Splitting inheritance50/50 problem

reginaphlange

Hi, and first of all, yes I know I will need legal advice, just interested if anyone has any advice or experienced this...

Mum recently died leaving everything 50/50 between me and my sister (as outlined in her will). Mum has two properties, one slightly higher value than the other. The estate will be eligible for IHT.

Here's the problem. My sister lives in one of her properties (has done for a while). She is now planning on moving into the slightly lower value one. After all the deductions and IHT has been made, the house that she will live in will be more than her 50/50 share. So what do I do? We're most likely talking of a shortfall of approx £30k

She is in no position herself to get a mortgage. If we sell both properties and share the "profits" 50/50, she won't have enough to by herself and family another home in the area she is in.

I'm finding this very concerning. My Dad (separated from my mum some time ago) has indicated to me that I will just have to deal with not getting a 50% share :undecided

Hope this all makes sense.

Anyone have any experience of anything like this? Thanks

PasturesNew

If you are comfortable enough, you could let her stay in it, with a legal document saying you own X% of it. Or, let her have it.

How much adrift is the value of the cheaper house?

reginaphlange

Thanks PasturesNew.

I'd probably be "losing" £30k+. I'm not out to profit, but its a substantial amount of money to me and my family. There are also other deeper rooted issues with how selfish my sister has been, which I know is a personal thing, but my sister has always been about the money. I guess these factors make me feel uncomfortable about letting her just have it.

I could have a document drawn up. Good suggestion. My reservation would be what if she never moves out? But its the best suggestion to date so thank you

ViolaLass

Are you in a position to lend her £30k and have her pay it back e.g. £100 a month?

Marktheshark

Who is executor ?
They should really evict her and sell both houses and split the cash.
Anything is else is failing in duties to the beneficiaries
Wishes are hot air and hear say, the will is legal.

If she wants one of the houses, she will have to buy it like everyone else.

reginaphlange

Marktheshark, thank you for your comment. I am the executor, my sister has also been named as one but isn't going to take on the responsibility.

As I've already said, if I was to do as you've suggested (which I have been tempted!) in effect it leaves my sister and her family homeless. Their only option would be to rent somewhere until her share of the inheritance money runs out. Her and her husband are both on low incomes. My obvious fear of this would be losing contact with my sister (as I can't imagine her taking favourably to the suggestion) and possibly my Dad (for the same reasons).

Why does this have to be so difficult at an already difficult time?!

Marktheshark

As executor you act as a Legal Third party.
In those duties you have to act within the law .
As that third party you have to be independent of family feelings and wishes and execute the will as or is written.

If the will says split 50/50 then assets have to be sold and the money split.
The executor sells the houses and the IHT is paid and any other debts and the remainder is split.


If you feel unable to do the task at hand, appoint a solicitor to administer the estate.

If anyone was meant to get a house, the will should have expressly said.
Nobody gets to chose which house they want to live in, the executor has absolute responsibility to adhere to the will.

If she wants a house, you should let her bid for it and then acting as yourself not the executor, you have to get the two hats thing understood, you can offer her either a gift from your inheritance as an allowance to make up the shortfall.

You really need to be on the ball or she can make trouble later on.

Yes there will be trouble, but death and money always bring that unfortunately.

Start with a valuation of all assets and property, you will need one for the probate office anyway.

reginaphlange

Thanks again, you make a lot of sense and guess I have to seek some legal advice and develop a thicker skin! I understand the role of executor and understand that I have to stick the letter of the law and will.

You saying to getting the two hats understood is really good and something that I will be saying to her too.

Thanks, I agree with you.

theoretica

The simplest result would be for her to get a mortgage - at £30k this would probably be a very low loan to value and more possible than you might think. Could you go and speak to a mortgage broker together? Or the experts on the mortgage forum here would be able to give a probable yes/no.

Otherwise you could register the property in both your names as a % each - you would need to agree about paying for upkeep, repairs etc and if she was going to pay rent on your portion. But who knows when she would sell.

PasturesNew

For £30k, with the sister being all about the money, I'd be tempted to go down the X% ownership route, with some way for her to repay that over time. With the incentive of full ownership they might get their finger out to get the money together somehow in the next 10 years, or a monthly repayment might suit their pocket.

If you start trying to "demand" 50/50 and putting it in the hands of a solicitor it might cost £10k for solicitors and another £10k for your sister to sort herself out by, say, buying a smaller property and the agent/solicitor fees for a sale, so the inheritance wasn't gobbled up in rent.....

So, on the balance of things, it'd make more sense for that "wasted" £20k to be retained and for the £30k owed to be resolved amicably.

reginaphlange

Thanks theoretica. I can't see how she'd get a mortgage. Both her and her husband work part time and temporary. They both have very poor credit.

But....I guess it could be worth a look??

I just don't think that she's being realistic, thinking that she'll just get a house. Saying that, she did think a while ago that she could transfer a mortgage from mums name to her name just by writing a letter to the loaners a while ago!

Thanks for your advice