Advice on inheritance offer

getmore4less

You could dig in and insist on the deal as described by your sister.

I suspect she would be coming to live with you.

Kynthia

spadoosh wrote: »

Dont think its that bad an offer really.

Inflation is how much stuff increase in price year on year. So a loaf of bread cost £1 now and in a year with inflation (2%) will cost £1.02.

Basically hes saying they want to lend you £25k and recieve the equivalent amount back as and when inheritance becomes available.

As an example.

Based on you borrowing the £25,000. With that you could buy a new vauxhall zafira. Essentially they want to be able to buy a new vauxhall zafira as and when your mother inheritance becomes available. The issue being that the zafira might have increased in cost to £30,000, still buying the same amount of things but essentially money becomes less valuable over time.

I suppose it is interest but its unfair to say they're making any money out of you more theyre preventing their money losing value (fwiw they could earn more having it sat in a standard saving account compared to lending it to you.)

If you wanted to be a bit crafty. Borrow the money @ 2% inflation and stick it in a savings account paying more than 2%. Then you could earn money off their money.


Ignoring the issues of lending between relations, youll be hard pushed to borrow money cheaper.

I agree with this. It's good terms and they aren't profiting from you but ensuring their money doesn't devalue over time.

However it's not been handled the best way as this mix of casual and business terms leaves you unclear. Who agrees what inflation was and what if you disagree with the rate used? Plus it's not been discussed what happens if there is no inheritance for some reason which leaves your sister at risk of not getting her money back and possible bad feeling if she's not happy with that and expects you to repay by some other means (but can't make you)?

How much do you want this money now? If you do then get things agreed more formally and discuss various outcomes. If not then don't put your relationship at risk as money tends to do that.

rollerball

Thanks so much for these replies, its really good to know that I am getting really considered and honest advice here.

To clarify a point that's come up a few times - my mother plans to put her property in both mine and my sisters name and is currently starting that process. She's reluctant to comment on this matter, saying it's nothing to do with her.

getmore4less

rollerball wrote: »

To clarify a point that's come up a few times - my mother plans to put her property in both mine and my sisters name and is currently starting that process. She's reluctant to comment on this matter, saying it's nothing to do with her.

She is right a deal between you and sis where her hubby thinks she should be changing her will involves far too much control.


As for the house going into your names, that is very rarely a good idea if she plans to stay living there are you don't plan to live there.

rpc

rollerball wrote: »

my mother plans to put her property in both mine and my sisters name and is currently starting that process

Danger Will Robinson!!!

It is (usually) a very silly thing to do http://www.saga.co.uk/magazine/money/personal-finance/giving/what-you-need-to-know-about-signing-property-over-to-your-children#

It always sounds like a good idea, but once you understand the tax (and possible care home fee) implications it turns out as not being so sensible.

NB this assumes your mum lives there and intends to continue to live there. If mum is moving out or non-resident then most of the usual advice doesn't apply and it is more like making a gift.

gettingtheresometime

rpc wrote: »

Danger Will Robinson!!!

It is (usually) a very silly thing to do http://www.saga.co.uk/magazine/money/personal-finance/giving/what-you-need-to-know-about-signing-property-over-to-your-children#

It always sounds like a good idea, but once you understand the tax (and possible care home fee) implications it turns out as not being so sensible.

NB this assumes your mum lives there and intends to continue to live there. If mum is moving out or non-resident then most of the usual advice doesn't apply and it is more like making a gift.

Not to mention if either sister or OP (God forbid) pre deceases the Mum or divorces

Mojisola

getmore4less wrote: »

As for the house going into your names, that is very rarely a good idea if she plans to stay living there are you don't plan to live there.

Very true.

OP - research inheritance tax, capital gains tax and deprivation of assets.

Gigervamp

Send the money back.

Also, regarding mum's house being put in your names, does she realise that if either of you divorce, the ex will be entitled to 50% of yours/your sisters share?

duchy

Gigervamp wrote: »

Send the money back.

Also, regarding mum's house being put in your names, does she realise that if either of you divorce, the ex will be entitled to 50% of yours/your sisters share?

There's also some pretty big tax implications in also owning a house that isn't your primary residence.

pickledonionspaceraider

I would want no part in this, and would return the funds, as it is hassle in the making