Passing ownership over to 3 people via will. Query..?

Nine_Lives

First off, if i'm better asking this in another forum could someone either A) move the thread for me or let me know & i'll hop over to one of the other MSE forums. Thanks.

Onto the question...

My mum took sole ownership of our house last Sept after my dad died. The mortgage is fully paid off.

My mum will be doing her will once the whole probate malarkey is sorted with my dad (i've tried persuading her into sorting a will now as my dads case tells us "you never know" but she wont do it).

She says she will leave the house to us 3 (her kids) so that we have an equal share.

Now you clearly can't split 3 into 100%.

You could go 2x 33.50% & 1x 33% (example), but then someone doesn't have an equal share. Ok it may not be much, but it's not equal/fair.

*** At this point i should point out i'm not grabbing. If necessary i would take the 33% in the above example. I don't know how these things operate though.

So to those who have experienced such a situation ... how would you split the house in this case? I know we're talking very small percentages, but it's not actually the point (as such) - the point is how do you manage to split things evenly?

Thanks.

Loanranger

You split 100 by three like this: 33.33% each. Someone will get one penny less than the other two.

Nine_Lives

Loanranger wrote: »

You split 100 by three like this: 33.33% each. Someone will get one penny less than the other two.

I wasn't sure whether you could do that on a legal front as it would turn 100% ownership of a house into 3 lots of 33.33%, meaning 00.01% has suddenly disappeared.

You're talking money value by saying a penny. I'm not talking money values, i'm talking percentage ownership. I just didn't think that it would be allowed due to the lost (albeit very very small) percentage.


Still, the house would not be sold. I dare bet my brother wont care a great deal & would probably prefer the value of his percentage in his bank account.
My sister & I on the other hand wont want the house sold. i know it can be argued that peoples minds change, but it is extremely unlikely, especially for myself.

G_M

Why pass the house to the 3 kids?

Are there any other assets/investments/savings?

Will your mum's estate (her total assets less debts) be liable for Inheritance Tax? If so, are there other assets available in the Estate to pay the IT? If not, the house will need to be sold to pay the tax.

Far easier to simply leave the remainder of her estate (the house if it is still there, or the cash from its sale, plus other savings etc) to the 3 kids equally.

The decision about keeping/selling the property can then be made at that time, depending on the financial position of mum's Estate as a whole, and the preference of the Beneficiaries at that time.

But my advice is for your mum to talk through the options, and tax implications, with a solicitor, preferable a real solicitor NOT a bank or 'will specialist'. And never appoint a professional as Executer - you cannot anticipate/control their future fees. If you need a professional later to help with probate, the Executers can employ one at the time.

There are several charities who will pay selected solicitors to advise and draw up a will totally free - provided the will includes a legacy to that charity.

Loanranger

Ah, apologies, I assumed house would be sold. Sorry.

G_M

K_P83 wrote: »

I wasn't sure whether you could do that on a legal front as it would turn 100% ownership of a house into 3 lots of 33.33%, meaning 00.01% has suddenly disappeared.
.

There are two ways a property can be owned:

1) Joint Tenants
Typically couples own their home as joint tenants. This means that both own the whole of the home. But it can apply to three people too. If one dies, the remaining one (or two) then continue to own 100% between them.

2) Tenants in common
each owns a set share – this can either be half each, or a defined percentage (eg 33.33% each). If one later dies, their 'share' passes according to their own will, or the laws of intestacy if there is no will.

See here

cte1111

You would each own a third. There is no need to worry about the fact that in decimals this equates to 33.333333333333333333333333%.

However, not sure that 2 people could prevent the third from forcing a sale.

paddedjohn

K_P83 wrote: »

I wasn't sure whether you could do that on a legal front as it would turn 100% ownership of a house into 3 lots of 33.33%, meaning 00.01% has suddenly disappeared.

You're talking money value by saying a penny. I'm not talking money values, i'm talking percentage ownership. I just didn't think that it would be allowed due to the lost (albeit very very small) percentage.


Still, the house would not be sold. I dare bet my brother wont care a great deal & would probably prefer the value of his percentage in his bank account.
My sister & I on the other hand wont want the house sold. i know it can be argued that peoples minds change, but it is extremely unlikely, especially for myself.

The proceeds of the house after expenses would be split 3 ways and if the amount left is divisible by 3 then there wont be any unequal shares, exactly the same scenario can arise with 2 recipients or 4/5.
Alternatively your mum may decide to sell up and downsize and spend the spare cash on holidays.

DVardysShadow

cte1111 wrote: »

You would each own a third. There is no need to worry about the fact that in decimals this equates to 33.333333333333333333333333%.

Even that leaves
0.000000000000000000000001% of the property unaccounted for.

It is just one of those things about fractions that you cannot split it X ways and denominate it in fractions of base Y unless X and Y share a common factor.

So why not just denominate it in 1/3 rds rather than %?

googler

Total madness to leave a house to three relatives anyway. It'll just lead to conflict over who wants to move in/buy the others out/rent it from the others

Far better to specify in the will that the house be sold by the executor, and the proceeds divided three ways.

Unless you really WANT to be organising a three-way sale once you get a third of the house? Unless two of you WANT to be landlords to the third?

roger196

Whilst I am not clear how the mother inherited the house ie by will or by survivorship, the following protects the assets against care home fees.

Why not consider a deed of family arrangement. This allows the re-writing of the will up to two years after the date of death. The surviving spouse is given a life interest in the trust, which can then be wound up on her death. A clause could also protect against bankruptcy of any of the children. see Q on inheritance in bankruptcy thread.

You will need to a solicitor competent in this area for a quote for the paperwork.