joint tenancy mortgage

[karenp1uk]

If 2 people hold a joint tenancy on a property they own and one of them dies, does the mortgage on the property become a debt on the estate or is it not included in debts.

[Ethel]

It depends on the mortgage.

Is it a joint mortgage or in one name only? If so, who's name, the deceased or the survivor?

[karenp1uk]

It is a repayment mortgage in both names. The solicitor dealing with the probate has advised that as joint tenants, the property automatically passes to the surviving partner. However, there is a mortgage on the property and he is saying that the outstanding mortgage is not a debt, it also passess to the surviving partner. When the mortgage was taken out they both took out insurance policies to pay off the mortgage in the event of death. However, we now know that the policies were standard life policies and were not linked to the mortgage in any way so the solicitor is saying that the insurance cannot be used to pay off the mortgage.

[Pumpsticks]

Your solicitor is right about the first bit.

He is talking ******** tosh about the second bit. Assuming you are a beneficiary of the will, if there is one, and the life assurance policy is still in force you can use the money for whatever you like, providing the proceeds go to you, including paying off the mortgage.

If they go to the estate and you are not a beneficiary of this then you can't use it to pay the mortgage off. If there was no will you may not benefit under the intestacy rules.

[Pumpsticks]

There was no swearing in that last post, i said "absolute" and it changed it!

[karenp1uk]

Thanks for your answers. There is no will. Under the law both myself and my ex husband will benefit equally from the estate of our late daughter. However, as the mortgage and property was owned jointly by me and my daughter and the life insurance was taken out at the time of property purchase to pay off the mortgage in the event of her death, i feel that the mortgage should be paid off before the rest of the estate is split. I just dont know where i stand legally to try and fight this.

[Goyambokka]

This is a very helpful site.

http://www.taxationweb.co.uk/

[themas]

Was the life insurance not written in trust for a named beneficiary? This is a usual way of doing it to avoid it becoming part of the estate of the deceased. If it was done in this way and you are the beneficiary of the insurance then you can use it to pay off the mortgage. If the insurance was not written in this way it is presumably part of the estate and the solicitor is saying half of it should go to your ex. This seems to be correct, although it may be a harsh result for you.

Have you considered whether you could make a mis-selling complaint against whoever sold you the life insurance? If you made it clear the policy was intended to pay off the mortgage then it should have been set up that way. Also, if it was not written in trust that could be another reason for complaint.