legal advice - re will and estate

[sparkyhx]

NOT SURE IF THIS IS IN THE RIGHT PLACE

My step dad has died leaving everything to myself and sister in the will.

Myself and my sister are joint executors as well as beneficiaries.

Some years ago my step dad set up an interest free loan for my sister some for 60k so she could buy a house. There is a charge on the house in my step dads name. The 'loan agreement' does not say what happens in the event of his death only that it remains interest free while she keeps up payments.

She has been making regular payments every month for the past 8 years or so.

There is nothing in the will about this either.


My assumption is that the outstanding loan amount forms part of the estate and as such technically part of the 50/50 split. Is this true? or does the debt to him die with him?

I'm not going to go into detail, but basically there is minimal amount of other assets, I have no intention of making my sister pay the outstanding balance of the loan (assuming the loan does form part of the estate).

However as a consequence, I am proposing the remainder of the assets go to the grand kids (2x mine and 2x my sisters) and me. With my sister benefiting from not paying off the loan anymore. this position obviously predicates on the outstanding loan amount being part of the estate - if its not, then obviously I/we have to split the remaining (very little) assets between myself and my sister.


So to summarise
- does the loan die with my step dad or is it part of his assets?
- assuming above I don't think its unreasonable for me to request the remainder of the estate based on
- she doesn't have to pay back the loan saving £xxx per month
- the outstanding balance on the loan is 4x what is left in the remainder of the estate
- I am in effect funding her kids getting some of the estate

Any advice? - i've tried a search on google but only find a definitive answer based in US (outstanding loan is part of the estate), I can't seem to find anything relating to UK law.


sorry about the long post

Cheers

[sparkyhx]

Thanks for the replies. So the loan is part of the estate.

I'm in a difficult position.

My sister is NOT in a position to reply the loan. She can barely afford the payments as it is/was. There is NO WAY I am going to get her to pay it back to the estate and then split 50/50. Therefore financially she will be £200 a month better off simply due to not paying it back.

But I still feel guilty saying I want to take the remaining Liquid assets, cos at the end of the day I don't need it as much as her.

The back story to this is that his assets originally came from my mums estate. He's pretty much pissed £100k up against a wall in a pub, and paid off credit card bill of my sister over the past 8 years. So I feel that at the end of the day I should see something from mum, and that my sister has already seen far more than her 'fair share'...................but I still doesn't stop me feeling guilty.

Ho hum, I suppose at the end of the day cancelling the debt is being more than generous.

[sparkyhx]

sugerbear said:

- You get your sister to re-mortgage over a longer term (assuming that the loan will be halved) so she can afford the repayments
- You agree to wipe the loan on condition that you take a legal charge over a % of the property that represents the value of the loan/asset to you which when the property is sold will revert to you.

she can't afford to buy out now really.

e.g. she still owes 40k - rest of estate is 10k - so in theory she should repay 40k and then get back 25k. so she would be 15k further in debt than she is now.

good point about the charge for a later date - hadn't thought of that.
I had thought about her paying the existing loan to me until she has paid the £15k difference, but I couldn't do that and take the cash as well, I'd sooner write it off.

[sparkyhx]

cheers everyone. the amounts are closer to the example I gave, so half the estate doesn't pay off the remaining loan, she would be left having to get another laon/remortgage albeit less the fact she is no longer paying the original amount.

my own generosity at the end of the day is down to me. I now know I can force the issue of 50/50 or I can write off the debt and take the liquid assets. And then there are the points in between the two extremes and also the various 50/50 options - remortgage, personal loan, charge on sale etc.

But at least I have cleared up whether writing off the loan is 'generous' or what would have happened anyway.

Edited by sparkyhx on Tuesday 21st April 14:19

[sparkyhx]

walm said:

Devil2575 said:

Now admittedly perhaps the step dad didn't really understand that the debt was part of the estate and really just expected £5k to go to each of his kids.
That is only something the OP can tell.

I strongly suspect this, cos at various times he has said a number of things about his will which have subsequently proved to be completely wrong. It is the worst will I have come across. It's on one page and states me and sister beneficiaries thats it. At various time he has said, grand kids get x,y, my wife was executor at one stage (not) - his will said the debt dies with him (not), the will says where he wants to be buried (he's from Isle of Man) nothing, nada, zip, diddly squat. He'd had Cancer for the past 6 years the will pre dates that so he's had plenty of time. I have found a solicitors letter warning him the mess he is leaving with the will and the loan. He had a loan agreement drawn up - nothing about his death.

he's basically left a bit of a mess.

Whilst I'm sympathetic to the 'debt dies with me' statement he has allegedly said, I am faced with getting £5k out of my mums estate of £180k. Which was the house he never paid for.

My sister got the loan, about 10k of credit card bills paid for her (spending money she didn't have on Handbags and Pandora charms) taken on holiday and other stuff.

The rest (circa £200,000 including he pension & loan replayments) has been gone thru in 8 years. his fixed monthly outgoings were £350 per month(rent, bills). He was spending 21k a year on food, clothing, annual trips to IOM for the TT, and beer (mainly beer - no fecking wonder the landlady was upset when he died). TBH if he had lived another year he would have had nothing left except his pension.

I don't want to sound bitter, but this is also driving some of my feelings. Thats why I wanted the basic facts at first, re the loan, not muddied with all the other emotional crap.

I'm trying to work out whether my feelings are taking over from facts.



and breath

[sparkyhx]

TooMany2cvs said:

sparkyhx said:

It seems they are.

Your mother died a while ago. She left her estate to her husband - your step-father. End of.
You step-father has now died. He is leaving his estate to your sister and you, jointly. End of.

mum and stepdad were never married - house was hers before they met. they jointly borrowed on the house (not much)but the deeds were altered to be tenants in common rather than Joint Tenants. - so the deeper you delve the more complicated it gets, but the basic principle still stands.

[sparkyhx]

TooMany2cvs said:

sparkyhx said:

mum and stepdad were never married - house was hers before they met. they jointly borrowed on the house (not much)but the deeds were altered to be tenants in common rather than Joint Tenants. - so the deeper you delve the more complicated it gets, but the basic principle still stands.

Their marital status, and the history of ownership of the house, is irrelevant. She left him all her estate. It then became entirely his, to do with as he wished.

Actually her will left her entire estate to me and my sister. All 3k before funeral expenses. If you look up "Tenants in Common" the title automatically passes to the other person and does NOT form part of the estate. Its fairly standard practice to avoid death duties on one persons death.

I was also executor of her will so this is why I know all this. had it been Joint Tenants then my sister and I would have had her half of the property.

Edited by sparkyhx on Tuesday 21st April 19:51

[sparkyhx]

walm said:

Durzel said:

Instead it's all about leverage and negotiation, playing with money that didn't exist for them until a sad event occurred.

It's a zero-sum game (not a great phrase here but bear with me)...
So if the OP wants to go all "it's sad let's not negotiate or argue about it" he is essentially writing his sister a £15k cheque.
His sister just won the negotiation big time.

The money doesn't just disappear - it has given his sister a big boost to income by adding £2.5k per annum.

Just because you didn't have the money yesterday doesn't mean you should happily give it away without a thought the next day when you do have it. It's YOUR MONEY.

And frankly, it sounds like his sister has been given far more help in the past than the OP (£10k CC bill paid off and a £60k INTEREST FREE LOAN).

Sure I would happily write off £15k of bonus money to my feckless sister because I am not on the breadline but that doesn't stop the simple fact being that she has taken something from the OP and both of them should be aware of that fact. Hence the OP's original queston, I guess.

pretty much nailed it there.

[sparkyhx]

TooMany2cvs said:

sparkyhx said:

Actually her will left her entire estate to me and my sister. All 3k before funeral expenses. If you look up "Tenants in Common" the title automatically passes to the other person and does NOT form part of the estate. Its fairly standard practice to avoid death duties on one persons death.

I was also executor of her will so this is why I know all this. had it been Joint Tenants then my sister and I would have had her half of the property.

Yes, you're right there.

But it still doesn't affect the more general point. The aftermath of your mother's death was that the house was entirely owned by your step-father, to do with as he wished. And, if what he wished was to piss it up the wall, that was his decision.

If he spent every penny I would be less bothered, yes I would be pissed off that he's wasted it all, but whats bothering me the most is the mess he's left.

The fact is, there is something left. But the liquid assets are far less than he was telling us and this leaves me in the situation where for me and my family to get anything I feel like I have to shaft my sister to a certain extent. Which is plainly not the case from a legal point of view.

At the end of the day irrespective of the legal rights and wrongs my heart is telling me I can't do what my head is telling me to do.

Edited by sparkyhx on Tuesday 21st April 20:58