Case Study
‘My wife was 20 years my junior. Her death left me on the verge of being homeless’
Couples who have a large age gap between them are being warned of the dangers of assuming the older spouse will die first after a bereaved husband faced having his house repossessed following the death of his younger wife.
Colin Bywater, an 83-year-old retired businessman, was heartbroken when his wife, Leonora, 20 years his junior, died suddenly from cancer last year.
He then faced losing his house in Pontefract, W Yorks, which he had designed 25 years earlier, because of loopholes in his wife’s estate planning.
He said: “I lost my wife and within four months I lost my brother, who I had been very close to. It was a very emotional time. But I was determined for the house not to be repossessed. I want to live in this house for the rest of my life. I built it.”
One issue was how to unravel common-sense but flawed financial plans that left Mr Bywater no way to pay the remaining £230,000 debt on the property when his wife died.
Because of his age, when Mr and Mrs Bywater needed to raise money against their home in 2015 they remortgaged with Saffron Building Society in her name only.
A “deed of trust” was created to give Mr Bywater a lifetime interest in his home. It also gave him the right to inherit once his late wife’s estate was settled.
However, settling the estate could not take place without Saffron being paid the full outstanding mortgage of £230,000, a sum that Mr Bywater did not have in savings. Without repayment, the building society threatened repossession. It was a situation he had not planned for, believing he would die first.
To make matters worse, because the legal title of his home was in his late wife’s name, Saffron would deal only with the solicitors for the executor of her estate, which was her daughter from a previous marriage.
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“When my wife made her will it neglected to plan for what would happen if I survived her. But you cannot guarantee that someone older than you will cash in their chips first,” Mr Bywater said.
While he sought a way to pay off the mortgage in full, he was forced to make repayments by passing money to his solicitors, who handed it to his stepdaughter’s law firm, which then paid Saffron. This continued each month from the time of his wife’s death. “It seemed ridiculous,” he said.
To resolve the matter, he tried to borrow against the property using equity release. This created a further problem: Legal & General (L&G), the provider, was prepared to pay the released funds only to Saffron, but the building society stuck by its rules and refused to deal with any party except the executor’s solicitors.
Steve Paterson of the Money Group, Mr Bywater’s financial adviser, said: “It was almost a chicken and egg scenario with two lenders and four solicitors not agreeing on a way forward. I was on the phone almost daily with Colin for three months to try to resolve the situation.”
Eventually, the parties reached a deal and Saffron agreed to accept the funds from L&G’s solicitors. Mr Paterson said: “I finally resolved it by explaining in no uncertain terms that Colin would lose his home if common sense did not prevail.”
Mr Bywater said: “Steve worked very, very hard. I think he is a bit of a hero. I couldn’t thank him enough.”
With the money from the equity release plan, Mr Bywater was also able to buy his late brother’s flat for his sister-in-law, saving both his own home and hers. “I don’t want to be held up as a victim, but I want this to help warn others,” he added.
Mr Paterson said the lesson was not to make assumptions and always plan for the unexpected.
“Sometimes inheritance tax planning and trusts can come with huge implications and unforeseen barriers when life flings a curveball,” he said. “Give very careful consideration before transferring legal titles.”
For couples with a large age gap, he recommended a complete review of whatever existing financial plans each spouse had in place. Had Mrs Bywater taken out life insurance, for example, the payout could have been used to clear the mortgage on her death.
A spokesman for Saffron said: “We accept this was a complicated situation. We are committed to acting in accordance with the regulations, and will always take a pragmatic approach where appropriate to do so.”
An L&G spokesman said: “Most lifetime mortgages are straightforward. The average time from offer to completion is 31 days. On occasion, cases can be more complex and may take longer.”