Advice to change to Tenants in Common wasn't done.

[Windymiller]

Hi, everyone, I did ask about this last November but there's been an update. I'd be grateful for your thoughts.
Summary - my father died end Oct last year.
He left his estate 50/50 to myself and my uncle.
His main residence he originally bought with his sister as Joint Tenants. She died 2019. In her will she left her half of the house to her son, she was advised in a letter from her solicitor to change to Tenants in Common (so she could do this). Her son died a couple of years ago, so her share would automatically pass to her 3 grandchildren.

I've just had a phone conversation with my uncle and he says nobody can find any record of it being changed to Tenants in Common. As I said in my first post, the title deeds support Joint Tenants. So I'm assuming my late aunt's are not entitled to half. They are under the impression that they are (one in particular has helped get the house ready for sale). Do they have any claim to their half.

Also, when my aunt died (2019) - her half of the house (assuming Joint Tenants) would have passed instantly to my father. My uncle has said that my father (he did all the probate) told him he has paid all the IHT. Would her half of the house been liable for IHT or just passed to my father by law?

We are using a solicitor BTW.
Thanks for reading.

[Windymiller]

Just to clarify - my aunt's will stated her half of the house would pass to her son (but as he died earlier, now her grandchildren) when my father died.

[atticus]

Would her half of the house been liable for IHT or just passed to my father by law?

We are using a solicitor BTW.
Thanks for reading.

My understanding is that the answer is both, but your solicitors can advise.

[Windymiller]

Thanks, atticus - my uncle says my dad told him he'd paid all my aunt's IHT, so I'm assuming the IHT for her half of the house was due when she died and not now.

[Windymiller]

Please forgive me for having another go at this. I've been doing a bit of research on the Internet.
My father and his sister - Joint Tenants.
She dies - leaves her half of house to her descendants. But advised change to Tenants in Common (from her solicitor to her in a letter) was never done.

Can there be a Deed of Covenant to retrospectively change to Tenants in Common so my aunt's descendants get half the value of the house? (It is being sold).

Thanks for your patience!

[Windymiller]

BTW in her will she left her half of the house to her descendants on the death of my father.

[Windymiller]

I said Deed of Covenant - I think it's Deed of Variation

[Pezza54]

No, too late to change ownership of the property from joint tenants to tenants in common
Your father became the sole owner when your sister died. I am surprised that the executor to his sister's will failed to point out at the time that her half share of the property could not pass to her son.
When your father died the property belonged to his estate and his will states you and your uncle inherit 50% each of the estate
If you and your uncle are in agreement you could consider a Deed of Variation to your father's will
You stated the property is being sold
The effect of the Deed of Variation would be:
Property sale value less fees x 50% /3 = each grandchild's share
The wording of the deed would not require figures as the sale could take some time in the current housing market

[Windymiller]

Thanks, Pezza54 - that's very clear.
The house has had a lot of interest actually. The other house he rented out has had an offer for the full asking price. All must wait for probate of course. Next week is the time anyone else with a claim to the house must come forward - after that the estate will be distributed. How long that takes is anyone's guess.

[Windymiller]

Just another thought - the executor to my father's sister's will was my father (my uncle declined being the other executor).

So (it probably won't come to this), if myself and my uncle didn't want to do a Deed of Variation, or didn't give the full 50% minus fees to the 3 grandchildren - I'm assuming they wouldn't have any legal comeback.

[Pezza54]

In my opinion they may have a legal claim. Other forum users may disagree
Your father, as executor, could have and should have, severed the joint tenancy after his sister's death so the terms of her will could be followed.
Her son, as main beneficiary to his mother's will, should have been told he had become a 50% owner of the property. He clearly believed he was and must have told his children. Again I am surprised that his children failed to raise this with their father's executor

Your father failed in his legal duties as executor. His sister's 50% share of the property would not be part of his estate had he acted properly as executor

The grandchildren may have a valid claim against your father's estate if you do not agree a Deed of Variation

[Pezza54]

I have just thought of something else
You stated your father paid the IHT due on his sister's estate
If she had lived in the property as her main residence at any time and her 50% share had passed to her son, then her estate would have been entitled to RNRB
Depending on her date of death in 2019 the RNRB would have been £125k or £150k maximum
At 40% rate for IHT that is either £50K or £60k that may not have had to be paid to HMRC, depending on the property and total estate values
It is too late to reclaim this tax, but if the grandchildren found out it could become part of their claim

[Windymiller]

Thanks for your detailed replies, Pezza54 I really appreciate it.
Just out of interest, my aunt's son was left 70% of her estate (not including her 'beneficial half share' in the house). He was able to purchase a house with this. Unfortunately he died not long after. His probate form states the gross value of his estate at £322K.
So obviously half the value of my father's /aunt's house (about 300K in January 2019) brought her estate into IHT.

[Pezza54]

Your aunt's estate would have been entitled to £125k RNRB.
Adding the £325k NRB totals £450K
It does seem that as your father could not take into account the £125k RNRB, £50k IHT may have been overpaid, but the total value of your aunt's estate requires checking.
Your father may have kept estate accounts.

Did your aunt live in the property as her main residence?

[Windymiller]

Yes she did. I don't know about any estate accounts or anything like that, caring for my mother 24/7, I haven't even seen my father's 2 houses since he died. Her grandchildren will have to sort out any overpaid IHT.