The Intestate Estate and the House That Wasn't Hers
You are instructed to administer the estate of Alan, who died intestate. He was married to Claire for 8 years and had two children, Ben (22) and Chloe (16), from that marriage. He also had a daughter, Emma (30), from a previous relationship. Alan and Claire owned the matrimonial home as joint tenants, worth £600,000 with a £150,000 mortgage. Alan also owned a buy-to-let flat worth £220,000 in his sole name and had £40,000 in a sole account. Claire says Alan 'always said the flat was for Emma'. Emma claims she was promised the flat. Ben wants everything divided equally. The estate's liabilities include a £30,000 business loan Alan guaranteed for a friend.
1. Advise on the intestacy distribution and the effect of the joint tenancy.
Read the worked answer
The matrimonial home passed by survivorship to Claire, so it is not part of Alan's estate for intestacy purposes, although its value may be relevant to the statutory legacy calculation only if it was held as tenants in common. The estate comprises the buy-to-let flat (£220,000), the £40,000 account, and any other assets, less liabilities. On intestacy, Claire is entitled to the statutory legacy, currently £322,000 plus interest, and a life interest in half the residue; the children share the other half and any residue above the legacy. The estate appears insufficient to pay the full statutory legacy, so Claire takes the whole estate up to the legacy and the children receive the balance, if any, in equal shares. Emma is a child of Alan and shares equally with Ben and Chloe. The £30,000 guarantee is a debt of the estate and must be paid before distribution.
2. What is the status of Emma's claim to the flat, and how should the administrator respond?
Read the worked answer
Emma's claim is based on an alleged promise, not on the will or intestacy rules. A promise of this kind may found a claim in proprietary estoppel if Emma can show a representation, reliance, and detriment, but the burden is on her. As administrator you cannot simply transfer the flat to her: that would prefer her over the other beneficiaries and expose you to a claim. You should ask Emma to set out her claim in writing with evidence of the promise and any detriment. If she wishes to pursue it, she should be invited to make a formal claim or apply to court. Meanwhile, do not distribute the flat; retain it or its proceeds pending resolution. Report the claim to the other beneficiaries and consider whether the estate should defend or compromise.
3. Claire wants to stay in the home and asks whether she can use estate funds to pay the mortgage. What is your advice?
Read the worked answer
The home passed to Claire by survivorship, so the mortgage is her responsibility; estate funds should not be used to pay it unless the estate is liable on the covenant. Check the mortgage deed: if Alan was jointly liable, the lender may pursue his estate for the debt, and the estate should meet its share. If Claire is solely liable, she must pay from her own resources. Advise Claire that using estate funds to pay a mortgage on an asset she owns outright would amount to a preference and could be challenged. If the estate is liable, pay the debt from estate assets before distribution. Consider whether Claire's occupation affects the children's interests; it does not, because the home is not part of the estate.