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.
May I ask if this relates to a property that you jointly inherited or shares or something else please?
I am executor of my late mother's Will. All that is left to deal with in the estate is a property we jointly inherit, all other monies from the estate has been shared out. I wish to take over the property and continue to rent it out (as I had been doing under my Power of Attorney for my mother before she died). My sister wants her money now, so this allows us both to get what we want. We have agreed a price and agreed that once I pay her she forfeits any further rights under the Will. I have drafted an Agreement for us both to sign. I just want to be sure there are no issues I need to be aware of.
thank you. So from what I understand, beneficiaries of your mother's property under your mother's will are you and your sister and your sister is open to your proposal to acquire her share of the property?
may I ask how long ago your mother passed away?
also, do you consider that the property has increased in value from the valuation you provided in order to obtain probate or would your sister be content to use the valuation provided the probate to value her share?
Yes, my sister very much wants to be "bought out", and would want this even if I were to sell the property instead of taking it over, as she needs the money ASAP. My mother died in October 2013. The price we have agreed is actually below the Probate Valuation I got from a local Estate Agent.
Thanks. on that basis, the position is very straightforward providing you and your sister are able to agree on a price. At the most basic level, it is simply a question of you and your sister clearly agreeing on the amount she is to receive in order to transfer her share and documenting this clearly in writing your records and you as executor or signing a form of the sent to transfer the property from your mother's name into your own.
however, if you are proposing to pay for the property share using your own money which I assume in one form or another is the case, you may wish to ask a solicitor to formally investigate the title for you pay money for it. It is one thing inheriting property but it is another paying for any part of it using your in money and you may wish to ensure there are no difficulties or problems hiding in the title which may affect the value before you pay for it
That's what I thought. Actually the Assent will take place later, as I will first have to pay off a local authority charge (for part of mum's Care Home fees). Once this has been paid off I will, as sole inheritor of the property, simply have it transferred into my name at the Land Registry, using the Assent form of theirs. I presume there would be no problems with this. Would there be any reason to consult a solicitor at the Assent stage?
Sorry for the short delay - I have just had to take a phone call.
Sorry about that. I am back
you do not have to use a solicitor however in the assumption you will be paying a not inconsiderable sum of money to your sister, you may decide that you want a solicitor to prepare transfer agreement for you rather than prepare the same yourself to ensure that the document clearly shows what has been agreed.
There is no reason you cannot do this yourself but it is important that the document clearly shows the price that has been agreed for her share in the property and that your sister agrees that following receipt of that payment she no longer has any interest entitlement or other beneficial interest in the property and further that she has not charged or encumbered her beneficial share
The property (a flat) has been agreed as valued at £93,000, but the local authority charge on it is £61,000. We have agreed I will pay my sister half of the difference, i.e £16,000. I have sufficient funds to then pay off the Local authority charge. The agreement I have drafted clearly shows the £16,000 price agreed, when it will be paid and that as a result she will have nonfurther rights to money from the estate (I will now actually use the wording you use). By "she has not charged or encumbered her beneficial share" do you mean she has not effectively already sold it on to someone else?
ideally, both you and your sister should sign at least two copies so that each of you can retain a copy and this will form conclusive evidence that your sister no longer has any interest in the property. the effect of the wording I use above is confirmation that she has not used her beneficial share as security for any debt. Tthis is highly unlikely to apply but is best practice to include
is there anything above I can clarify for you?
No, that has been very helpful thanks.
A pleasure. If I can assist any further as the situation develops please do no hesitate to let me know.
If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with though please reply back to me though.
Joshua, some more questions if I can - let me know if there are more charges for these.
1 - What acknowledgement or confirmation do I need inheritors' receipts of disbursements I make from the estate?
2 - What are the processes for me at the end of Administration of the estate? I am aware of the Inheritance Tax certificate from HMRC, final Tax Return to HMRC and payment of that income tax, transfer the property to me (as sole inheritor by then). Are there any more?
3 - Apparently I can, as Executor, already transfer the flat into my name. Is there any point in doing so, and what would happen if the local Council still has a charge on the property? Do the Council need to agree with any such change? Does your answer to this also apply when I finally change the property into my name (as inheritor rather than Executor), whether or not I have changed it into my name as Executor prior to this.
4 - Given your previous comments at 2:22pm, am I correct that from the agreement date: -
a) - my sister, as well as having no further "interest" in the capital value of the flat from the agreement date, also has no further "interest" in any income from, expenditure of or income tax liability for net income from, the property?
b) - both my sister and I both have an "interest" in any income, expenditure or income tax liability arising after that date?
One further question please. Once I buy out my sister's "interest" in the property, should the monthly interest payable on the local authority charge (up to me paying off the charge fully) come out of my ring-fenced funds in the estate, made up of the net property income after the buy-out date? Or should come out of the funds in the estate which we still be our joint inheritance?As I am only buying out her share of the net value of the property (i.e. Valuation of property less outstanding local authority debt) it would seem this is still the estate's responsibility. Am I right?
I've just realised I omitted some crucial text in point 4 b). It should have read: -
both my sister and I both have an "interest" in any income, expenditure or income tax liability NOT related to the property arising after that date?
Joshua, I needed answers to question 3 today, so please ignore that, and the 2 further "replies" which I posted. I will ask question 3 of another on-line lawyer today.