I am helping my friend, whose mother has just died, sort out the family home. I am sure a solicitor may get involved at some stage but it would be useful to know what questions to ask.
In 1986 the father died and the house passed through his will to his 3 daughters stating in his will (drafted by a solicitor) that his wife had a life tenancy/right to live there. The house was registered in the names of the 3 daughters as tenants in common, by way of assent. The father's will effectively states the terms of the trust assumed by the tenants in common restriction.
The reason for putting the house in the children's names was to help avoid the DSS being able to means test the mother in the event of nursing care being needed and to avoid inheritance tax.
The mother has just died and fortunately never needed care or any DSS involvement. Her hand written will with unwitnessed scribbles and alterations only refers to her basic savings accounts and distribution of money to grandchildren as she believed she never owned her house and it was already safely vested in her children's names.
The house is now worth about 220,000 well below the current Inheritance Tax threshold and the savings are modest (about 8000). Probate will be necessary to release the bank accounts and the hand written will can be sorted out or discarded as appropriate.
Surely the house, although in the 3 children's names must be treated as held by them on trust or as nominees for their mother so they can inherit it at today's value to avoid incurring Capital Gains Tax based on 1998 values. The 3 children are the next of kin.
Am I right in assuming that the house should go on the probate form together with the savings accounts. This will establish the house's value at today's prices and the children then apply for probate without a will on the basis that they are claiming their inheritance to include the house. They already have control over the sale because they are the registered proprietors.
I assume that if they were trying to avoid Inheritance Tax the law would assume that the mother had had full use of the house during her lifetime and the children only enjoyed a restricted ownership due to her occupancy and its value would be deemed to remain in the mother's estate. They would not be allowed to dodge Inheritance Tax by claiming they already owned it prior to death as they had moved out over 30 years ago. They now wish to set aside their father's transaction in their favour and avoid Capital Gains Tax which seems reasonable.
Would a formal document be necessary to declare these revised terms or could they just put the house on the probate form and keep it simple. You do not have to prove title to declare an asset on a probate form.
Any suggestions appreciated
Graham Brooker