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Original poster

Inheriting part of a property

37 replies

Linnet · 19/06/2022 23:21

Fil has left his half of a property to dh and his brother. Fil’s wife (2nd marriage) has a life interest.

Does anyone know if dh and his brothers names get put on the deeds now or will that only happen when the wife dies?

The property also has a substantial mortgage on it and is rented out to tenants at the moment. Will the rent being paid by the tenants continue to pay down the mortgage (we’re assuming that at least part of the rent is used for this purpose) or will dh and his brother be expected to pay towards the mortgage at this time?

OP posts:
Original poster
Linnet · 20/06/2022 10:56

Bump

OP posts:
Collaborate · 20/06/2022 15:23

Something needs to go on at the land registry - perhaps a restriction or notice - but I'm no conveyancer.

The income is die to the life tenant, so she is entitled to do with it what she wants. She should get credit for any of the mortgage debt that is paid off but it really depends on what is in the will.

Newestname002 · 20/06/2022 21:29

Collaborate · 20/06/2022 15:23

Something needs to go on at the land registry - perhaps a restriction or notice - but I'm no conveyancer.

The income is die to the life tenant, so she is entitled to do with it what she wants. She should get credit for any of the mortgage debt that is paid off but it really depends on what is in the will.

Probably best speak with a solicitor but a Deed/Declaration of Trust might be a good idea, setting out exactly what needs to happen with FIL's share of the property after he dies. That Deed would, IIRC, would need to be signed by all interested parties. Whilst having a Will is a good thing they're easier to change than Deed/Declaration of Trust. 🌹

Original poster
Linnet · 20/06/2022 22:12

Newestname002 · 20/06/2022 21:29

Probably best speak with a solicitor but a Deed/Declaration of Trust might be a good idea, setting out exactly what needs to happen with FIL's share of the property after he dies. That Deed would, IIRC, would need to be signed by all interested parties. Whilst having a Will is a good thing they're easier to change than Deed/Declaration of Trust. 🌹

Show quote history

FIL has already died. They’ve had a letter from a solicitor who is dealing with the estate. In his Will (which we haven’t seen yet and not sure if we’ll get to) it says that dh and his brother get his half share of the property between them with the wife having a life interest until she dies. They were told previously that once she dies the property will then go to them. But surely she could leave her half to someone else in her Will?

We wondered if their names would go on the deeds now or if that will happen after the wife dies as there is a substantial mortgage on the property which FILs half share is responsible for half of. There is a worry that they’ll be expected to pay something towards this mortgage at this time, or will that not kick in until she dies and they inherit the property?

OP posts:
CharlotteSt · 20/06/2022 22:30

But surely she could leave her half to someone else in her Will?

No she couldn't because she's only been left a life interest (i.e. for the rest of her life), not actually half the property.

CharlotteSt · 20/06/2022 22:32

There is a worry that they’ll be expected to pay something towards this mortgage at this time, or will that not kick in until she dies and they inherit the property?

Did he not have life insurance?

LongPath · 20/06/2022 22:37

CharlotteSt · 20/06/2022 22:30

But surely she could leave her half to someone else in her Will?

No she couldn't because she's only been left a life interest (i.e. for the rest of her life), not actually half the property.

It sounds like she owned the property jointly with FIL, so she still owns her half plus a life interest in the other half. If thats the case, yes she can leave her half as she chooses.

It would be unusual for there not to be life insirance to deal with the mortgage?

titchy · 20/06/2022 22:38

CharlotteSt · 20/06/2022 22:30

But surely she could leave her half to someone else in her Will?

No she couldn't because she's only been left a life interest (i.e. for the rest of her life), not actually half the property.

She may currently own half though if they owned as tenants in common, with the life interest on the other half.

There must be life insurance though to pay the mortgage surely?

Original poster
Linnet · 20/06/2022 22:42

CharlotteSt · 20/06/2022 22:30

But surely she could leave her half to someone else in her Will?

No she couldn't because she's only been left a life interest (i.e. for the rest of her life), not actually half the property.

But the wife owns 50% of the property, FIL owned the other 50% which he has left to his sons. Does this not mean that she owns half and can do what she wants with it?

Having the life interest in FILs half means she can use the whole property until she dies? But couldn’t she potentially leave her 50% to someone else in her Will?

OP posts:
LongPath · 20/06/2022 22:45

Linnet · 20/06/2022 22:42

But the wife owns 50% of the property, FIL owned the other 50% which he has left to his sons. Does this not mean that she owns half and can do what she wants with it?

Having the life interest in FILs half means she can use the whole property until she dies? But couldn’t she potentially leave her 50% to someone else in her Will?

Show quote history

Yes she could

Original poster
Linnet · 20/06/2022 22:47

I typed too slowly. Yes they were tenants in common that is how FIL could leave his half to his sons.

We don’t know if there was life insurance, I would have thought there would be but I’m guessing not since the solicitors letter dh has been sent says there is a substantial outstanding mortgage on the property.

OP posts:
LittleOwl153 · 20/06/2022 22:54

So dh and his brother are only getting fils half of the house between them? So 1/4 of the house each? Who owns the other half?

If his partner owns the other half there is presumably no legal requirement for her to pass this on - although I assume this was fil's expecation.

In terms of the rent unless stated otherwise then this rent would be split in proportion of the ownership of the property.

It's interesting that there is a mortgage on the property. Is there enough in FILs estate to pay off the mortgage? The debt is his so the mortgage company will seek to have the debt paid from the estate assuming it is FILs name on the mortgage. The mortgage company will not simply transfer the mortgage to those who inherit the property as it might not be financially viable to them. They will need to apply for their own mortgage on the property if required. The mortgage company will likely seek for the property to be sold to pay the debt if there is no other easy option. (Which will override anyone's lifetime interest.) Its all about what else is left in FILs estate. Its likely to take some unpicking!

LittleOwl153 · 20/06/2022 23:05

To stop you worrying - assuming you are in the UK as I know things differ elsewhere - You cannot inhert a debt. That debt will need to be settled before the estate can be distributed. The debt is paid from the estate - if need be through the sale of the property.

Whether this means that they actually inherit anything at all will depend on what the mortgage value is, who's name is on the mortgage (if 2nd wife's name is on mortgage she will be liable independently of whether it was to pay her part or not if there is no legal paperwork to back this up). What's left in the rest of the estate etc.

Original poster
Linnet · 20/06/2022 23:21

So dh and his brother are only getting fils half of the house between them? So 1/4 of the house each? Who owns the other half? The wife

If his partner owns the other half there is presumably no legal requirement for her to pass this on - although I assume this was fil's expecation.
We haven’t seen the Will but we’re thinking if she owns half of the house she can leave her half to whoever she wants when she dies. So if she lives another 30 years, which is possible as she is younger than FIL, she could leave her half to whoever she wants and then dh and his brother will own half a house with someone else?

It's interesting that there is a mortgage on the property. Is there enough in FILs estate to pay off the mortgage? The debt is his so the mortgage company will seek to have the debt paid from the estate assuming it is FILs name on the mortgage. The mortgage company will not simply transfer the mortgage to those who inherit the property as it might not be financially viable to them. They will need to apply for their own mortgage on the property if required. The mortgage company will likely seek for the property to be sold to pay the debt if there is no other easy option. (Which will override anyone's lifetime interest.) Its all about what else is left in FILs estate. Its likely to take some unpicking!

Dh and his brother would not be able to get a mortgage for this property. Dh wouldn’t qualify and his brother is unable to work and lives off benefits so definitely wouldn’t get a mortgage and we’re talking about an expensive property in the heart of London. We don’t know how much the outstanding mortgage is. It might be better to sell the property pay off the mortgage and split whatever is leftover between them, if there is anything leftover.

OP posts:
LittleOwl153 · 20/06/2022 23:33

Dh wouldn’t qualify and his brother is unable to work and lives off benefits so definitely wouldn’t get a mortgage

So the mortgage would need to be settled before the estate was distributed.

One thing dh's bro might want to do is take some advice about his share as he will need to be able to liquidise anything he inherits as his benefits will be stopped if his share in a property he does not live in is worth more than ~ £16k (depends on which benefits he's on but there a ceiling on all but PIP I think).

Sounds messy OP I hope it gets resolved without too much hassle.

PizzaPizza56 · 20/06/2022 23:42

The solicitor will speak to dh as a beneficiary of the estate. Get him to ring and ask all the questions you have. No one can advise you on the terms of the Will without seeing the exact wording so solicitor is the right person to ask to clarify. Good job that a solicitor has been instructed so you have an independent person who has to speak to dh about it!

CharlotteSt · 21/06/2022 08:21

Sorry I've obviously misunderstood the premise.

Sniffypete · 21/06/2022 08:30

You need proper legal advice. Contact a solicitor, as it may be that the wife needs to buy you out, as if there is mortgage that can't be paid by you then she will have to buy you out or give up her life interest on the property and it be sold.

Also, this inheritance may mean that your brother with lose his benefits.

whowhatwerewhy · 21/06/2022 08:39

Hi op you need to speak to the solicitor.
My sister and I own 1/4 each of my DM home. She's responsible for the bills and upkeep of the house . She can live there for as long as she wants and leave her half to whoever she's wants . Once she dies I can claim my 1/4 of the value of the house .

IsDaveThere · 21/06/2022 14:21

It might be better to sell the property pay off the mortgage and split whatever is leftover between them, if there is anything leftover.

They can't, they don't own the other half of it plus FIL's wife has a life interest on the part that they do own. Your DH needs to speak to a solicitor.

Original poster
Linnet · 21/06/2022 14:47

IsDaveThere · 21/06/2022 14:21

It might be better to sell the property pay off the mortgage and split whatever is leftover between them, if there is anything leftover.

They can't, they don't own the other half of it plus FIL's wife has a life interest on the part that they do own. Your DH needs to speak to a solicitor.

But if there isn't enough in the estate to pay off the mortgage and dh can't get a mortgage for the property surely it could be sold if they all agree?

OP posts:
LongPath · 21/06/2022 14:49

So if it was a joint and several mortgage does that mean wife takes on the mortgage while sons own their share without debt? Obviously it can't be sold without repaying the debt but sons have no obligation to meet payments in the meantime?

If so wouldn't it be in the best interests of the wife to sell now rather than pay a mortgage on a property she only half owns?

It sounds like it's an investment property. Would they usually have life insurance to cover the mortgage?

titchy · 21/06/2022 14:52

But whose name is on the mortgage and how much is owed? Late FIL and wife joint mortgage, late FIL on own or wife on own? That's fairly crucial id have thought. It could be that if the mortgage company is owed purely by FIL, and secured only half a house, then potentially the estate could be bankrupt.

LongPath · 21/06/2022 14:55

I don't think DH needs a mortgage. Either the debt was in FIL's name I
which case the bank will require it to be sold, although if it's the wife's home, they may be prepared to wait.

Or, if it's in joint names, the debt will become a sole mortgage in wife's name, which she can either continue to pay or sell the property to repay.

However, she still retains the life interest in the capital, it wouldn't be a way for DH and BIL to get their inheritance sooner.

LongPath · 21/06/2022 14:56

Basically you need to take legal advice, but DH won't get his inheritance until she dies, whatever happens.