Hello, my father passed away late last year and only now is Probate almost complete (I would expect within 2-3 weeks). He has had a mortgage on the family home since 1980 which was originally taken out to support his partnership family farm between himself and his cousin. The farm had been paying the mortgage each month as it was the farms debt but since my father has passed away, his cousin/ the farm has ceased paying the mortgage and are refusing to pay. My fathers involvement in the partnership was dissolved after ill health for two years and he took out a life insurance policy to cover the mortgage should he pass away so that the family were not liable. However, I still believe that the debt is directly related to the farm and therefore regardless of this life insurance, that they should pay the remaining balance of the mortgage. I appreciate I may only feel this way because my dads cousin isn't exactly popular within the family but I still feel that there may be a case to be made. There were family murmurs of an 'gentlemens agreement' having been made but my dads cousin isn't the kind of person who is likely to honour this agreement unless we can find something in writing which at the moment is unlikely. Do we have a case? Thank you for your help.
Hi Claire,Thank you for replying - My father as mentioned previously was a partner in the farm and therefore I believe he was concerned that at the time of taking the mortgage on our family home that should he have passed away this mortgage would have automatically have become requested to be taken out of his estate. From what I understand usually the bank therefore demands this be paid in full unless a suitable beneficiary of the estate can be granted a new mortgage. My mother would not have been able to secure a mortgage and therefore it would have been likely that the house would have had to have been sold to fund the outstanding mortgage. Therefore I see it as the insurance was taken out to cover the mortgage so that no financial demands were put on the family.
However, this being said, although this could also be applicable to 'protecting' the farm from said expenditure, I do not want my fathers death to be the reason why a company he was no longer involved in to be 'benefiting' from, especially as I see that the debts of the farm should have been accepted by the farm upon my father signing over his involvement in the partnership/ the partnership being dissolved.
Thank you for your help.