Bad Will scenario, help please?

[Welsh wizard]

Hi folks,
It would be valuable if any of you guys may offer an insight on my and my siblings current situation after the passing of our father a few years

Basically my Dad, a successful businessman, divorced my mum years ago when I was in my early 20s.Their marriage had been pretty dysfunctional for a long time so it wasn't surprising.

My Dad remarried a few years later to a subordinate from the establishment he worked for, also a divorcee.

After originally having some animous towards her for the divorce, perhaps misplaced, over the ensuing years we got to know her personality.

To say she is materialistic, shallow, and a goldigger is an understatement. My Dad was the exact opposite. He was intellectual and thick skinned she a bit of a dullard and seemed to only be interested in appearances and acquisition of new items.

My Dad was coerced by her to acquiesce to this over the years, antithetical to his upbringing. We could see the change in him and there was tension but mostly civility between us and her for him. She seemed controlling with him. Him having to be home at certain times etc. All of us children concurred on her personality. He brought the majority of wealth to the relationship.

Anyway my Dad tragically died a few years ago in bad circumstances. He was unconscious for a while and passed away some days later. She was not at the hospital at the time.

My Dad left a TIC Will on the house leaving her a life interest and £multiple k in money, half his large pension. The Will was generic and not personalised at all. The beneficiaries were her kids and us equally on the house. We believe it’s possible she coerced him into a will that didn't immediately allow any estate to the beneficiaries if he passed first. She didn't offer a penny of his capital even as a token gesture. She lives in a nice house in with no money worries. She also refused an executor access to the will file for unknown perhaps insidious reasons.

One of my siblings does not need any advance on the inheritance. I'm currently disabled living on ESA and on my uppers and my other sibling wants to move out of his flat. We cannot do anything currently. I may pre decease her as I have health issues. I know it was my Dad's Will but do you think she should at least talk to us about the situation? Maybe he was coerced.

We have thought of an equity release scheme but knowing her personality with money she may be obdurate and make things worse by changing her will. Her daughters seem to be in her mold. We all got on really closely with my dad and were devastated at his early passing. I had a deep depression. I am really struggling financially and this constant worrying about money and her is affecting my MH badly.

Is there a loan one can take out against being a beneficiary in will?


What can we do?

Thank you kindly in advance.

[Peridot]

Hi Welsh Wizard,

I am sorry to hear of your situation. It can't be easy for you or your siblings. With so many second family situations occurring now it is all too common for these sorts of situations to arise.

Unfortunately there is little you can do. I assume that the Will is clear as to when/if your step mother had to leave the property for example if she re-married or chose to leave. It would be necessary to see the wording of the Will to confirm the circumstances this right to reside in your father's share should end. It is quite common for this situation to arise where co-owners sever their tenancy, allowing the individual in a couple to 'Will' their share to whoever they wish but to also protect the surviving co-owner ensuring they have a home until such event happens as dictated in the Will.

How is the property owned now? Is it co-owners between her and the beneficiaries under your father's will?

Ultimately you will receive your share of your father's part of the property but it will not be until one of the situations stated in the Will occurs. I'm afraid it is highly unlikely you could secure a loan against your 'share' as there is no certain date when you are likely to receive your share.

There is also no guarantee the property will retain it's value, so I suspect any lender would have difficulties agreeing a loan even if they thought of a novel way to do so.

It appears from what you say that your father's share is to be divided between a number of children and stepchildren too. Is that correct or is his share left to you and your siblings and your step mother's share left to her children?

In addition, however moral or not you feel your step mother's behaviour is you can't force her to give you any of her inheritance, irrespective this is your father's Will. Would she consider loaning you some money or buying out your share of the property? Just trying to think a little outside the box here. Of course if she purchased your share of the legacy from you then it would be on the value the date the transaction took place. You would also not be entitled to any share in a legacy once the property is eventually sold. It may be worth you discussing with an independent financial adviser although I wouldn't be too hopeful there is any loan type facility available to you I'm afraid.

[Welsh wizard]

Hi Welsh Wizard,

I am sorry to hear of your situation. It can't be easy for you or your siblings. With so many second family situations occurring now it is all too common for these sorts of situations to arise.

Unfortunately there is little you can do. I assume that the Will is clear as to when/if your step mother had to leave the property for example if she re-married or chose to leave. It would be necessary to see the wording of the Will to confirm the circumstances this right to reside in your father's share should end. It is quite common for this situation to arise where co-owners sever their tenancy, allowing the individual in a couple to 'Will' their share to whoever they wish but to also protect the surviving co-owner ensuring they have a home until such event happens as dictated in the Will.

How is the property owned now? Is it co-owners between her and the beneficiaries under your father's will?

Ultimately you will receive your share of your father's part of the property but it will not be until one of the situations stated in the Will occurs. I'm afraid it is highly unlikely you could secure a loan against your 'share' as there is no certain date when you are likely to receive your share.

There is also no guarantee the property will retain it's value, so I suspect any lender would have difficulties agreeing a loan even if they thought of a novel way to do so.

It appears from what you say that your father's share is to be divided between a number of children and stepchildren too. Is that correct or is his share left to you and your siblings and your step mother's share left to her children?

In addition, however moral or not you feel your step mother's behaviour is you can't force her to give you any of her inheritance, irrespective this is your father's Will. Would she consider loaning you some money or buying out your share of the property? Just trying to think a little outside the box here. Of course if she purchased your share of the legacy from you then it would be on the value the date the transaction took place. You would also not be entitled to any share in a legacy once the property is eventually sold. It may be worth you discussing with an independent financial adviser although I wouldn't be too hopeful there is any loan type facility available to you I'm afraid.

Hi Peridot,

Thanks so much for the comprehensive reply and suggestions that you detailed.

Just to address a couple of the points you mention.

The property is divided 50% to each estate and my Dads estate, as hers, is being left equally to all 5 children. She has a life interest in the property. My Dad's share held in trust for the beneficiaries.
There is some ambiguity in the Will, which she refused to change by variation, that if she downsizes she gets all the money profit from it. As far as I know she hasn't moved as yet.

It's actually upsetting to think about all this. Sorry.

As she is so materialistic we have not even mentioned any scheme or novel idea about her buying us out or even getting an equity release as we fear she will change her Will to only her kids to spite us. That is the kind of woman we are talking about here.

It appears that she has us over a legal barrel, would you concur?

[2222]

Hi Welsh Wizard

You cannot take out a loan against your potential interest in your step-mum's will, as that could be changed any time. But your interest in your late father's will trust could theoretically be the basis for a loan, although I know no lenders who would consider such a loan.

More realistically, you can sell some or all of your interest in the will trust. You can sell to members of your family or to an outside investor if you can find one. These interests used to come up for auction fairly regularly, but the firm running the auctions has all but closed down. They have retained their email list, and they could probably find a buyer for you if your interest in the trust is saleable.

http://www.hefostercranfield.co.uk/

I should mention that I have known the firm for many years and used to do work for them, but there is no other connection.

Finally, as to value, what you would be selling is your right to receive 1/5th of half the value of the house when step-mother dies, ie 1/10th of the house value. That will be payable in many years' time, so the sale value now is much less than 1/10th the current value of the house. It is possible that Inheritance Tax will be payable, and that will affect the valuation. Also, you mention there's a defect in the will, and that will affect the sale value if it does not make the interest unsaleable altogether. If you sell to a member of your family, in all fairness, much the same considerations apply and you may wish to seek help from an actuary to help determine a fair figure.

[Peridot]

Hi again welsh wizard,
I can see how frustrated and upset you are over this.
So the Will does set out circumstances for her staying and even moving again it seems.
it is quite normal to allow a move, often people can’t manage a larger property in their own as they get older so it would seem reasonable.
So is the issue over the wording of what happens to your shares if she downsized for example and funds were released or do you all have to ‘purchase’ together again ie the trustees retain the 50% share with her owning the other 50% or if the price of any new property was half the sale price then the trustees would deal with the 50% for the beneficiaries and she then owns the whole of the ‘new’ property?
I think we may all be a bit confused. Probably need the full wording of the trust part of the Will leaving the property to the children to be able to get some clarity.
At the moment it does seem like you are a bit stuck I’m afraid. Personally I’ve not heard of selling your trust share and wouldn’t be happy suggesting it, probably because I don’t know enough about it. Even if it was possible all the beneficiaries would have to agree before anything like that could happen. The inheritance tax should have been paid already if due but there may be capital gains to pay on your share when you eventually get it.
Sorry I can’t give you any more positive suggestions.

[Welsh wizard]

Hi Welsh Wizard

You cannot take out a loan against your potential interest in your step-mum's will, as that could be changed any time. But your interest in your late father's will trust could theoretically be the basis for a loan, although I know no lenders who would consider such a loan.

More realistically, you can sell some or all of your interest in the will trust. You can sell to members of your family or to an outside investor if you can find one. These interests used to come up for auction fairly regularly, but the firm running the auctions has all but closed down. They have retained their email list, and they could probably find a buyer for you if your interest in the trust is saleable.

http://www.hefostercranfield.co.uk/

I should mention that I have known the firm for many years and used to do work for them, but there is no other connection.

Finally, as to value, what you would be selling is your right to receive 1/5th of half the value of the house when step-mother dies, ie 1/10th of the house value. That will be payable in many years' time, so the sale value now is much less than 1/10th the current value of the house. It is possible that Inheritance Tax will be payable, and that will affect the valuation. Also, you mention there's a defect in the will, and that will affect the sale value if it does not make the interest unsaleable altogether. If you sell to a member of your family, in all fairness, much the same considerations apply and you may wish to seek help from an actuary to help determine a fair figure.

Hi Peridot,

Thanks most kindly again for your contribution. I will investigate the link.

I take into consideration the salient points you made. I think probably the best course, as I do not want a large lump sum now, considering house price inflation in the area of this property and current macro inflation it will be bes to ask for an informal loan of a fellow beneficiary. Multiple lawyers have agreed that the Will is ambiguously composed and I don't fancy her vindictiveness or a legal challenge if I go to the horses mouth.

Thanks once again for the contributions. I'm most grateful.

[Peridot]

Hi Welsh Wizard,
I didn't post a link I think that was 2222. As I said I'm not familiar with these sorts of arrangements so would not be happy to suggest you took this route.
A soft loan from another beneficiary may well be the most sensible way forward for you rather than approaching the horse so to speak.
All the best and if we can give any more pointers do pop back.
As an aside I do love your turns of phrase, very wizard like!

[2222]

Hi again welsh wizard,

At the moment it does seem like you are a bit stuck I’m afraid. Personally I’ve not heard of selling your trust share and wouldn’t be happy suggesting it, probably because I don’t know enough about it. Even if it was possible all the beneficiaries would have to agree before anything like that could happen. The inheritance tax should have been paid already if due but there may be capital gains to pay on your share when you eventually get it.
Sorry I can’t give you any more positive suggestions.

It obviously depends on the wording of the trust, but it is not my experience that the other beneficiaries have to consent to the sale. (Of course, I may have seen an unrepresentative sample, as I have only dealt with saleable interests!)

Inheritance Tax and CGT: You appear to think this is not subject to the tax regime for an Immediate Post-Death Interest. I'm not sure why, though?

[Welsh wizard]

Inheritance Tax and CGT: You appear to think this is not subject to the tax regime for an Immediate Post-Death Interest. I'm not sure why, though?

Hi 222,

My mistake. Thanks for the input and link. I have blurry vision today and sped tea who replied and thought it was Peridot! I'm checking that link out now. Assume my response was to you!

Not sure what you mean about your comment about CGT and IHT? I didn't express and comment on that?

Peridot, apologies for the misattribution and thanks for the kind comments and input. I agree a soft loan is the way forward to try and eschew and spitefulness from her if we mention the I word to her.

I should use my Merlin skills and turn her back from a frog into a reasonable human!

[2222]

Eschew ... like it!

I was just querying Peridot's explanation of the tax angle.

[Peridot]

Now I'm confused, sorry 2222 what was your query about IHT and/or CGT or was it another thread? I'm about to head off so may not get back till tomorrow, so bear with me.

[2222]

Not important. It can wait until Welsh Wizard raises this matter again.

[Welsh wizard]

Eschew ... like it!

I was just querying Peridot's explanation of the tax angle.

Yeah, I'm not certain I understood the context or implication of the comment.

Thanks again!

[Welsh wizard]

Not important. It can wait until Welsh Wizard raises this matter again.

I'm raising!

What was the thrust of that question? Can you elucidate a bit please?

[2222]

I'm raising!

What was the thrust of that question? Can you elucidate a bit please?

Okay then.

Peridot said: " Personally I’ve not heard of selling your trust share and wouldn’t be happy suggesting it, probably because I don’t know enough about it. Even if it was possible all the beneficiaries would have to agree before anything like that could happen. The inheritance tax should have been paid already if due but there may be capital gains to pay on your share when you eventually get it."

I queried a couple of points there. (With due respect, as Peridot is a solicitor, whereas I am not. On the other hand, I have some specialist knowledge and experience of this area of work.) I queried whether you need the agreement of other beneficiaries, and I queried Peridot's explanation of the tax position.

In practice, though, it doesn't matter if the course you are going to take is to raise a loan from a family member.