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Probate Granted - Can Executor of Will Remortgage Against House?

Discussion in 'Wills and Estate Planning Law Forum' started by Chloe2u, 29 August 2014.

  1. Chloe2u

    Chloe2u Active Member

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    Once probate is granted can the Executor of a will remorgage against the house which is fully paid off? Or does the executor have a legal obligation to sell the house to divide the shares to Benefactors.
     
  2. winston wolf

    winston wolf Well-Known Member

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    That doesn't sound right to me.
    Are you saying this has happened? If so what is the money to be used for? Is there a challenge to the will?

    As to the distribution to the beneficiaries.
    That depends on the wording of the will, but most likely if nobody has a right to reside in the home it is sold and distributed.
     
  3. Chloe2u

    Chloe2u Active Member

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    No this hasn't happened but I'm worried as Executor hasn't applied for probate yet but is currently stating she can remorgage against the house and is currently discussing building on the back of the property with a sibling of mine so I was wondering if she can do that. No one has seen the the will but in process now of trying to obtain it. When probate is granted can she remorgage without all benefactors permission?And does title go only in Executors name or all benefactors?
     
  4. winston wolf

    winston wolf Well-Known Member

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    I doubt a bank would give a mortgage on a home like this.
    In truth, until you have a copy of the will you are just guessing.
     
  5. Sarah J

    Sarah J Well-Known Member

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    Hi Chloe2u,

    Generally, an executor should not be dealing with any of the testator's (deceased person) property until probate is granted. This is because, the court must decide whether the will is the valid and final version and whether the appointment of the executor (and beneficiaries) was not done under suspicious circumstances or under any other factors that might suggest lack of testamentary capacity (i.e. the testator did not make the will out of his or her own free volition).

    In regards to whether or not the executor can remortgage the house, was the house left to the beneficiary "free of all charges"? If so, the beneficiary takes the house (assuming probate has been granted) and the executor must raise the repayment of the mortgage some other way.

    Why is the executor trying to remortgage the house? Is it to pay off funeral expenses, administrative costs, debtors etc?

    As Winston said, you really do need to get a copy of the will. As a beneficiary, you are entitled to request a copy of the will.
     
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  6. Chloe2u

    Chloe2u Active Member

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    Thanks for reply Sarah J I've already had a senior paralegal write a request for copy of mums will but Executor hasn't responded within the 7 days given.Executor won't even communicate with me so I'm grappling weather to take further action and apply to the court for copy of will. Since Executor is my sister I really don't want to take her to court. Mum left house to 8 siblings but currently one sister is living in property. I think Executor wants to remorgage so that my brother can build on back of property. But what about the other 6 Benefactor's I feel its very unfair especially when she's not doin the right thing by replying to my request of copy of will. Can she get away with not applying for probate? don't know what to do? Mum passed away in May 2014 so I think she has 12 months to apply for probate. If she has title to house can she sell or loan money against house? Your opinion would be greatly appreciated Sarah J.
     
  7. Rod

    Rod Well-Known Member

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    Remind your sister that as an executor she now has certain legal obligations to fulfil. If she ignores those obligations or acts contrary to those obligations she becomes legally responsible and any legal action she defends may come out of her pocket, not the estates, if she has done the wrong thing. Might be best to talk to her first and then send a follow up email with your concerns and the results of your talk. If she doesn't want to talk, still send an email with your concerns. Keep it factually, to the point and ensure there is no emotion or family history in the email. The will is what is important, not past problems.

    Also read here: https://www.statetrustees.com.au/deceased-estate-administration/the-role-of-the-executor
     
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  8. Sarah J

    Sarah J Well-Known Member

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    Hi Chloe2u,

    No, the executor cannot remortgage the house, even if she has title to the property, unless the Will gives her power to. However, the Will should have a provision where any actions taken that affects estate property, including the house, must be made in the best interests of the beneficiaries. If the house is left to 8 beneficiaries, the executor must consider the interests of all 8 beneficiaries, not just one. Certainly, remortgaging so that one brother (presumably, a beneficiary) can build a structure on the property, is NOT allowed. One of the (many) reasons is because the beneficiaries may choose to sell the property and split the profits, provided the Will allows for this.

    Again, it is very difficult to advise without knowing what is written in the Will. This is because the executor's powers come from the Will and not from the grant of probate afterwards. However, the executor should not be dealing with estate property before a grant of probate, unless there are immediate pressing matters or the Will provides for an immediate legacy/gift. Even if the Will provides for an immediate legacy/gift, the executor should still wait for probate because there is a possibility that the Will is not valid, or the provision she is effecting, is not valid.

    Anything the executor does, before a grant of probate, may render the executor personally liable if it is later found out that this was not in accordance with the Will, an improper exercise of executive power, the Will or its provisions are invalid. And as @Rod says, her legal costs to defend against such actions will not come out of the estate but be personally born by her.

    In short, your sister would most likely be misusing the title deeds.
     

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