Private Debt coming to light 8 years after probate

[Amethyst]

Blimey. Ok. Don't worry about the formatting there's an issue on the forum when using mobile/tablet at the moment that I'm trying to fix. I think I've edited it okay for you anyway.

Who drafted that letter - as I understood it is was your husbands brothers wife who drafted it and got you to sign it? If so, it's a bit weird. Weirdness aside, it is your husband and yourself agreeing that a debt of £16k is owed to her. ( Bonkers when you had only borrowed 6k overall just 4 years previously but I understand the situation with your husbands brother at that time )

Is that the final communication you had with her about this 'debt' until now ? or was there more after your husbands brother passed away ?

[Peridot]

Hi Refresh,

As Amethyst has pointed out it seems there are a couple of different 'loan' issues here. I'll try and point you in the right direction as far as the legal charge against the property is concerned.

As an executor to your brother in law's estate his wife has a duty to ensure that all assets and liabilities are dealt with, in order to deal with the administration of the estate correctly. Any assets (and liabilities - debts of your BiL) have to be included in any estate accounts that would then calculate if any inheritance tax was due and/or what exemptions apply. In this instance you indicate that his wife inherited his estate so a spousal exemption would apply - no inheritance tax (IHT) to pay. The accounts are sent to HMRC before a Grant of Probate can be issued.

As the duties of the executor would continue if for instance an asset that hadn't been located came to light after Probate was granted, then a corrective account would usually be prepared to send to HMRC as this may affect any IHT due. However in this situation there is no IHT and it may be unnecessary. This would include secure and unsecured loans but Amethyst has commented on the unsecured loan issue.

Who was the other executor and have they contacted you? The Legal Charge, if it exists is an asset of his estate that should be dealt with.

This is where things seem to get very muddy, trying to work out what the agreement actually was and how the Charge was registered against your property. This is not a charging order but a legal charge, similar to a mortgage against a property. Any legal charge registered against a property would have been agreed to, by the owners. So it would have been necessary for both you and your husband (if you are co-owners of the property), to sign and have your signatures witnessed, by an independent adult on a Legal Charge document or the proforma that HMLR supply, before an application to register the charge could be entered against the property. I

f the property is only in one name then only that person may have signed, but this opens up other issues.

It is really important that you confirm exactly what is on the Official Copy of the Entry held at the Land Registry (the document you obtained in January, I believe) The wording will help us understand whether this is a charge or whether a restriction or caution has been applied against the title. Either way with any of these in place it is unlikely you could sell the property without dealing with the issue. If a charge is in place, think of a usual mortgage situation, you sell and your conveyancer gives an undertaking to the mortgage lender that the proceeds from the sale will be used to pay off any existing mortgage. This legal charge, if it is would operate in the same way. The issue you have is there is nothing in writing apparently confirming the loan amount, interest rate and when the loan is to be repaid. Again with a mortgage scenario, if you default on payments, then potentially your home could be at risk and possibly repossessed, but again in relation to this alleged charge, it appears there is no record of how much, over how long etc.

I don't suspect the HMLR have provided any info to her regarding increasing the charge, other than the mortgage lender would have to agree, which is correct. I'm even not sure she has contacted HMLR as this sort of info is readily available or she may know from her own knowledge so don't panic that she can do anything herself. Even if she applied for an Order from the Court to call in the charge it appears it would not be straightforward due to the lack of agreement terms or documentation. It appears she is wanting money at this time and an expensive defended Court case will, I suspect not appeal to her, at this time. She may be trying her luck but without documentation it is difficult to give you more pointers I'm afraid.

Any documentation you have will be really important to help unravel what the actual agreement was. Is the charge something that you could settle now if it proves to be valid? It may be worth considering mediation if you are in a position to settle the debt and get the legal charge removed, although you need to be sure there is something to settle first.

Hopefully here's a few more thoughts about what you need to find out or locate, before even considering what the options. may be. It could be that if the charge is valid you may need some legal advice as to how best to deal, but you can cross that bridge in a bit, if needs be.

[ReFresh]

Hi Amethyst

We drafted the letter. And, yes it was bonkers! At the time we were very upset and didn't think we'd be able to see him again. As it was I saw him once and was told off for doing so! And my husband only saw him a couple more times and was abused by her when he did so (but his brother was delighted to see him). She now wonders why we don't do anything with her!

Yes, that was the final correspondence from her regarding the debt.

Kind regards
ReFresh



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[ReFresh]

Hi Peridot

Thank you very much for your post. We have only got a register extract from the Land Regristry, which we got in January and it says there is a Registered Charge on the property from my husband's brother. We have just filled in an OC2 Land Registry Form to get the information we need regarding the charge. After speaking to LR, they insist that we would have had to sign it, but neither my husband nor I can remember doing so - maybe we're in denial!

I thought the duties of the executors finished after probate was finalised - after all - the estate should then be wrapped up and the property etc if not assigned to someone then disposed of. The other executor was her brother-in-law (her sister's husband) and we haven't heard anything from him.

I agree with everything you have said, but what I still can't get to grips with - and have been searching the internet for the last few weeks, is why I can't find anything regarding a situation like this. All I have found says that if money is owed to a deceased person the debt needs to be assigned (even to a spouse) before probate can be finalised and the debtor has to be informed. The fact that this hasn't been done and so many years have passed seems strange to me. I thought it would then be fraud - if that is the correct word, to try and get a dead persons assets so many years later. I understand the legalities of a Charge, but not in this situation.

She is not short of money and he left a fair sized estate and I don't think this is about money for her. She has always been a very jealous person - even her children don't like her!

Can interest be added to a Charge if it is not mentioned in the Charge?

Thank you so much for your help.
ReFresh

[Peridot]

Hi again,

It does seem unfair but I suppose if you look at from the other side it does make some sense. If you were a residuary beneficiary and the executor did not ensure all the assets were realised, then you would have a potential claim against the executor.

If the asset no longer existed

and it could be shown the executor should reasonably be expected to have known or discovered the asset..

, then the residuary beneficiaries could be successful in their claim. In this situation as the executor is the same person as the residuary beneficiary, they aren't going to sue themselves.

Of course in this situation the 'asset' by way of the charge (if it is enforceable) is still in existence so could be dealt with. The issue here is exactly what the charge agreement was, yes interest can be included but this would need to have been in agreement terms, which you don't seem to have. The other interest that could accrue would be if interest was claimed as part of a Court claim, but again the interest could only accrue from the date of the claim being issued (provided it is indicated to be claimed in the claim form).

Unfortunately, the widow's financial situation has no bearing on whether any claim would succeed, but the parties behaviour would have a bearing on any settlement, if any. There are other options to negotiate or mediate, if the Charge was enforceable, but you need to establish this first.

You need to get together any documents that you have relating to this, including letters and any formal documents created. It would also be advisable to write a time line detailing the events and approximate dates and your recollection of discussions etc.

It may be necessary to obtain some formal legal advice concerning the charge in due course. You need to know things such as the likelihood of any successful proceedings being brought and the possible amount that could be awarded if any claim were successful. You need to have all your documents and timelines in place before talking through this with a litigation specialist.

I wouldn't rush to see someone at the moment, just gather as much information as you can at this stage. You can post here any further info you locate and we'll try and help out.

[ReFresh]

Thank you for that. It has been very helpful.

I thought that when someone dies, Land Registry is notified and takes their name off the property. If the deceased person has to be removed from important documents, why can the Charge stay in his name? I'm sorry, I'm being a bit thick. I'm just trying to work out why it didn't change to be in her name and / or we didn't get notification at the time. Is this normal?Â*

Also, if we get more letters from her, what should we do?

I'm sorry to be a pain.
ReFresh

[Peridot]

Hi Refresh,
You're not thick it is a complicated one. The ownership of a property so the names on the title confirming who the owners are is separate from any charges. The charge belongs to your BiL's estate. Yes if he was a co-owner of the property so named in the title with you and your husband then his name would be replaced with whoever inherited.
A secured loan doesn't give a person ownership but they do have certain abilities to eg force a sale. Don't panic I'm not suggesting this is the next step, just trying to explain the differences.

[ReFresh]

Hi Peridot

Thank you for your explanation. I'm assuming that means that there is no time frame for the transferring of ownership from a deceased person.
I'll let you know when I have more details.
Kind regards
ReFresh

[Peridot]

I’m looking around to see if I can find any cases of a similar nature. I suspect the courts wouldn’t look too favourably on any claim/ enforcement that is attempted, bearing in mind she has had knowledge of this charge for some time and even mentioned it after your BiL had passed away but if the charge is enforceable, which is the big question, then it can’t be ignored.
if I find anything else I will post up here.

[ReFresh]

Hi Peridot

Thank you very much for that, that is really the point I've been trying to understand.

Kind regards
ReFresh

[Peridot]

Hi Refresh,
Struggling to find any further information here. Can you post up your Official Copy of the Entry held at HMLR, redacting any info that identifies you. The address names etc are not needed, but it would be helpful to see the wording of the charge and any restriction that has been placed on the title documents. I'll keep looking in the meantime.

[ReFresh]

Hi Peridot

Sorry for the delay in getting back to you.

Title Number: XXXXX
This is a copy of the register of the title number set out immediately below, showing the entries in the register on 4 JAN 2018 at 14:37:39. This copy does not take account of any application made after that time even if still pending in HM Land Registry when this copy was issued.
This copy is not an 'Official Copy' of the register. An official copy of the register is admissible in evidence in a court to the same extent as the original. A person is entitled to be indemnified by the registrar if he or she suffers loss by reason of a mistake in an official copy. If you want to obtain an official copy, the HM Land Registry web site explains how to do this.
REGISTER EXTRACT

Lender(s): Â*Â*Â*XXXX

C: Charges Register

This register contains any charges and other matters that affect the land.
Â*
(04.12.2003) REGISTERED CHARGE dated 10 November 2003.
(04.12.2003) Proprietor: XXXX
End of register

Is that OK? I have sent away to Land Registry for the details regarding this Charge, so should have more information in about a week or so.

Also, what do I do if/when she writes again?

Thank you
ReFresh

[Amethyst]

Proprietor: XXXX is just your husbands late brother name?

Just file the letters away for now until you've got the full copy of the entry, and a good handle on the legal position - then you can go back to her confidently to either make her a f&f offer or to say either bog off or take me to court... basically xxx

[ReFresh]

Yes. His name and address.

OK, will do. Thank you very much.
ReFresh