Offering a Bridging Loan to a relative.

[atticus]

Probate will be required, so that the late husband's personal representatives can sign documents to transfer his interest in the legal title. Delaying applying for probate might hold up a sale.

Your would be wrong to be cynical about such advice.

[Northern Guy]

Probate will be required, so that the late husband's personal representatives can sign documents to transfer his interest in the legal title. Delaying applying for probate might hold up a sale.

Your would be wrong to be cynical about such advice.

Well I am glad to hear that. I don't want to doubt those I have to reply on, but I had to ask as opinions have differed here.

[Northern Guy]

OK, well the plot thickens. My wife has just taken a call from the newly contacted probate lawyer, which has confused and alarmed her, and me. I am seeking written clarification. Meanwhile, this is what she was told....

The probate lawyer thinks we have a big problem. To recap, the property was split from Join Tenants to Tenants in Common (50/50) a decade ago by solicitors writing a Will for my MiL and her now deceased Husband. Both had children from previous marriages but none together. Quite standard advice in that situation, I would have thought?

That Will named three executors/trustees, one of whom is the MiL who has recently lost mental capacity. Probate was not applied for after the death, all was in joint accounts so passed to MiL automatically.

The probate lawyer is saying that we should have got the transfer (I assume to Trustees) done straight after the husband died. We should have registered it with HMRC and been having regular meetings to make sure all was ok. At the first sign of any frailty, we should have then got MiL to 'stand down' as a trustee and nominate someone else in her place. (But it could have been an overnight loss of capacity e.g. stroke, accident etc?)

The probate lawyer thinks that her loss of capacity as a trustee could take a year to resolve before we can sell, and that even then the Council if seeking to claim care home fees against the proceeds could see what we now do as a 'scam' - her word not mine - because we left it so late.

I'm at a loss to understand how a trustee losing mental capacity is such a problem. I carried out probate in place of my mother who was named executor but had lost mental capacity, not such a big deal. I am also at a loss to see how any part of this, with the property divided a decade ago, could ever be seen as a scam or why transferring years later against a 10 year old Will could be seen in a bad light?

[Pezza54]

I think I can see what has gone wrong
You stated there wasn't much to do when the father died, probate wasn't applied for, as everything was in joint names with his wife The executors should have applied for probate
Unfortunately, as the ownership of the property was changed from joint tenants to tenants in common (so each spouse could leave their share to their children) the executors, after obtaining probate, should have transferred the father's share of the property to his children. This should have involved completing and sending a transfer form with the appropriate fee to the Land Registry. A separate form should also have been sent stating the new owners and their percentage shares

You state MIL has now lost mental capacity, after signing LPA forms. Has your wife applied for LPA to the CoP?
When she is appointed she will have the authority to sell MIL's share of the property
The transfer of FIL's share now needs to happen as above,

A year sounds pessimistic. However delays at the Land Registry and Court of Protection are increasing

[Northern Guy]

Should the late husband's share have been transferred to his children, or to his trustees (only one of which was his child)? Excuse my ignorance of conveyancing, but given no time limit on applying for probate, why is timing of the transfer so important, provided it does happen?

The LPA over the MiL is now active, so we can sell her share of the house from what you say. But what is the situation over the late husband's share? You mention the Court of Protection, I know this organisation well having after done probate for my own late father years ago, his wife being incapable, I then had to apply to the Court of Protection to run her finances thereafter. All without a solicitor, perhaps I was the one who had lost my sanity.

Anyway, are you saying the COP will be needed to deal with the MiL no longer being able to act as trustee now, hence the mega delays? I know how slow they are. And if so, that the active LPA doesn't allow the attorney to replace her?

[Pezza54]

You need to read FIL's will to see if the half share of the property should be transferred to his children or trust His children might be old enough to become joint owners

Delay in transferring the property share can cause problems and delays when it comes to selling the property. Executors can pass away, move abroad, lose mental capacity. Your wife should renounce her mother's executor duties and apply for probate. This can take several months

The CoP has nothing to do with FIL, just MIL Your wife now has the authority to deal with her finances, if she definitely registered the form with CoP

[Northern Guy]

The FiL's Will gives the house to the 'Trustees to hold on trust for sale but with power to postpone the sale and in accordance with the following directions:-' (thence creates a life interest for his Wife to remain there).

I note you say my wife could renounce her Mother's executor duties, and apply alone. There's still the late FiL's daughter who is a named executor/trustee, who lives at some distance and when asked 5 years ago was unwilling to renounce her role, but also unwilling to apply for probate alone if wife & MiL renounced probate. This was the reason our plans to apply for probate 5 years ago, as a precaution rather than necessity (we then believed), did not progress any further. I accept your advice on applying early, we had not considered these future risks at the time. I take it that my wife could renounce probate for herself, her Mother, and provided the distant daughter did too, all could be handled by the solicitor? The reason is that we have a lot on our plate right now surrounding the care of the declining MiL.

By asking if my wife has registered her LPA with the COP, are you asking if it is active? It is a working document, with online account to generate access codes, which have been accepted by financial institutions, if that is what you mean?

If the above assumptions are correct, this is essentially just probate, not a COP application. So why is the probate lawyer talking of delays approaching a year? And how could any Council seeking to recoup fees see a delayed/complex conveyance as some kind of avoidance 'scam' when documents lodged with the Land Registry a decade ago explained the split to Tenants in Common for a blended family?

[Pezza54]

If all executors renounce their duties, a main beneficiary should appoint a solicitor to apply to court to become an administrator of the deceased's estate It is therefore not just probate and will take longer. The solicitor should also be appointed trustee. Your wife should ask for the solicitor to provide a fee quote, it all sounds expensive
If the LPA was registered after 17 July 2020 the donor and attorney will have their own unique activation key. So it sounds like the LPA is up and running

[Northern Guy]

Yes I assumed a trustee would be required too, another reason I wanted to keep it all with one law firm who would also conveyance the eventual sale. The figure of £2k was mentioned by the probate lawyer, does that sound likely? And how long would you expect this to take, before we could market the house for sale in good faith with probate and any transfer in progress with a foreseeable end?

Yes the LPA is post 2020 and up & running thanks.

[atticus]

The main beneficiary can apply to become administrator herself.

[Northern Guy]

The main beneficiary can apply to become administrator herself.

The Life Interest beneficiary is the MiL who has lost capacity. The ultimate beneficiary of the FiL's half share, once the trust ends, is daughter, the distant individual not wanting to do this alone. Hence wanting the Law firm to take this on.

[Pezza54]

The price from the probate lawyer, £2k, sounds reasonable for probate application, administering the estate and Land Registry forms
Ask the lawyer to provide a list of the work included in the £2k

[Northern Guy]

I asked the cost of another, random solicitor, who replied as follows with more detail, coming to £2,300 before probate fees & VAT. How do you feel about these charges? And should the executors be Renouncing or would Power Reserved be safer/wiser, just in case we were unhappy with how things went?

• To extract the Grant of Representation £950 plus VAT + probate fees
• Deed(s) of Renunciation for executors who do not want to take out the Grant £300 + VAT
• HMRC Trust Registration Service (compulsory registration of Trust) £350 + VAT
• Transfer of deceased’s share in property to Trustees £350 + VAT
• Deed of Appointment of new Trustee(s) £350 + VAT

Also, in terms of these costs, who pays? The MiL (via her attorney) for all, or would they be split between her and her late Husband's Estate, i.e. the whole lot come from the final proceeds of sale if the same solicitor also sells her house after obtaining probate?

[Pezza54]

"extract the Grant of Representation", where is the cost of the solicitor administering the estate? Check with the solicitor, some solicitors charge a percentage of the value of the estate
Renounce or reserve doesn't matter. Clearly MIL can't reserve
Additional costs are being incurred because the executors failed to apply for probate and transfer the share of the property. As the executors are the beneficiaries they should come to an agreement about payment of the solicitor's fees

[Northern Guy]

In my enquiry, I told the solicitors that there was no administration to perform, as all monies had passed from husband to wife via joint accounts when he died 6 years ago. So this will be just obtaining the grant & creating the trust etc so we can sell.

Do you feel the costs are reasonable?

Is it acceptable/legally allowable for the cost to come from the final proceeds, if all executors agree? From what I know of the distant daughter of the late husband, she will not be willing to share these kind of costs other than if taken from an inheritance, which she won't get at this stage.