A residence is owned by spouses as tenants in common and is subject to an equity release mortgage where interest accumulates. On the first death the spouse has a normal right of occupation subject to payment of outgoings. On the second death, how is the accumulated interest dealt with as between the remaindermen of the life interest trust and the second spouses estate. Is the estate of the spouse with the life interest liable for all of the accumulated interest from the date of the first spouse’s death, or does liability for repayment of the mortgage attach to the property and therefore fall on the remaindermen and the second spouse’s estate equally?
Richard Griffiths and Co