Good morning
I have a case I have not encountered before. I did PPT wills for a couple a few years ago, I made the appropriate restriction at that time so they were TIC.
Mrs S lost capacity last year and went into care permanently. Mr S died recently.
When I spoke to the daughter, expecting to advise her on placing the TR1 after death restriction with trustees added, she informed me her parents had taken out equity release after having their wills don, unbeknownst to me…
The paperwork with the equity release states sale of house must happen within 11 months, so it looks like a restriction cannot be placed as the kids are now forced to sell. My concern is that local authority may look over at the money.
If the bens (three adult kids ) all took the remainder after the equity release paid off and say they spent it, could the local authority try and claw it back?
Should they open a trustee bank account with it in with a view to holding until the mother dies-but then she could go on for years.
Basically, my hands are tied to help this family through the will, what would you advise them to do with the sale proceeds?
Thanks in advance.
Liane
I’m afraid I don’t understand the question - in particular I’m only guessing at what PPT might stand for. (I toyed with the idea it was a typo for RPT but that didn’t help much because almost any trust except an IPDI would be an RPT in these circumstances and I still wouldn’t know its terms.)
Presumably the terms of the will you drew will apply to the deceased’s half of the proceeds of sale after the redemption of the mortgage (and presumably also to his share of the mortgage advance if unspent and unless invested jointly???). Presumably the house was disregarded for so long as he lived. Now, the survivor’s share of the equity release advance (if unspent) and of the net sale proceeds both belong to her and can in principle be applied towards her care.
If you’re hoping for a better result than that can you explain a bit more clearly what the expectation was and how you consider the equity release has changed things?
Hi Andrew
Sorry if I wasn’t clear. I thought PPT was a commonly understood terminology amongst will planners.
Protective Property Trust, as in severance of join tenancy and life interest for surviving spouse. In this case it is no longer an option as the clients went and got equity release after the wills were drawn up.
The children are forced to sell the house now but I am concerned if they spend the proceeds they end up with, the local authority may try and claw back. Wondering if they put in a trust account?
Thanks in advance
I may be missing something, but do the children have the right to spend any of the surplus sale proceeds at the moment? As stated above, one half belongs to the surviving spouse, and depending on the wording of the Deceased’s Will, might the surviving spouse have a life interest in the Deceased’s share of the proceeds?
Unfortunately, the scenario here tends to epitomise the problems with equity release schemes – those selling them rarely seem to consider the impact they might have upon the clients’ testamentary dispositions.