Splitting inheritance50/50 problem

reginaphlange

PasturesNew - thank you. You make a good point with how much all the costs may be to gain 50/50.

Another good point raised....you'll all giving me great things to think about here!....is if she had to pay me back the outstanding amount (the approx £30k) over a period of time, then she owns it outright, that could be a good compromise. Would I have to pay any additional tax on any monthly payments I could be getting from her I wonder?

I'm glad I came here to ask. Giving me lots of food for thought without the solicitor costs! Thanks

Marktheshark

Its hard I know, sister need a house, but mother did not leaver her a house, she left her half of the value of the estate.
Give her anything else and she can create quite a bit of trouble later down.

Be strong and do what the will asked you to do and what others want is unfortunate, but they should have had a work and got the will changed.

It does not stop you letting her place a bid in line with the valuation and you agreeing to hold equity on the deeds for the shortfall from your inheritance.

The document would have to be drawn up by a solicitor and can even be a peppercorn rent deed, where upon sale of the house you also gain the percentage the investment has risen as well as your investment, like property does.

Having seen such deeds, they are usually a % of a 999 share

Say if the house was worth £198,000 that is 999 shares of £198.19
999 rounds to the nearest pence and calculates back up to the nearest pence .

You would own what ever 198.19 shares your deed share buys of the property in return for peppercorn rent.
say 151.36 shares for £30k on £180,000
Sells at £300,000 years later you are owed the share value

When it gets sold, you get the sale price / you shares, so if it sells for £300,000 / 999 x 151.36 £45453.53 always works out as re-coring figure so it rounds easily to the nearest penny.

Penny's must have been very important all those years ago.


She gets her house, you get your money when its sold and the appreciation she enjoys as well of your money.
They live happily ever after.

reginaphlange

Marktheshark - So you don't think the idea of having a document drawn up which states that she must pay x amount rent/payment for a particular amount of time (until the shortfall has been paid off) would be advisable? If not, could I trouble you to suggest what the pitfalls of this could be?

I understand what you are saying about the other document being drawn up and me getting the increase in value if she sells at a later date. Could there not be a problem if she decides to never sell in my life time (we're both in our 30s at the moment)? Or is this just being a bit silly?

Really appreciate your advice and time in this matter

FreeBear

reginaphlange wrote: »

I understand what you are saying about the other document being drawn up and me getting the increase in value if she sells at a later date. Could there not be a problem if she decides to never sell in my life time (we're both in our 30s at the moment)?

For the sake of simple numbers, if we say that £30K represents 15% of the value of the property - If the deeds state that you own this share, then when you die, the 15% becomes part of your estate to be shared amongst your beneficiaries. If she goes before you, then you'd get your 15% stake when her assets are liquidated. The husband and any possible children might complicate things though...

You do need to consult a solicitor experienced in property and probate to make sure any agreement drawn up does what you want.

reginaphlange

Got it, thanks FreeBear! And yes, I'll be seeking a solicitors help at some point, regardless to the awesome advice on here

konark

You and your sister would be 'tenants-in-common' of the house she occupies with a specified share, say 80:20.

If she ever sells you get 20% of house value, if she doesn't the 20% is an asset you can pass on to your kids. Technically as you own 20% of house she should pay you 20% of a market rent for the property, although in the interests of sisterly love you may want to let her off this as long as she pays for all alterations, insurances and other costs for the house.

Making her buy the 20% from you is fraught with problems, particularly if they are on a low income. If they can get a mortgage that's fine, but if they are giving you the money personally it could be a cause for resentment.

I suppose in the final analysis whet you do will be guided by how much you like your sister or want to keep her as a friend?

System

Not forgetting that on sale the non-tenant would also be liable for CGT

Personally I think you need to abide by the will and realise ALL assets then split the remaining moneys after all debts are paid.

dancingfairy

You probably should check the wording of the will. Does it say the estate is to be shared between you or does it explicitly say that the properties are to be sold and the proceeds split between you?
I'd go to the library and have a look at dealing with estates. I believe the Which book what to do when someone dies is meant to be good (although I don't know about newer editions). Another option is to buy a book from the bookshop to start you off.
Obviously if you get a book from the library the tax thresholds are likely to be a bit out of date but it should give you enough info to be getting on with and start you off in the right direction.
It's worth getting some legal advice but you should find that a lot of it you can do yourself. A lot of the costs I believe come from writing to everyone to let them know, asking for statements on the accounts, getting them closed down etc etc, basically doing the basic administrative work. It takes a while but a lot of it is waiting for the banks/building socieities etc to get back to you.
Keep the properties in the estate whilst you sort out what's what, (so keep them in the name of 'the executors of Mrs X). Hopefully there is no immeadiate rush to sort things and the banks will be patient if you explain that you need to go through all the correct processes.
df

DandelionPatrol

Marktheshark wrote: »

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.

While it is true that as executor you must act within the law, and act according to the will, this does not preclude OP changing things in his capacity as beneficiary.

There are 2 possible ways of addressing this

• To go Tenants in Common with the sister on the property as already mentioned [OP don't forget to charge rent on your share of the property - which leads to the next idea]
• To give the whole of the property to the sister if she pays you the £30,000 - and yourself lend her the money in exchange for a private mortgage. The £30,000 does not change hands or need to exist to do this - sister has only to pay back the private mortgage.

getmore4less

!!!!!! wrote: »

Not forgetting that on sale the non-tenant would also be liable for CGT

You can solve that with a life interest(that means no rent ever).