Executor or friends Will , property left to children issue

[Dawnexe]

Hi
I need advice on how to proceed with friends will. I am executor along with her husband. She died leaving her half of property to their 2 children at 21 years of age.
There were no trusts set up in the Will , just states everything left to children. How does this work when husband still lives in house and looks after the children. ? They were tenants in common.
husband wants to transfer kids half to him being sole owner with an agreement set up that they can have their half if/when property is sold.
Is this going against the wishes of the Will? What happens if he remarries? Does the property have to be transferred to their name legally? He is reluctant to use a solicitor to avoid costs but I need to make sure the childrens assets are protected. He has concerns the children will be liable for mortgage if he defaults hence why he wants to transfer ownership to himself. How do,we proceed the easiest way for everyone concerned.

[Sam101]

Assuming that the property ownership was tenants in common, then the whole property cannot be transferred to the husband as it is not as the Will intended, with the husband having a life interest until he dies or decides to move out.

This type of Will is not uncommon and the Will in effect creates a Trust and the Executors and Trustees are legally responsible to ensure that the Will is executed correctly. Check the wording of the Will fully as Executors may find themselves having legal problems later on. This is really why professional help in using a solicitor is important and would protect the executors.

Please confirm how the house was owned.and if necessary, include the wording of the Wuill but exclude any figures or names and addresses for confidentiality.

[Dawnexe]

They were Tenants in Common.
I give my residuary estate to my trustees for such as ***** and ****** as survive me and attain the age of 21 and if both do so in equal shares absolutely

[Dawnexe]

Do we have to have a legal document drawn up or just hold the will and make sure it’s shared out when and if it needs to be. What do we legally have to do? There is also money in the bank too. Do we just open a bank account in our names to hold the money?

[Sam101]

Thank you. That looks just as I would have thought. It is a Will Trust and the half home owned by the wife is to be held in Trust. The Will itself creates the Trust and there is no extra document.as some people think there should be.

No rush, but eventually the Deeds of the house that show the tenants in common ownership, need changing to show that the Trust is the other owner now, with the husband still owning the other half, with a lifetime interest in the half that is now in Trust. The husband cannot own it all as half is for the children and you have already mentioned the problem that has often cropped up with others is if he remarries, so its important to ensure you do your duty..

When the husband dies, then he should have a Will that determines how HIS half of the house should be distributed. Possibly to the two children, but if the Will were done at the same time, his Will is a copy of hers. If he had died first then the situation would just reverse as to now.

The residuary estate of her estate is everything else she owned at the date of death and that is to he held by the Trustees for the children at age 21, together with the half house in Trust that is theirs also when the husband dies.

It may be that if the husband wanted to move to another house, then the Trustees would be responsible for ensuring that the half value and the residuary estate assets are maintained for the children until they inherit, but the husbands assets are only his half of the home plus any other assets that are his alone.

First thing is to obtain Probate if required. To know if it is needed, we need to know the value of her estate in total. Do you know the actual value of the house and is there a mortgage outstanding and if so, to what amount and was there a mortgage protection policy, which may pay off the mortgage on the death of either.

Also, was the death after the 1st of January this year as regulations changed then regarding Probate. How old are the children please.

Sorry if I am giving too much detail, but \i want to make sure that you do understand the whole picture and will deal with the bank and next steps when I hear back from you.

Sam

[Dawnexe]

Thank you so much for all this detail. I really appreciate the time you have taken to get back to me.

We have started probate. The house is roughly valued at 400k with about 100k outstanding on the mortgage. Does the husband have to notify the mortgage company of her death? There is about 40k in her bank as she had been left money in a will from her mum.

Children are 12 and 20.

No mortgage protection as far as I know.

Not sure if he has a will.

There is a slight twist in the tail. The reason I was executor as well as husband is the fact my friend had incurable cancer. Husband had multiple infidelities and they basically stayed together because of the illness and the children. She wanted her half to go to the children solely. She did not want any future partner of his to have access to her half of the estate.

How do i know that the will is the actual trust? I'm really worried I'm going to do something wrong and disinherit the children. The will doesn't state he has a lifetime Interest. It literally just says that sentence I typed above. Can they have access to the actual cash in the bank.at 21 ? who holds this money until then?

what happens if he defaults on mortgage payment. Hes worried kids will be liable if he loses his job .

I'm trying to work with him as tactfully as possible but I think he feels I am intruding on his business. I just want to do things properly to protect the kids assets. I dont want to fall out with him.
Death after jan rhis year.

[Sam101]

DAWNEXE - Thank you again for the extra information.

Please do not feel that you are intruding in his business. The reason you were asked to be an executor is for the sole purpose of looking after her children and she trusted you in these last wishes. From what you have said so far, I can really understand this and how she was reliant upon you to look after matters for her and I feel sure you will be doing your very best.

The money in her Bank Account cannot be touched until the executors have obtained Probate, as banks have their rules. However, with both you and the husband being joint executors, it would be prudent to let the Bank know very clearly that no way are they allowed to deal just with the husband in this instance. I don't believe they would but better to be safe than sorry as the money is for the children alone and not his, or to be used for anything else.

Once Probate has been granted, then the Bank can release the account to the Trustees, but this then needs to be held on Trust for the children, often as a Trustee account with the children's names and Trustees names.

With death after the 1st January this year, there is far less form filling needed to obtain Probate. Presumably you have found this out with the application made. Hopefully the application has been made by both you and the husband, as in this case you need to have some control.

A problem may occur if for any reason you were unable to continue as a Trustee, illness or whatever. Perhaps eventually it would be prudent to consider adding another Trustee, even if it needs to be a professional who would charge fees. Thoughts to consider later on.

The bank account money could be used by the Trustees to help the children, say for schooling or for any benefit for them specifically, but bear in mind it is only after they are 21. The oldest being able to receive benefit sooner, but not the younger one. This is one of the difficulties of acting as an executor and Trustee which your friend is reliant on you to manage.

As regards the mortgage, I assume that it is a joint mortgage, (is it?) in which case the lenders should be advised of the death and the fact that her half is to be held in Trust for the children. Do you know if the mortgage was being paid just by him, or jointly and did she have an income that was also used to help with the mortgage?

Do not worry about the mortgage and the fact that the husband has indicated that he wants to protect the children against being liable in default. Should that problem come up, then the husband would not be in a good position as default would mean that he could not obtain another loan and he may need to move to another property, within the wording of the Will. Do you think he would have sufficient income to continue payments?

The Will should have wording that the husband has an interest to remain, possibly with lifetime interest, or some wording like that, as she knew that her half was for the children and yet he would still be living there. Do check this again and let me know. The Will itself creates the Trust, as I mentioned before.

You could consider asking a solicitor to look at the Will and confirm the details. Often good solicitors will be prepared to hold an initial meeting to discuss a matter without an initial charge. The hope being that they will receive some instruction to act. You can ask the question of a few, explaining the problem and saying you only need to have the Will clarified to assist you in your appointment. Even the Probate office may be able to help and a phone call would establish if they were?

There is no need for any other legal document at this time and as one of the beneficiaries is a minor, then I believe that the Will could not be changed by a Deed of Variation, which is something that could be done withing two years of a death provided all beneficiaries agree and a minor cannot agree.

Hope I have covered it all and perhaps we are moving ahead with your knowledge. This is where forums such as this can be helpful when needed. If you have any problems with Probate, or need any other help, do ask and I will be pleased to assist.

Sam

[Dawnexe]

Thank you so much.
The will has no other wording apart from what I typed earlier. no mention at all of lifetime interest nothing. Just that it was being left to the children. Is this an issue?
so just to clarify, the Will acts as the trust document and the husband just needs to inform the mortgage company her half is left in trust to the kids. Does this apply to the title deeds too of the property at the land registry?
im not sure how the mortgage and bills were split. She left her full time job a year before she died. But had alway contributed to the household

So do we just deal with the bank account setting it up in a trust and leave everything else as it is as you say the will acts as a trust document? Do we need to give a copy to anyone like the bank or mortgage company? .

if a new lady moves in this will does protect the children going forward?

[Sam101]

Thank you again,

Do you know if the Will drawn up by a solicitor, or a Will writing company, or indeed a Will made up by your friend ? It is unusual not to have mentioned the lifetime interest when the husband was expected to remain in the property and occupy all of it when only owning 50%. A solicitor would normally have included mention of the interest and not have missed that point, otherwise be liable for future problems.

Have you retained a copy of the Will and is it a Certified copy or just a photo copy, as Certified copies are often needed by others. There may be need for a Certified copy of the Will and of the Death Certificate by banks and other institutions.

As for the bank account, when Probate has been granted it should be split into two accounts to ensure that each child has 50% at the outset. With the older child, when is the 21st Birthday, as this could change matters of registration with the Land Registry?

As that account was in her name, presumably there was also a joint account, possibly where income would be paid into and the mortgage paid from. This is where the costs of funeral etc should be paid from, not from her account that belongs to the children from when your friend died . The value of this needs to be established as 50% may form part of the residue, although I am not 100% certain of this, so this is a question you should check on if you can chat with a solicitor.

May I ask how close you are to the children. Just a friend of their mother, or closer and possibly considered as an Aunt/Uncle who can be consulted. The reason I ask is that the older child inheriting the bank account on the 21st Birthday is a lot of money at an early age and he/she should be advised to be careful how that capital is looked after. Someone having a large amount of money at an early age can be a target for others and he/she needs to be aware not to discuss it and not to lend it to others unless a written loan agreement is made for any larger sum. I am just trying to help as |I would if I were one of the Trustees.

As you have mentioned your friends employment, there is certain to be occupational pensions that she had and they may form part of her residual estate even though there may be a letter of wishes with the pension provider/s with the husbands name as beneficiary. I believe that the Will would include pensions as her residual estate and you need to clarify this so that the husband does not obtain more than he should if you understand me.

As mentioned earlier, after Probate the Land Registry, where the Deeds are registered. will need to be notified that 50% of the property is now held by the Trust. The date of birth of the older child may change when this application is made, as if that is near, it may be best to wait and then 25% can be registered in his/her name at 21 and the other 25% in the name of the Trustees until past to the younger child.

You will also need a few copies of the probate as well as the Will and the children may need to eventually have copies for their own records until their inheritance is completed.

There should also be a press notice place in The Guardian, under notice of deaths. This is to ask if there are any debts outstanding against you friend. My be unlikely, but one never knows. It is really to protect the executors so that if a debt came up after the state was completed, the executors could be held liable for the debt. This is something that solicitors and firms that deal with Probate at a lower cost would undertake automatically if dealing with Probate. The Guardian would know about the correct wording if you contact then.

If a new lady does move in, it will not change anything. The husband will only own his 50%, but bear in mind that this is the net value, after the mortgage and this is where the professional legal person or solicitor would ensure that the correct action is taken. Making sure that the present value is correct is important. Who valued the property? Ideally it should have been an RICS qualified person with property values going up so well recently, depending on the location it is in. Which County is the property in?

Even though the husband does not wish to instruct a solicitor to deal with matters because of cost, there are many other PROBATE offices that have a service to deal with the more complex Probate matters and where children are concerned, it's very important to get it right, Again, you could speak with a few companies for guidance and there are lots of details on the Webb through Google or the like.

Hope I have not missed anything, but again, I am here if you need more and would appreciate you keeping me updated as this progresses as I would like to know that you are managing it all. A great responsibility but one which is in itself rewarding to know you are looking after her children well.

Sam

[des8]

[QUOTE=
There should also be a press notice place in The Guardian, under notice of deaths.

Sam
[/QUOTE]

I think you mrean to post a deceased estates notice in the London Gazette after obtaining the grant of probate (https://www.thegazette.co.uk/wills-a...estates-notice)
This provides the executors with statutory protection as per sec 27 of The Trustee Act 1925

Fuller explanation here: https://www.thegazette.co.uk/all-notices/content/103403


I also think that Land Registry only register the land in the name of the trustees as land cannot be registered in a trust
I think it has to be registered in the names of the trustees with a Form A (?) restriction.
I certainly would use a professional to deal with the conveyancing

[Sam101]

Thanks DES8, appreciate the correction. In conveyancing, presumably you are thinking ahead, as the property is not being sold.

[des8]

Conveyancing in that the legal ownership (if not the beneficial ownership) has to be transferred from the deceased to the trustees.
One of the trustees already has 50% of legal ownership, and I would be concerned if I was the other trustee of making an error and somehow inadvertently giving the father full control.

However I was an insurance broker and am risk averse!

[Sam101]

Thanks again DES8, it is a concern that DAWNEXE Trustee makes sure that this is done correctly and a professional would be best.

[Dawnexe]

Thank you al, for yr help. It’s certainly given me a list of things to consider and ask about.
`the will was definitely done by a solicitor. I have a photocopy and original has been sent for probate.
So we need convenyancing as I suspected. I’ll need to ask about pensions as he hasn’t mentioned that to me.
Does the kids share rise in value going forward. Obviously it’s only husband paying the mortgage going forward so will he be entitled to more going forward as children are not contributing to the outstanding mortgage. He may see this as being unfair.

[Sam101]

Sounds like the solicitor that prepared the Will may need to update his methods if obvious things are missed from a Will.

That is the solicitor to contact and ask for an explanation, without any cost, as it does seem the Will is confusing.

If he cannot clarify that the Will is correct and as your friend wished according to his notes that should have been taken when receiving instructions, then he must be responsible if it is contested, although that may be doubtful.

What concerns me is that if the husband has not been granted a lifetime interest, then that is either what your friend wanted and instructed the solicitor to do, or the solicitor has made a mistake in not including it. Perhaps DES8 may wish to comment on this.

As the value of the property continues over time and the invested capital also increases, that is all for the children, although the eldest (date of birth would help) may possibly benefit sooner than the younger depending of the husbands residency.

One step at a time, we can discuss the investment nearer the time, but in view of the elder, that capital needs to be kept in cash, all be if, possibly an ISA to take advantage of the tax free growth?

Importantly, did you and the husband BOTH apply for Probate, or just him?

Sam

PS, Not an ISA as it cant be held in the Trust. As soon as she inherits, an ISA would be good.