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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 5
    • Adams18
    • By Adams18 16th Jun 19, 12:28 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    Just thinking ahead for the future, assuming this all gets sorted favourably.

    How old is your Mum and is she in good health? How old are you? You seem very young if you only started work 6 years ago.

    Can your Mum afford the upkeep of the house on her own? Is she allowed to sell the property?

    If you've ploughed 80k into your Mum's house and you can't release your 25% unless a trigger event occurs how do you propose to live an independent life once you eventually move out with or without a partner of your own?

    Do you have other savings? You won't qualify as a first time buyer if you did want to buy.

    Just thinking out loud.
    Originally posted by Sea Shell
    All the points you've made are constantly on my mind, that why I am so stressed in this situation.

    I am 30, unmarried. My mom is retired on benefits, health is not good, full rate disability. She doesn't get as much from benefits as the claimant does, for some reason.The 80K was saved jointly with me and my mom.

    I have 40K seperate savings for myself.

    how do you propose to live an independent life once you eventually move out with or without a partner of your own?

    I have no clue, I've certainly thought about it several times, but what can I do? This house means a lot to me, but it means even more to my mom. I'll have to sacrifice the idea of living an independent life and just continue to support my mom. It's not my fault I've ended up in this situation, my father has a track record of doing this to families.

    But everything you mentioned just adds to the complexity of this for me. My mom always said, this property is hard to get if we lost it, it's in a good location with good transport links... we'd never get anything better.
    • Adams18
    • By Adams18 16th Jun 19, 12:31 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    Can someone even bring a claim under "dependency" if the estate is intestate?

    They've not been left out of a will, if there was no will.


    * Edit apparently so....see

    https://www.legislation.gov.uk/ukpga/1975/63
    Originally posted by Sea Shell
    Yep, it's given cohabitees and the like.. a life line as so many foreign women were brought to UK and taken advantage off with promises, and sham/religious cermonies being passed off as "proper" marriages but not registered.

    Then when the person dies, the partner is left without anything, based on the rules of intestacy.

    I've read several cases for those claiming through the dependent act, each case is different and really requires a judge to assess everything.

    When you ask a solicitor... well what are her chances under the dependents act? They all slump in their chair and say "Well who's to say really?"
    • Adams18
    • By Adams18 16th Jun 19, 12:38 PM
    • 103 Posts
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    Adams18
    The forms are pretty straight forward so I would do it yourself. The biggest problem is arriving at the market value of your father's share in the house. Do your have an RICS valuation as at the date of death.

    I assume the asset side would be something like this:
    Open Market Value 500k x 25% share = 125k
    But your mother has a life interest in this 25% as well as owning outright her 75%, so the 125k should be deferred.
    If you take age 84 as your mothers life expectancy, see here to back up your claim:
    http://www.riskprediction.org.uk/index_lifeexp.php
    And a deferment interest rate of say 5%, then defer the 125k for 30yrs at 5%:
    (500k/4)/(1.05^30)=28,922 call it 29,000.

    There may be some guidance in one of the Valuation Office Manuals about how to value property subject to a life interest but I can't find it at the moment.

    Then on the debt side its more straight forward 80k/4=20k
    So you father would have a net estate of c 9k

    But remember:
    All figures must be as at date of death, that includes the full market value of house, mortgage outstanding.
    There will be other adjustments, cost of funeral to deduct, cash assets to add etc.
    Originally posted by Tom99
    Many thanks for your thought out response and efforts. I am still not understanding the deferment stance, the losing 5% a year? Why is the case? Isn't it always 25% of the value of the house at time of sale, after a mortgage has been redeemed and IF the mortgage still exists at that time?

    The mortgage/debt is due to mature soon... so If I do probate before that time, and then it gets cleared the probate would reflect a debt that doesnt exist anymore.

    I didn't do a RICS, 6 Months after he passed I brought in an estate agent (foxtons) who valued the house on market value/movements. "Having fully considrerd the local market activity and taken into account all aspects of your property, including its general condition, and the location etc.."
    • Adams18
    • By Adams18 16th Jun 19, 12:42 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    Sensitive question, but I'll ask anyway.


    When your mum dies, who is likely to benefit from her estate? Are you an only child or are there siblings? Or any other dependents?


    Has she made a will?



    Apologies if these have already been answered, but worth considering if you don't want to lose the house to pay other bequests etc.
    Originally posted by Manxman in exile

    I half a half sister from my fathers side, but she has made it very clear to me that she has no interest in me and my mom's house as this belongs to me and my mom and she would never want to get involved. I have a good relationship with my sister, and I keep her aprised of my current situation should she need to assist in signing anything. She is 38 years old.

    She is also reasonable well off. So I would be the only beneficiary.

    Me and my mom both made wills, but they are those DIY ones that you get from like WHSmith, and in hindsight probably not the best thing to do given the confusion that ensues when someone dies. Me and my mom plan to leave proper wills written in the legal language that is understood clearly once we sort out some of this mess, but even then... it;'s just me and her that stand to benefit from each other if either dies... we have no one else.
    • Adams18
    • By Adams18 16th Jun 19, 1:00 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    The property was originally occupied by the deceased, his wife and the OP.

    The deceased took out an interest only mortgage on the property in his sole name.

    The mortgage loan was for 80,000.

    The deceased divorced his wife - the divorce settlement gave the deceased a 25% interest in the property but he could not realise his interest until the ex wife died or remarried.

    The deceased did not remarry but lived with a partner for a number of years.


    It appears that the interest only payments have been met by the OP/his mother for the last 20+ years - he has not advised the mortgagee of his father's death - it is unclear whether the mortgagee ever knew that it was the OP/his mother who was making the interest payments.


    The deceased died intestate with assets of a few thousand, a liability of 80,000 and a right to 25% of the value of the property on the death or remarriage of the ex wife.

    The deceased had only one child (the OP)- the OP inherits under the intestacy rules.

    The OP therefore inherits a few thousand, the debt and the right to 25,000 on the death or remarriage of his mother.

    The deceased's partner was not financially dependent on him but she has nevertheless made a claim on his estate.

    It is unclear whether or not she would be awarded any provision in view of the fact that she was not financially dependent - ( also the fact that the deceased had not contributed to the maintenance of the property or made any interest payments for at least twenty years might be taken into account).

    On death, the deceased had assets of "a few thousand" and a liability for 80,000.

    If we assumed the "few thousand" was say 5000, then the estate still has a liability of 75,000 to be set against the value of the 25% of the property.

    Under these circumstances, I can't see why the OP would not settle his father's liability and either let the partner bring the claim (which she might not win) against what seems to be a net estate of around 50,000,or negotiate an amount in "full and final settlement" with the partner?
    Originally posted by xylophone
    Yep solid points,

    - it is unclear whether the mortgagee ever knew that it was the OP/his mother who was making the interest payments.


    Well she is listed as legal owner, I am not sure how she deals with the lender, but they are clearly accepting payments from her for arrears and interest component per month. But they won't divulge any account details with her because she is not listed on the account. We just get his correspondence from the lender to our property which states all balances, arrears, etc etc.

    The deceased had only one child (the OP)- the OP inherits under the intestacy rules.

    I do have a half sister from my father, but she made it very clear she would not claim anything. She is well off. I have a good relationship with my sister.

    The deceased's partner was not financially dependent on him but she has nevertheless made a claim on his estate.

    It is unclear whether or not she would be awarded any provision in view of the fact that she was not financially dependent - ( also the fact that the deceased had not contributed to the maintenance of the property or made any interest payments for at least twenty years might be taken into account).

    They concede that this claim is weak, so the partner is pursuing a cohabitee clause where living together for more than two years gives you entitlement.

    Me and my mom have various invoices and documentation to show how much we've contributed for the past 20 years, whereas my father and especially not the partner, contributed little to nothing. But nobody knows what a judge would rule in her favour, but she definitely does not have the resources to pursue court, or to keep up these current exchange between our solicitors, and I can't afford court either.

    She may be on some type of fee arrangement with her solicitor where she is banking on the success of her being entitled to the 25% in order to pay her solicitor a sizeable chunk as commission.

    Under these circumstances, I can't see why the OP would not settle his father's liability and either let the partner bring the claim (which she might not win) against what seems to be a net estate of around 50,000,or negotiate an amount in "full and final settlement" with the partner?

    Hmmm... I've thought about offering her some money, but as I am already coughing up 80K, plus all the legal expenses that I've had to spend, and typical bills...

    I don't appreciate that money was taken out of his account following death, for upto 6 weeks, until I closed it and reclaimed the money for his estate.

    I don't believe the net estate would be 50,000 because the debt would cease to exist. He net estate would always be the 25%... I don't think it would be liable anymore, as far as anyone is concerned...

    Let's say I do probate now, and as you say 75K outstanding liability putting the state in negative.

    That has to be paid by someone... or the house goes, so I pay it, and now he has nothing in his estate except for a potential 25% at some point in the future, a life interest in the property based on my mom surviving.

    But then the claimant has 6 months to make a claim against the estate or it gets ignored... but at this point there is nothing in the estate really.

    Then at some future date, the 25% matierialises as the value of the house at the time, and the inheritor collects it.
    • Adams18
    • By Adams18 16th Jun 19, 1:06 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    Which was the "sham" marriage???
    Originally posted by Sea Shell

    When the claimant first asserted her self as the wife of the deceased, I went to the General Register Office to confirm if this was the case using her name I got from the death certificate.

    They said that my father had not been registered as married since he divorced my mother in 1998, however they cannot account for upto 18 months pior to his passing because thats how ong it takes to compile records. Anyways, a kind chap at a local register office did a database check and didn't find the claimants name anywhere.

    She still asserted to be a wife by providing an islamic marriage certificate, that was signed by a muslim imam who was investigated by the Home Office for over 600 sham marriaged, suprise suprise, I feel this was a last ditch attempt by the claimant to prop herself up as a true wife.

    But she neglected to share an original copy for forensic testing. She since dropped the assertion and conceded that I was the rightful heir, but that she would pursue a claim under the 1975 act for dependents.
    • Sea Shell
    • By Sea Shell 16th Jun 19, 1:09 PM
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    Sea Shell
    If you have a half-sister on your Dad's side, she is entitled too.

    To properly administer his estate, you HAVE to account for this. IF she chooses not to receive her inheritance, she will need to sign a deed of variation stating this, and pass her share to you.

    Do not ignore this element!!
    " 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"!!!
    • Adams18
    • By Adams18 16th Jun 19, 1:11 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    If you have a half-sister on your Dad's side, she is entitled too.

    To properly administer his estate, you HAVE to account for this. IF she chooses not to receive her inheritance, she will need to sign a deed of variation stating this, and pass her share to you.

    Do not ignore this element!!
    Originally posted by Sea Shell
    Of course i will not ignore, and many thanks for sharing this, I'll make a note now as I didn't know what would need signing from her.
    • Sea Shell
    • By Sea Shell 16th Jun 19, 1:27 PM
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    Sea Shell
    Also she should be aware that in signing away her inheritance, could result in her losing the ability to claim any means tested benefits. Is she on any, or likely to be in the future?
    " 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 16th Jun 19, 1:30 PM
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    getmore4less
    But my solicitor said that really the 25% has no nominal value right now...

    So do I just use 25% market value as a best guess? Is that how people list shares in property?
    Originally posted by Adams18
    Valuation for IHT is not really directly relevant as there is no IHT from what you have said.

    As it stands the 25% beneficial interest is probably with the ex wife as a life tenant.

    There are significant rules to research on how that works when a remainderman(the dad) dies.
    Some of the consequences are not obvious.
    • Tom99
    • By Tom99 16th Jun 19, 1:44 PM
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    • 3,439 Thanks
    Tom99
    But my solicitor said that really the 25% has no nominal value right now...

    So do I just use 25% market value as a best guess? Is that how people list shares in property?
    Originally posted by Adams18
    Your solicitor is not an expert on valuation matters.
    If you use 25% of market value you are saying your fathers interest is worth 125k.
    But that's not the case since your mother has an effective life interest in that 25% of the property she does not own. You therefore have to apply a discount factor to the 125k which is what I have suggested above.
    • Adams18
    • By Adams18 16th Jun 19, 1:46 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    Also she should be aware that in signing away her inheritance, could result in her losing the ability to claim any means tested benefits. Is she on any, or likely to be in the future?
    Originally posted by Sea Shell

    Who my sister? You mean?
    • Sea Shell
    • By Sea Shell 16th Jun 19, 1:50 PM
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    Sea Shell
    Who my sister? You mean?
    Originally posted by Adams18
    Yes. She would be depriving herself of a potential asset.
    " 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 16th Jun 19, 2:07 PM
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    getmore4less
    Can we assume the partner attempting the claim is not the mother of the 1/2 sister.
    • Adams18
    • By Adams18 16th Jun 19, 2:16 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    Yes. She would be depriving herself of a potential asset.
    Originally posted by Sea Shell

    There was only a few thousand in fathers account, and she told me she has no interest in being involved with the property.

    She earns extremely well, and has her own place in Oxfordshire, worth a million. She is a workaholic.
    Last edited by Adams18; 16-06-2019 at 2:19 PM.
    • Adams18
    • By Adams18 16th Jun 19, 2:17 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    Can we assume the partner attempting the claim is not the mother of the 1/2 sister.
    Originally posted by getmore4less

    Correct assumption, she was from my dads very first marriage. The Partner had no children at all.
    • Adams18
    • By Adams18 16th Jun 19, 2:18 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    Your solicitor is not an expert on valuation matters.
    If you use 25% of market value you are saying your fathers interest is worth 125k.
    But that's not the case since your mother has an effective life interest in that 25% of the property she does not own. You therefore have to apply a discount factor to the 125k which is what I have suggested above.
    Originally posted by Tom99

    Okay, you are right he is not an expert. I'll have to read online about this deferment thing I cannot wrap my head around it, I am just understanding life interests right now...

    Thank you, I'll research.
    • Tom99
    • By Tom99 16th Jun 19, 2:22 PM
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    • 3,439 Thanks
    Tom99
    Many thanks for your thought out response and efforts. I am still not understanding the deferment stance, the losing 5% a year? Why is the case? Isn't it always 25% of the value of the house at time of sale, after a mortgage has been redeemed and IF the mortgage still exists at that time?

    The mortgage/debt is due to mature soon... so If I do probate before that time, and then it gets cleared the probate would reflect a debt that doesnt exist anymore.

    I didn't do a RICS, 6 Months after he passed I brought in an estate agent (foxtons) who valued the house on market value/movements. "Having fully considrerd the local market activity and taken into account all aspects of your property, including its general condition, and the location etc.."
    Originally posted by Adams18
    Your probate application will contain values and debts at the time of death not what the may have become since.
    Re the deferment thing, say my house was worth 125k and I offered to sell it to you with vacant possession. You may well offer me 125k.
    Now say I will sell you my house but I am going to live in it for the rest of my life, you can have vacant possession when I die and I am age 54.
    Would you still offer me 125k? No of course not, given my life expectancy you will not get possession of the house for say 30yrs.
    The further away possession is the less you will pay.
    My example assumes you would pay 5% less for every year you have to wait.
    Hence 125k / (1.05)^30
    It is only an example of how you might go about arriving at a date of death value.
    • getmore4less
    • By getmore4less 16th Jun 19, 3:30 PM
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    • 23,062 Thanks
    getmore4less
    If you have a half-sister on your Dad's side, she is entitled too.

    To properly administer his estate, you HAVE to account for this. IF she chooses not to receive her inheritance, she will need to sign a deed of variation stating this, and pass her share to you.

    Do not ignore this element!!
    Originally posted by Sea Shell
    DOV is one option, a disclaimer is also an option.
    • A Frayed Knot
    • By A Frayed Knot 16th Jun 19, 4:27 PM
    • 2,917 Posts
    • 12,941 Thanks
    A Frayed Knot
    Sorry, haven't read it all, since there is two threads going, but one thought keeps coming to mind.

    Since your father had no input for the last 25 years, then would his "share" not be valued as in 25 years ago?

    You say you and your mother has maintained and paid upkeep, maintenance, mortgage etc etc for the last 25 years, you both would have bank statements and proof of this, so hopefully would account for something.

    Worth a thought.
    Always have 00.00 at the end of your mortgage and one day it will all be 0's
    Mortgage Free 21.12.18
    MF March 2030Re/M Oct 23 Target -Dec 19
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