I bought a second house in Hull for £38,000, paying 100% of the purchase price for it with my boyfriend, who was then very ill. We bought the property as tenants in common and not in joint ownership, as was my intention. My friend died in 2001 without a will or known heirs. Since I was working abroad a lot, I never got the will. The house was left empty.
Now, I'm 78, I'm worried about selling my estate but I can't, because getting a will is too complicated. I am also being charged double council tax on an empty property. How can I obtain a will in light of this and finally get closure?
There is a difference between “legal” and “beneficial” property which is important here, says Andrew Reay, director of probate at law firm Harbottle & Lewis. Legal ownership refers to the name on the title register at HM Land Registry. Beneficial ownership refers to the true underlying ownership, which is not registered with HM Land Registry.
The position regarding legal ownership of the property is clear: you and your friend were joint legal owners, as you intended. After your friend dies, legal ownership is automatically transferred to you under the law of survivorship, and now passes to you alone. You can apply for a correction of legal surname at HM Land Registry, in other words, to remove your friend's name, simply by submitting a copy of his death certificate.
Once the legal title of the property is updated, you can then sell the property. When you own a property as joint tenants, HM Land Registry places a restriction on the property register that requires two sellers. This is to protect the beneficial owners as the sellers can hold each other accountable in properly handling the sale funds. Therefore, you will need to appoint another person, of your choice, to be your co-seller. Upon sale, both you and the co-seller will “pass over” any beneficial interest your friend's estate has in the property.
This means that instead of retaining a percentage interest in the property, your friend's estate will own an equivalent percentage interest in the proceeds of the sale. You will then hold his share of the sale proceeds in trust for his estate. Selling will at least mean you won't be responsible for ongoing property expenses.
However, this does not necessarily solve the problem of the identity of the beneficial or equitable owner of the property. I note that you paid the full purchase price and, depending on your intentions at the time, you may therefore have a “resulting trust” claim on all beneficial ownership.
However, you also chose to be a tenant in common, which suggests that you may have intended to give at least some beneficial ownership to your friend. As you know, joint tenancy means that each beneficial owner owns a separate interest in the property (rather than holding all the property together, as with joint tenancies).
I based the rest of my answer on the assumption that, at the time you purchased the property, you intended to make a gift of an interest in the beneficial ownership (plus the legal title). The amount of this share will depend on what you intended at the time you made the gift to him, although if you did not enter into a declaration of trust or document the proportions in which you wanted to retain the beneficial interest, this will be difficult to evidence.
The person to whom the proceeds of the sale must be paid will be the administrator of his estate. You say he has no known heirs. A practical solution may be to talk to a professional genealogist or heir hunter and explain that you hold assets for your friend's estate. The heir hunter will then make his family tree. This is usually at no cost to you; Their fees are usually paid by the beneficiaries, once they are found.
Any existing heirs will be able to obtain letters of administration, and you can then pay them the money owed to the estate. If heir hunters cannot find an heir, your friend's share of the proceeds of the sale will be paid to the Crown.
Can we challenge my aunt's will?
My wealthy aunt recently died at her home in London, leaving estate assets there and in Switzerland, as well as a number of bank accounts in each jurisdiction, and numerous offshore trusts and stock portfolios. The most recent copy of my aunt's will was produced by her former nurse and she stands to benefit to a greater extent than the family realized. We are concerned that it may have changed recently. what should we do?
Laura Phillips, legal director at law firm Kingsley Naples, recommends investigating the preparation and execution of your aunt's will. For example, try to find out if it was prepared by a lawyer or will writer (the information is usually found somewhere in the will).
If so, try to obtain a will file that contains attendance notes or instructions about why your aunt made the decisions and legacies she did. This may also indicate whether the nurse is present when instructions are given. If the will is homemade (in other words, no independent person is directed to help), try to gather information about your aunt's behavior and health when writing the will.
If you have doubts about the nurse's influence over your aunt, there are ways in which a will can be contested in England and Wales.
The first consideration is whether your aunt has a condition that may affect her mental ability, such as dementia. In order to make a will, a person must have testamentary capacity. However, even if someone is diagnosed with a cognitive illness, this does not automatically mean that they lack testamentary capacity. It will require a detailed review of medical evidence and other contemporary documentation to assess this.
It is also possible that, even if your aunt does not have such a condition, she may not have been aware of and approved the full contents of her will. For the will to be valid, the testator must be aware of its content and include all the details, no matter how complex they are and no matter the specific gifts.
Finally, you should consider whether your aunt has been unduly influenced or coerced by her nurse. Claims of undue influence are often defended but very difficult to prove because the person who can provide evidence that they were coerced is the deceased themselves. However, contemporary documents such as medical records, diary entries and memories of other people who were close to your aunt and who may have had suspicions can be considered.
Our next question
HMRC have decided that my company owes a significant amount of additional tax. I disagree, so I didn't pay, and now it's a legal requirement for the company to pay. What does this mean, and what should I do about it?
Assets held in offshore trusts will not pass under your aunt's will and so you will need to look at the trust documents or contact the trustees to determine the beneficiaries of any trust assets after her death.
Because your aunt also has assets in Switzerland, you should obtain advice from a lawyer there to determine how the will (and any challenge to its validity) will be treated under Swiss law.
The opinions expressed in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors do not accept responsibility for, and exclude liability for, any direct or indirect consequence arising from any reliance on the responses, including any loss.
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