Advice Regarding Estate Funds and Minors
Discussion
Hi Folks
Looking for a little advice please before I go down the route of paid advice because I can’t seem to find a straight answer to this exact scenario anywhere.
The Context:
My brother passed away around 3 years ago leaving behind two children (now nearly 14 and 16 respectively) and no will. He was unmarried and separated and living away from the mother of his two children, with whom he had an amicable relationship post-separation. Thus his surviving children are solely entitled to his estate.
His partner and I have been granted joint letters of administration and this has allowed us to claim his life insurance policy, the funds of which have been received by me and are sat in an instant access account that I set up purely for temporarily housing this sum of money away from my own finances.
Now, it is my understanding that debts in my brother’s name need to be paid from the estate funds, but what I can’t seem to find a straight answer to is mortgage debt with a surviving party.
He was a joint tenant with the mother of his children on the mortgage for the property that they are still occupying, even though he wasn’t living there. I understand that this now becomes her mortgage solely, what I can’t find an answer to is whether or not it is legal or permissible for us to pay off any (50% being ‘his share’?) or all of the mortgage using the proceeds of the life insurance. I have contacted the mortgage provided who have simply said they’ll happily take money off of anyone to pay off the mortgage, but can’t advise on whether or not we are legally allowed to use the estate funds for this.
I know for a fact that the whole reason they each took out life insurance policies was to ensure that should either of them die, there be money to pay off the mortgage and keep the children’s future secure from that standpoint. But having left no will, and there being no specified beneficiary in the life insurance policy, I don’t know how that plays with the fact that the children are legally entitled to 100% of the estate funds.
Is keeping a roof over their heads by discharging the mortgage appropriate use of the estate funds? I fail to see how it can be argued that that isn’t in their interests. However I also appreciate that there is a ‘common sense’ sense of right and a legal sense of right.
Both myself, and the mother of the children, as administrators of the estate would like to go down this route, with the remaining funds divided between the two children to be put into accounts for when they are 18 and can legally own the proceeds.
The other thing I’m unsure about is to whether those funds are legally allowed to be accessed - with the consent of myself and the childrens’ mother - on demand in order to finance things between now and them turning 18, for example expensive school trips, clothing, yada-yada…
I would appreciate any kind of steer or pointers as to who to turn to for advice if we need to engage paid financial advice.
Many thanks
Looking for a little advice please before I go down the route of paid advice because I can’t seem to find a straight answer to this exact scenario anywhere.
The Context:
My brother passed away around 3 years ago leaving behind two children (now nearly 14 and 16 respectively) and no will. He was unmarried and separated and living away from the mother of his two children, with whom he had an amicable relationship post-separation. Thus his surviving children are solely entitled to his estate.
His partner and I have been granted joint letters of administration and this has allowed us to claim his life insurance policy, the funds of which have been received by me and are sat in an instant access account that I set up purely for temporarily housing this sum of money away from my own finances.
Now, it is my understanding that debts in my brother’s name need to be paid from the estate funds, but what I can’t seem to find a straight answer to is mortgage debt with a surviving party.
He was a joint tenant with the mother of his children on the mortgage for the property that they are still occupying, even though he wasn’t living there. I understand that this now becomes her mortgage solely, what I can’t find an answer to is whether or not it is legal or permissible for us to pay off any (50% being ‘his share’?) or all of the mortgage using the proceeds of the life insurance. I have contacted the mortgage provided who have simply said they’ll happily take money off of anyone to pay off the mortgage, but can’t advise on whether or not we are legally allowed to use the estate funds for this.
I know for a fact that the whole reason they each took out life insurance policies was to ensure that should either of them die, there be money to pay off the mortgage and keep the children’s future secure from that standpoint. But having left no will, and there being no specified beneficiary in the life insurance policy, I don’t know how that plays with the fact that the children are legally entitled to 100% of the estate funds.
Is keeping a roof over their heads by discharging the mortgage appropriate use of the estate funds? I fail to see how it can be argued that that isn’t in their interests. However I also appreciate that there is a ‘common sense’ sense of right and a legal sense of right.
Both myself, and the mother of the children, as administrators of the estate would like to go down this route, with the remaining funds divided between the two children to be put into accounts for when they are 18 and can legally own the proceeds.
The other thing I’m unsure about is to whether those funds are legally allowed to be accessed - with the consent of myself and the childrens’ mother - on demand in order to finance things between now and them turning 18, for example expensive school trips, clothing, yada-yada…
I would appreciate any kind of steer or pointers as to who to turn to for advice if we need to engage paid financial advice.
Many thanks
Even if you were confident in these current questions I think you do need professional advice here in particular because the children are, well, children.
Even something as 'basic' as paying off the mortgage involves a decision as to whether the estate is then buying that share for the children to be held in trust for them rather than just paying it off and it all remaining in their mum's name (i suspect the (edit) former, but thne I am not sure the estate owes that debt or rather the money goes to the children and then their trustee/s choose to pay off teh mortgage, but don't have to?).
Also, does the land title specify joint tenancy rather tahn tenancy in common?
There are lots of things here, let alone for the future for remaionder of the money.
You and their mum may well be wearing different hat, need or want to get more hats - eg mum as mum, executor, gain trustee ship or not etc.
Sorry rambled, no expertise here at all but there really is a whole lot of potential knotted problens here that need cutting through by a professional, if only at least for an initial view for you then to consider what / how much further advice you get from them or others.
Even something as 'basic' as paying off the mortgage involves a decision as to whether the estate is then buying that share for the children to be held in trust for them rather than just paying it off and it all remaining in their mum's name (i suspect the (edit) former, but thne I am not sure the estate owes that debt or rather the money goes to the children and then their trustee/s choose to pay off teh mortgage, but don't have to?).
Also, does the land title specify joint tenancy rather tahn tenancy in common?
There are lots of things here, let alone for the future for remaionder of the money.
You and their mum may well be wearing different hat, need or want to get more hats - eg mum as mum, executor, gain trustee ship or not etc.
Sorry rambled, no expertise here at all but there really is a whole lot of potential knotted problens here that need cutting through by a professional, if only at least for an initial view for you then to consider what / how much further advice you get from them or others.
Edited by pork911 on Friday 17th June 13:56
Gassing Station | Finance | Top of Page | What's New | My Stuff