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Joshua
Joshua, Lawyer
Category: Law
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Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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My fathers Will left 25% of everything to each of his four

Customer Question

My father's Will left 25% of everything to each of his four children. It was always made very clear that no beneficiary should have an unequal share. However in order to get a mortgage on his last property, he was asked to add the name of my sibling to the mortgage and by way of a deed of trust which simply states a 5% is in his name whom I shall hereon refer to as “B”. “B” has stated that this was a “favour” to my father. My father returned this favour several fold, buying his air tickets, paying off some of his debts, ensuring he had a place to live and provide a deposit for somewhere to live when my sibling was unemployed. The money was never returned by “B”.

“B” has never paid towards the mortgage or deposit or has been involved in anything to do with the property, even after my father passed away.

It was eventually sold by the executors and they paid “B” 5% of the sell value which was five time more than the purchased/mortgaged value. In effect “B” received £50,000 for putting their name to a £180,000 mortgage where the property was always worth more than the mortgage and did not pose a financial risk to “B”.

I have heard I need to prove “B” has not paid anything towards the mortgage, can I ask the mortgage company for this information (and will be provide it to me.) otherwise would it be equally possible to show that as “B” was out of work for most the time and had no means to pay in any event.

“B” may claim that he has suffered or could have suffered because he took on the burden of the mortgage, however the fact is “B” was not working for a large part of the time and needed to borrow money from my father. My father was so worried about “B’s” large debts (which had amounted to over £60,000.) My father considered that as the property was worth £1,000,000 and if a charge was put on “B” 5% share, my father would need to find £50,000 to remove the charge before he could sell.

Unfortunately my father did not get round to removing “B” name from the Deed. When my father passed away “B” went to the property and moved bank statements relating to the mortgage and removed my father's computer. (He refused me access to my father’s property for nearly 6 weeks.)

I accept that it may be for me to prove “B” did not contribute and “B” may have a counter argument that there was a risk as co-mortgagee, but it was not my father’s intention to give an extra 5% share of his property away.





My question is;

1) Do I have to prove “B” has not contributed and how can I prove that?

2) “B” has stated they put their name of the mortgage as a favour to my father, does this make any difference to their claim because it was favour.

3) “B” did not take any substantial risk as the price of the house covered the cost of the mortgage and included a 30% deposit paid by my father, and eventually there was in fact 400% equity.

If “B” tries to claim there was a financial risk, is it relevant that there was never any financial risk as the property held a lot of equity and the mortgage payments were always made, even after my father past away. Conversely “B’s” name on the Deeds has caused a financial risk to my father due to the amount of debt “B” has accrued. Furthermore “B’s” credit rating was never linked to the property and even if there was a default, it would not affect him substantial, especially as this sibling’s credit rating has is terrible.

4) In the scenario where it is shown “B” did not contribute anything, but states “B” took a financial risk, should his compensation for be in proportion to his risk. There is no mention of a financial risk in the Deed of Trust and there is no agreement between “B” and father that any compensation would be due. If after all this the court sees fit to award compensation for taking a financial risk, can the court award an amount which is proportionate to the risk. For example is £50,000 compensation to help secure a £180,000 secured mortgage reasonable.
Submitted: 3 years ago.
Category: Law
Expert:  Joshua replied 3 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

Can you tell me who the executors are in your fathers will please? Are you a named executor?

Customer :

A firm of solicitors are the executors

Joshua :

Many thanks. You refer to a declaration of trust being agreed between them. Can I ask precisely what this says? You mention it states that your brother owns 5% of the property under the same. Does the trust refer to either party being given credit for any capital payments they make? If so what capital payments precisely are referred to?

Customer :

Can I ask precisely what this says? You mention it states that your brother owns 5% of the property under the same. Does the trust refer to either party being given credit for any capital payments they make? If so what capital payments precisely are referred to?

Customer :

Here is the Deed of Trust.

Please note;
1) It is dated by year, but not the exact date.
2) My sibling was not living and never lived at the property as it states on the Deed of Trust.
3) The Deed of Trust does not refer to either party being given credit for any capital payments they make, and my sibling did not and has never made any capital payments.


THIS DECLARATION OF TRUST is made the [DO NOT DATE] of [YEAR] by [MY FATHER] and [MY SIBLING] both of [THE PROPERTY] (hereinafter called "the Trustees")


WHEREAS
1. This Deed is supplemental to a Transfer of even date herewith and made between XXXX (1) and the Trustees (2) whereby the Leasehold property known as [THE PROPERTY] registered at H. M. Land Registry under Title Number XXXXXXXX was transferred to the Trustees.

2. The Trustees are desirous of declaring the Trusts herein contained concerning the property. NOW THIS DEED WITNESSETH as follows:-

The trustees shall henceforth stand possessed of the property as tenants in common to sell the same with power in their absolute discretion to postpone the sale thereof and to hold the proceeds of sale and the property pending the sale thereof UPON TRUST to redeem all charges affecting the property at the time of such sale and to pay all legal fees and disbursements properly incurred in connection with such sale and redemption together with any Estate Agents commission payable upon such sale and to hold balance of the net proceeds of sale for the Trustees The following proportions;

(1) 95% [MY FATHER]


(2) 5% [MY SIBLING]

2. Upon their application for registration of their title to the property
at H. M. Land Registry the Trustees shall make application for the entry
of such restriction or other entry as the Registrar may think fit to make the
effect that no disposition or dealing shall be registered without the written consent of both of the Trustees if they are living at the date of the
disposition or dealing or their respective Personal Representatives as the

case may be.

3. It is hereby certified that this instrument falls within Category L of
the Stamp Duty (Exempt instrument) Regulations 1987.


IN WITNESS whereof the Trustees have set their hands hereto...

Joshua :

My sincere apologies for the delay in responding to you. I regret I was not available over the weekend and I was on a course all of yesterday. I am available all day today save for two short meetings at 9.30 and 4pm. May I continue to assist you with this?

Customer :

Yes please. I am free after 4pm tomorrow.

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