always going to cause upset.

Jenniefour · 3 November 2017 at 10:25AM

childofbaahl wrote: »

Do you really think she has a claim on the house? Or do you just feel the split (who ever originated it) is unfair?

Your sister might think she has a further claim, that could be the problem. I think I've confused things here by mentioning intent. Apologies for that.

Lots of folks expect things, and might have been promised them, but it doesn't always work out that way.

You and your sister benefitted equally from the house, and since the house became your fathers and wasn't part of your mother's estate it was his choice what to do with it. As you say he could have given it to the Cat charity.

I do think it's worth getting legal advice on how to bring this to an end swiftly.

childofbaahl · 3 November 2017 at 3:50PM

Again thank you everyone for all your comments and recommendations - I will be seeking legal advice next week on this.

Solicitor's letter 7 months after Probate / Estate closed and finalised

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