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  • FIRST POST
    • Adams18
    • By Adams18 14th Jun 19, 3:03 PM
    • 103Posts
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    Adams18
    Complicated Probate case... sigh
    • #1
    • 14th Jun 19, 3:03 PM
    Complicated Probate case... sigh 14th Jun 19 at 3:03 PM
    Hello,

    I've posted in another forum about this situation, but from a different angle regarding the assets. Thread title "Inherited Mortgage due to mature... options?"

    I live in a family home with my mother who owns 75%. The other 25% used to be owned by my father who passed away two years ago. He also owned the mortgage which is outstanding.

    He did have a partner (not legal wife) at time of death who is not my mother.

    This partner has laid claim to the 25%, however this 25% is held in a special "trust" and is only accessible in the the triggering events that my mother (75% owned) dies, remarries or the lender forces sale of the property if mortgage is not paid. The partner has laid claim under the 1975 dependents act.

    But theoretically speaking the 25% does not form part of the estate of my father, nor does it hold any nominal value as it can't be accessed, not even by myself as the heir.

    It's so ridiculously confusing, I've been stressing for two years over it and the mortgage is due to be paid soon on the property.

    He had nothing else in his estate other than the 25% which is a charge back to him in the event of triggering events explained above.

    Is worth me doing probate? To speak to the land registry about ownership for the beneficial interest? And to speak to the mortgage lender? About paying the mortgage? Or will the lender just accept money from anyone as long as it gets cleared?
    Last edited by Adams18; 14-06-2019 at 3:05 PM.
Page 2
    • Adams18
    • By Adams18 15th Jun 19, 2:42 PM
    • 103 Posts
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    Adams18
    If there is no caveat now one possible scenario

    Get the grant

    estate gets 25% less mortgage value.

    Mother gets 75%+mortgage value

    If you can buy the estates beneficial interest then you have the house.

    Estate has cash.

    Then you argue out the beneficiary of the estate.
    Originally posted by getmore4less
    Apologies, but I couldn't follow!
    • elsien
    • By elsien 15th Jun 19, 2:44 PM
    • 19,849 Posts
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    elsien
    So the mortgage was just in dad's name?
    And you've chosen not to tell them he's passed away to try to avoid the complications of mum having to remortgage/sell etc? Isn't that one of your obligations as an executor?
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
    • Linton
    • By Linton 15th Jun 19, 2:50 PM
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    Linton
    You must tell the lender that your father has died.
    • Adams18
    • By Adams18 15th Jun 19, 2:52 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    You must tell the lender that your father has died.
    Originally posted by Linton
    I plan to, the lender expects to be paid at the end of the maturity period.. their money is ready, remortgage option is ready.
    • Adams18
    • By Adams18 15th Jun 19, 2:54 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    So the mortgage was just in dad's name?
    And you've chosen not to tell them he's passed away to try to avoid the complications of mum having to remortgage/sell etc? Isn't that one of your obligations as an executor?
    Originally posted by elsien
    It's in his sole name, the lender will not deal with anyone else in divulging account details, except we get their correspondence to our address all the time, which is where my dad USED to live 20 years ago.,

    My mom will never be able to remortgage she is retired on benefits.

    I earn very well, and between me and my mom we have 80K on hand to pay the lender if it comes down to it.

    I have not yet got a grant/ letters of administration. I don't know if they will accept my money as a donation? At this stage, I am a nobody, the owner of the mortgage is deceased, and they don't deal with my mom except to take money from her for arrears/monthly payements which I give to her.

    I have not yet applied for letters of administration to deal with lender, what assurance do i have if I pay 80k to clear the mortgage and close the account when neither me or my mom are account holders, it would feel like a donation. 80,000 hard earned savings.
    Last edited by Adams18; 15-06-2019 at 2:58 PM.
    • Tom99
    • By Tom99 15th Jun 19, 2:56 PM
    • 4,902 Posts
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    Tom99

    "The value of that interest is going to be way below the 80k debt"

    "You apply for probate giving a value of that interest as lets just say 40k but with a debt of 80k"

    What do you mean by the above? You mean the value accumulated on the 25% over the period my mother remains alive versus 80k?

    So you mean to say 40k minus 80k = -40k in the estate to discourage claimant, as there is not much in it for her?
    Originally posted by Adams18
    Its not clear what exactly you mean by 'chargeback'
    I assume your father has a 25% interest in the property but subject to a life interest to your mother?
    The way to value such an interest to take the current market value, lets say 125k but then defer that amount for a given number of years at an assumed discount rate.
    Lets say at 5%pa
    So if it was deferred say 1yr at 5% - 125,000/1.05=119,000
    Say your mother's life expectancy was 30yrs - 125,000/(1.05)^30=29,000
    Way below the debt of 80,000
    • Adams18
    • By Adams18 15th Jun 19, 3:03 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    Its not clear what exactly you mean by 'chargeback'
    I assume your father has a 25% interest in the property but subject to a life interest to your mother?
    The way to value such an interest to take the current market value, lets say 125k but then defer that amount for a given number of years at an assumed discount rate.
    Lets say at 5%pa
    So if it was deferred say 1yr at 5% - 125,000/1.05=119,000
    Say your mother's life expectancy was 30yrs - 125,000/(1.05)^30=29,000
    Way below the debt of 80,000
    Originally posted by Tom99
    It is meant that if the house is sold, he would have got 25% of the net proceeds after the mortgage debt was cleared from the proceeds first, and IF there was even a debt at that point (if the debt hadn't;t already been paid off or removed).

    And the house cannot be sold unless my mother remarries or she dies, or the bank sells the house to get their money because no one paid the mortgage, the mortgage is of course tied to the property as a secured loan, the lender couldn't care less about any court order, consumer law trumps whatever court order I have stated in this thread.

    And if lender repossess the home, it would be sold at a less than favourable price and the net proceeds would split between his estate and my mother at 25 and 75 per cent respectively.

    Not sure where the life interest plays into this... the nominal value of the 25% now is 125K IF the court order clause I described was triggered... what would it be 5 years from now? Ten years? I don't know. Won't matter until my mother passes or remarries, or the lender repossess.
    Last edited by Adams18; 15-06-2019 at 3:06 PM.
    • Tom99
    • By Tom99 15th Jun 19, 3:05 PM
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    Tom99
    I have not yet applied for letters of administration to deal with lender, what assurance do I have if I pay 80k to clear the mortgage and close the account when neither me or my mom are account holders, it would feel like a donation. 80,000 hard earned savings.
    Originally posted by Adams18
    The mortgage is secured on the house. What do you want assurance about?
    Obtain probate, pay off the mortgage than you and your mother will own the house.
    Deal with the ex-partners claim as a separate matter.
    • Adams18
    • By Adams18 15th Jun 19, 3:09 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    The mortgage is secured on the house. What do you want assurance about?
    Obtain probate, pay off the mortgage than you and your mother will own the house.
    Deal with the ex-partners claim as a separate matter.
    Originally posted by Tom99

    Doing probate then paying mortgage is fine, paying mortgage without having done probate would make me feel uncomfortable as I am a nobody donating 80K to the lender, with not invoice, formal account closing procedures etc etc.

    Looks like I will have to do as you suggested, 80K is a lot to drop on this, if somehow... I ended up owing this claimant 25 per cent of the house on top of that at some point in the future.

    Then i'd be 80K plus 25% down, but all speculation.
    • Tom99
    • By Tom99 15th Jun 19, 3:16 PM
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    Tom99
    It is meant that if the house is sold, he would have got 25% of the net proceeds after the mortgage debt was cleared from the proceeds first, and IF there was even a debt at that point (if the debt hadn't;t already been paid off or removed).
    Originally posted by Adams18
    So (500k-80k)/4=105k
    In effect 75% of the mortgage repayment would come out of your mother's share.
    • Sea Shell
    • By Sea Shell 15th Jun 19, 3:16 PM
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    Sea Shell
    Under normal circumstances wouldn't the mortgage lender give some time for probate to be obtained and the debt settled from the estate??

    They wouldn't go immediately to repossession on notification of death, surely.

    Who is the lender, as someone may have personal experience of this.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow " JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!!
    • getmore4less
    • By getmore4less 15th Jun 19, 3:17 PM
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    getmore4less
    Apologies, but I couldn't follow!
    Originally posted by Adams18
    That was just a summary of what you have said in previous post taken to the next stage of realising the beneficial interest in the property.

    What the partner may have worked out is that if they wait and you pay off the mortgage they potentially get more money into the estate to have a claim over(25% of the mortgage)

    But my solicitor warned me that I were to remortgage or pay the 80k debt in 3 months, the court order for the triggering events would cease (as it is somehow incumbent on the existing mortgage/outstanding liability on the property.
    No ideas what that is all about but don't have access to the docs.

    Anyway

    what I was saying is now there is nothing stopping the grant get one buy out the beneficial interest of the estate and separate the house from the estate.

    Then argue who inherits from the estate once you have the grant the partner would need to instigate the proceeding.
    Will they be able to afford it.

    Caveats are relatively cheap, chances are the partner has finally realised that any claim would be costly and probably fail so are backing off.


    note : the beneficial interest into the estate does not have to be real cash until someone claims it as the default beneficiary will be children(you and any siblings) you will only need enough initially to cover the siblings shares, if a claim succeeds then amount of the claim
    Last edited by getmore4less; 15-06-2019 at 3:23 PM.
    • Linton
    • By Linton 15th Jun 19, 3:19 PM
    • 11,248 Posts
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    Linton
    From Tom99 s numbers it would seem that your father died owing money, his debts were larger than his assets. So assuming I am not completely confused by the situation ISTM what could happen is
    1) you tell the lender what has happened and what you plan to do to get their money repaid.
    2) mother buys the 25% from your father’s estate for a professionally determined value.
    3) That money plus plus an extra amount is used to pay off the mortgage, the money being a gift from you to your mother.. I guess that your mother is jointly liable with your father’s estate for paying off the mortgage anyway.

    All debts must be paid before beneficiaries get anything. So in this case there is no money for the partner.
    • Tom99
    • By Tom99 15th Jun 19, 3:24 PM
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    Tom99
    From Tom99 s numbers it would seem that your father died owing money, his debts were larger than his assets. So assuming I am not completely confused by the situation ISTM what could happen is
    1) you tell the lender what has happened and what you plan to do to get their money repaid.
    2) mother buys the 25% from your father’s estate for a professionally determined value.
    3) That money plus plus an extra amount is used to pay off the mortgage, the money being a gift from you to your mother.. I guess that your mother is jointly liable with your father’s estate for paying off the mortgage anyway.

    All debts must be paid before beneficiaries get anything. So in this case there is no money for the partner.
    Originally posted by Linton
    No the OP has now confirmed that father was entitled to 25% of the net proceeds after redeeming the mortgage so in effect mother is liable for 75% of the mortgage.
    That explains the interest only mortgage, why would father reduce/repay mortgage when he would only get 25% back.
    Last edited by Tom99; 15-06-2019 at 3:27 PM.
    • getmore4less
    • By getmore4less 15th Jun 19, 3:28 PM
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    getmore4less
    Would really help if you pulled this into one thread and stop dribbling new information selectively into different places.
    • Adams18
    • By Adams18 15th Jun 19, 3:29 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    So (500k-80k)/4=105k
    In effect 75% of the mortgage repayment would come out of your mother's share.
    Originally posted by Tom99

    That is exactly right, which I told solicitor and he was like yeah, when you divy it up ... thats pretty much how the cookie crumbles.

    But what can we do? No life insurance, no endowment policy, someone has to pay or the house is gone. Been here for 25 years.
    • Adams18
    • By Adams18 15th Jun 19, 3:32 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    Under normal circumstances wouldn't the mortgage lender give some time for probate to be obtained and the debt settled from the estate??

    They wouldn't go immediately to repossession on notification of death, surely.

    Who is the lender, as someone may have personal experience of this.
    Originally posted by Sea Shell

    Yeah you are probably right, they would give time and extension for letters of administration to come through... so I may have some time. Lender is santander
    • Adams18
    • By Adams18 15th Jun 19, 3:33 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    Would really help if you pulled this into one thread and stop dribbling new information selectively into different places.
    Originally posted by getmore4less

    And how can I do that
    • Mojisola
    • By Mojisola 15th Jun 19, 3:36 PM
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    Mojisola
    It's in his sole name, the lender will not deal with anyone else in divulging account details, except we get their correspondence to our address all the time, which is where my dad USED to live 20 years ago.

    I earn very well, and between me and my mom we have 80K on hand to pay the lender if it comes down to it.

    they don't deal with my mom except to take money from her for arrears/monthly payements which I give to her.
    Originally posted by Adams18
    If you did a documented loan to your mother of the money needed to clear the mortgage, wouldn't that protect your money?
    • Adams18
    • By Adams18 15th Jun 19, 3:52 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    No the OP has now confirmed that father was entitled to 25% of the net proceeds after redeeming the mortgage so in effect mother is liable for 75% of the mortgage.
    That explains the interest only mortgage, why would father reduce/repay mortgage when he would only get 25% back.
    Originally posted by Tom99
    This is correct.
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