A law question about a joint bond

[Humberto]

Consider the following illustrative example:

Two close family members, Anne and Brian, are co-owners of a R 1 million house with an outstanding bond of R 400 K for which they are jointly and severally liable.

Suppose now that Brian becomes deceased intestate.

Question 1: Does Anne then become liable for the R 400 K bond? Or is the bond "frozen" until the estate of Brian has been sorted out?

Suppose the house is then sold as part of the execution of the estate of Brian.

Question 2: Is 50 % of the outstanding bond (roughly R 200 K in the above example) settled from the estate of Brian, with Anne being liable for the other 50 %?

Question 3: Is the profit that comes out of the sale of the house (roughly R 600 K in the above example) divided equally between Anne and the estate of Brian (since Anne was a co-owner of the house), i.e. half of it going to Anne, and the other half going to the estate of Brian?

Suppose moreover that the master of the court decides that due to the close familial relationship between Anne and Brian, that 66 % of the estate of Brian must go to Anne.

Question 4: In addition to Anne's 50 % of the profit from the sale of the house, will she also get 66 % of the profit of the sale from the estate of Brian, i.e., roughly R 300 K + R 200 K = R 500 K in total (the R 300 K being Anne's share of the profit from being a co-owner, and the R 200 K being her share of the profit from being a 66 % beneficiary of the estate of Brian)?

 

[Rocket-Boy]

Anne and Brian draw up a contract covering those eventualities at the time of purchase, no guess work is required afterwards.
The end.

 

[Humberto]

Anne and Brian draw up a contract covering those eventualities at the time of purchase, no guess work is required afterwards.
The end.

Joint and several liability trumps any contract drawn up between Anne and Brian.

I think the bank will hold Anne fully liable for the remaining bond. At best Brian could have specified in his testament that his share of the bond is eventually to be reimbursed to Anne as part of the execution of his estate.

But in the example I gave, Brian is already deceased, so it's too late for that.

 

[maumau]

Why didn't Brian have a policy in place that pays his house debt when he dies? Anne should have insisted.

 

[Humberto]

Why didn't Brian have a policy in place that pays his house debt when he dies? Anne should have insisted.

Let's say that in the example above, Brian was unable to get life insurance due to his advancing age, and Anne was willing to enter into the transaction with Brian because she wanted to help him.

 

[ponder]

Is Anne hot?

 

[Humberto]

Is Anne hot?

Yes, very. Guys like you get burned by women like her.

 

[genetic]

Every time I see a thread created by Humberto, I can't but believe it's a BS thread.

 

[Beachless]

Brian and Anne are 2 seperate entities if Brian had died his estate would own half of the house and half of the bond and whomever was named in his will would then be the owner of half the house and be liable to half the bond.
This is why banks often insist on life insurance.
If brians share were to be auctioned off whomever buys it would own a share in the house but I am sure the bank would offer Anne the opertunity to buy back the other half because at auction it would likely fetch a low ammount.

 

[Humberto]

Every time I see a thread created by Humberto, I can't but believe it's a BS thread.

The BS is all in your mind.

 

[Humberto]

Brian and Anne are 2 seperate entities if Brian had died his estate would own half of the house and half of the bond and whomever was named in his will would then be the owner of half the house and be liable to half the bond.
This is why banks often insist on life insurance.
If brians share were to be auctioned off whomever buys it would own a share in the house but I am sure the bank would offer Anne the opertunity to buy back the other half because at auction it would likely fetch a low ammount.

The beneficiaries of the estate would not be liable for half the bond. The estate itself may be liable for half the bond (that's what I'm trying to find out) but that debt can never become the debt of the beneficiaries. At worst they will simply inherit a smaller portion of the estate once the bond has been settled.

 

[maumau]

Anne should immediately pay off her balance of R200 000 and hang on for dear life.

 

[FlashSA]

I am not an attorney, nor an accountant, but as far as my knowledge of death law goes, Brian's estate must settle all debt before the remaining cash gets split according to his will.

So, the joint bond will be settled in full from cash \ asset sales from Brian's estate. The problem for Anne is that the estate is going to want a slice of that settled house now that the debt is settled. I am not sure how that is going to work. Without a written contract or agreement, Anne stands to lose out as she may need to pay Brian's estate 50% of the current value of the house in order to keep it and not have it sold as part of the estate wrap-up.

 

[christoh]

I have a question down those lines - but slightly different.

Husband and wife married - own two properties - joint ownership.
Properties are paid in full - worth around R2million. Should the estate taxes be 50% of the two properties - so calculated at 3.5% of 1 million or should it be 3.5 % of 2 million?

The question is based on the husband passing away - and what executer fees are the surviving wife liable for ?

 

[Pitbull]

Consider the following illustrative example:

Two close family members, Anne and Brian, are co-owners of a R 1 million house with an outstanding bond of R 400 K for which they are jointly and severally liable.

Suppose now that Brian becomes deceased intestate.

Question 1: Does Anne then become liable for the R 400 K bond? Or is the bond "frozen" until the estate of Brian has been sorted out?

Suppose the house is then sold as part of the execution of the estate of Brian.

Question 2: Is 50 % of the outstanding bond (roughly R 200 K in the above example) settled from the estate of Brian, with Anne being liable for the other 50 %?

Question 3: Is the profit that comes out of the sale of the house (roughly R 600 K in the above example) divided equally between Anne and the estate of Brian (since Anne was a co-owner of the house), i.e. half of it going to Anne, and the other half going to the estate of Brian?

Suppose moreover that the master of the court decides that due to the close familial relationship between Anne and Brian, that 66 % of the estate of Brian must go to Anne.

Question 4: In addition to Anne's 50 % of the profit from the sale of the house, will she also get 66 % of the profit of the sale from the estate of Brian, i.e., roughly R 300 K + R 200 K = R 500 K in total (the R 300 K being Anne's share of the profit from being a co-owner, and the R 200 K being her share of the profit from being a 66 % beneficiary of the estate of Brian)?

They will sell the estates 50% with her as the first option to buy it out. Remember the estate is still entitled to 50%. Unless that was allocated to someone in his will. If no will, she should start shopping for loans so long to buy him out.

 

[desiganp]

I have a question down those lines - but slightly different.

Husband and wife married - own two properties - joint ownership.
Properties are paid in full - worth around R2million. Should the estate taxes be 50% of the two properties - so calculated at 3.5% of 1 million or should it be 3.5 % of 2 million?

The question is based on the husband passing away - and what executer fees are the surviving wife liable for ?

Far as I know - the value is the TOTAL value of the JOINT estate. Also 3.5 % is the MAX fees allowed - you should negotiate with the executor the fees payable, banks etc normally charge the full amount unless agreed to in advance.

If either of the properties was inherited by the surviving spouse and was specifically excluded from the matrimonial system (by the person who left it to her) then it will be excluded from the value of the estate.

 

[Ninja'd]

Every time I see a thread created by Humberto, I can't but believe it's a BS thread.

Like I previously stated, the guy is okay at times.