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uk2088

Inheritance, Lodgers and Rights

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We’re hoping people may be able to advise.

Our grandmother recently passed away, leaving her estate in a split of;
50% to eldest daughter
25% to youngest daughter 
12.5% each to 2 granddaughters (daughters of her youngest daughter) 

Eldest daughter is the only one in a position to buy the others out, thus keeping the house within the family. 

Eldest daughter has no offspring, and her will splits her estate 50/50 to her 2 nieces (us!) - therefore grandma’s house will eventually become ours should eldest daughter/Aunty buy it now. 

However, Eldest daughter/Aunty has a lodger. He has been around for the past 10 years, and lived with her in her current home. Her plan is to ‘buy us all out’ with the sale of her current house, and move into grandmothers house with this lodger. She states they have no romantic relationship (I think he wishes it was!) but similarly they do not have any formal contract for their arrangement. They have a dog together. She tells us he pays £500 a month towards all mortgage/living costs, but again, no contract. 

We would like to know if he holds any rights/claim to our grandmother’s house (that should eventually become ours) by moving in with her, and living there indefinitely? 
Should we look to advise our Aunty to draw up a formal contract of lodging? 
Does the dog class as a dependant and complicate things?

Obviously we are expecting our Aunty to live a long life, however should anything happen, and the lodger is still alive, could he complicate the inheritance or have any claim on her estate (even though her will states 50/50 to each niece)?

Many Thanks

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Heard a similar story from a colleague and yes, the "lodger" claimed of being the boyfriend by organising and paying for the funeral.

Dogs chipped in both names supported his story.

He still lives in the house, rent free now.

Tell your aunt to put something in writing and attach it to the will.

I would do this in front of a solicitor, it would cost peanuts compared to the potential trouble ahead.

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Posted (edited)

Sorry to hear about your grandmother.

 

Let me check I have this right, you are the granddaughters entitled to 12.5% each of your grandmother's Estate?

 

Who is the Executor(s) of your grandmother's Will?

 

Is her house the major part of her Estate?

 

Who lived in it before she died? Your grandmother on her own?

 

Who is living there now? Is it unoccupied? Is it still furnished? 

 

What, if anything,  does the Will say about selling the house? 

 

Ignore what your Aunt's Will says. It's irrelevant to your question, and anyway she could change it.

Edited by Ethel Street
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2 hours ago, Ethel Street said:

Sorry to hear about your grandmother.

 

Let me check I have this right, you are the granddaughters entitled to 12.5% each of your grandmother's Estate?

Yes, we are the granddaughters, each assigned 12.5%

 

Who is the Executor(s) of your grandmother's Will?

her eldest daughter (our aunt) is the executor 

 

Is her house the major part of her Estate?

yes 

 

Who lived in it before she died? Your grandmother on her own?

yes, my gran lived there on her own after my grandad’s passing in 2010

 

Who is living there now? Is it unoccupied? Is it still furnished? 

it is currently unoccupied, my aunt (and the lodger) are planning to move in next week so she can ‘gut’ her house to make it more appealing for sale. The sale of her house will ‘free’ up the money to buy us out, making grandmothers house hers. 

yes, it’s still furnished 

 

What, if anything,  does the Will say about selling the house? 

the will states the ‘estate’ should be split in 50%, 25% and 2x 12.5% allocation, nothing specific to the house I don’t think. 

 

Ignore what your Aunt's Will says. It's irrelevant to your question, and anyway she could change it.

 

Thank you for your help

 

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Posted (edited)

If your aunt is intending to pay you your 12.5% in cash and raise the cash to do that by selling her house and buying your grandmother's house from the Estate then I can't see any problem in principle. The main issue that arises is that she is planning to sell it in her capacity as Executor to herself so there is a potential conflict of interest in setting the value of the house. The other beneficiaries should be insisting that there is an independent valuation - preferably more than one. eg HMRC, if they want the value declared for Probate confirmed, usually ask for 3 independent valuations and take the average of the three. Your aunt as Executor is under a legal duty to ensure she pays a fair open market price for your grandmother's house (open market price with vacant possession, not with your aunt living in it!).

 

Once the house has been sold to your aunt you will have received your 12.5% of the Estate in cash so it doesn't matter to you who your aunt moves into the house and what their relationship is. The house is no longer part of the Estate at that point so it's irrelevant to you as far as receiving your share of your grandmother's Estate is concerned. It might affect what happens at some time in the future when your aunt dies. But that's all academic and not worth worrying about. It could be 30 years time or more! Anything could have happened by then. And you can't do anything about it now anyway, you don't have any rights in the matter once the house is owned solely by your aunt.

 

 

Edited by Ethel Street

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Posted (edited)

Ethel Street,

 

Yes this is all as we were expecting for the sale/split of my gran’s estate. I guess the issue isn’t really for the immediacy of that. Probate is currently going through.

 

I guess it is complicated then by the fact my Aunt has no dependents, so HER estate will then be divided 50/50 between my Sister and I (her nieces, or the 2x granddaughters in this current case). We are the 2 executors of her will.  I understand that things may change between now and when my Aunt passes peacefully at the age of 103 and if she decides to change her will in the meantime. However our concern is, should something unexpected happen and her will stands as it is now, how would the lodger complicate things for us as 50/50 recipients of her estate (which would then include our grandmothers house that the lodger is living in!) 

 

We understand it’s all ‘what ifs’ but we want to ensure that we protect not only our futures, but those of our children. As she would be gone, and does the lodger have any power against her written will having lived in the property with no formal contract?!

 

I hope that makes sense.

Edited by uk2088

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Posted (edited)

I'm not a lawyer so I couldn't say whether the lodger could make any claim on your aunt's Estate (which anyway could only happen if your aunt died before the lodger). I suspect even a lawyer couldn't give an absolute guarantee about it. The law allows people who have not been left anything in a Will (or think they should have been left more) to go to court and ask the courts to give them a "reasonable financial provision" from the Estate. See this article for example - there are many other articles about it if you search online. On the face of it, from what you have said, the lodger would find it difficult to bring such a claim but it may not be impossible. The lodger might, eg, claim that he and your aunt had been cohabiting as man and wife, or that she had been maintaining him financially. I doubt there is any way you could be certain the lodger couldn't make a claim on your aunt's Estate. If you are concerned about the possibility you need to consult a specialist solicitor.

 

A different possibility is that the after your aunt's death the lodger might claim he wasn't actually a lodger but was a tenant and had tenancy rights to stay in the house, which could prevent you selling it. I don't know much about housing law but I don't believe it would ever give the lodger the right to own the house (fully or in part) but it could take you some time to get him out so that you could sell. It might be worth you having a discussion with your aunt about what legal agreement she has in place with the lodger that would evidence that he is a lodger not a tenant. There have been threads on here recently about lodger -vs - tenant. People don't always draw up 'lodger agreements' with the same care as they do tenancy agreements and that could cause a problem for you, as Executors, in the future. If there is no legal agreement you could tactfully suggest she gets one drawn up professionally.

Edited by Ethel Street
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Does he pay your aunt money for lodgings / rent (even if she then uses it for the mortgage!), or does he pay directly towards the mortgage?

 

you call him a lodger, but would he claim he is:

a) a lodger

b) a tenant, or

c) holding a beneficial interest in the property by dint of paying the mortgage directly ......

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24 minutes ago, BazzaS said:

Does he pay your aunt money for lodgings / rent (even if she then uses it for the mortgage!), or does he pay directly towards the mortgage?

 

you call him a lodger, but would he claim he is:

a) a lodger

b) a tenant, or

c) holding a beneficial interest in the property by dint of paying the mortgage directly ......

 

Very valid point.

We believe he pays her £500 towards the mortgage and bills. I would imagine he has some of the bills in his name (big gadget man & know my Aunt lets him have control over the TV/Internet provider). 

However, there have been times in the past when my Aunt has complained that he hasn’t given her any money that month...! 

I’m so thankful for everyone’s responses; we will take everything on board and broach the subject with her this week. 

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