Advice on inheritance offer

Keep_pedalling

Far to complicated and far too many things that could go horribly wrong. I don't understand why they want money back they don't need,

You mother should to take urgent independant advice before she gives her main assets away. If this has been done to avoid care home costs (and I can't think of another reason to do this, as maintaining a benificial interest does not protect you from IHT) it probably won't work because it would be classed as depreciation of assets, but even if it did would you want her to have no choice if she needed care in the future?

Pollycat

rpc wrote: »

They are married, no such division of assets.

I suspect he sees it as his money and while he is prepared to share it with his family and wife he is rather more reluctant to share it with his wife's family who mean rather less to him.

I think that sort of position is understandable, but whether the gifts/loans are under the same terms is largely irrelevant to OP's position.

My comments were made from the morality perspective rather than legality.

It my be largely irrelevant but if I were the sister of the OP, there's no way I'd agree to my OH's brother being gifted a sum of money and then offering a loan to my sibling with all sorts of tagged-on conditions attached.

onlyroz

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.

This "matter" is entirely your mum's business as it's her assets that are being played fast and loose with. And is this delightful brother-in-law also the bright spark that came up with the idea of your mum gifting her house to you and your sister?

peachyprice

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.

Ok, this makes no sense. If the house is signed over to you and your sister now, there is no inheritance with which to pay pack the loan, your mother can't will your sister a larger share of a house she no longer owns!

SandC

I would advise your mother to take some advice from a professional on the savviness of transferring her home over to you and your sister.

So far as the £25k goes, I too think that's a good enough deal. Your BIL is a business man and he will be used to thinking in terms of business deals and all he is doing with this loan from what I can tell is ensuring that if your mother lives another 30 years that they will be getting back the same value as they lent.

You've said yourself now that you don't know the terms of the amount given to his brother and you should therefore disregard this. Chances are exactly the same terms were given, who knows?

In real terms you never really know what's going to happen with regards to your mother's property, whether care will be required etc. that is something nobody can predict. So either you give the money back in full now or you go with it, accept the terms on the inflation and trust that you sister and brother in law are just doing you a favour. Ideally yes it would have been a gift but that's a very generous gift from a sibling so...

TBagpuss

AylesburyDuck wrote: »

Cancel the builder and return the funds. As it wasnt what was agreed with your Sister and the deal has now changed and is not to your likeing.
Their is no need to take the offer up OR fall out about it.

This.

I think what her husband is saying is that he sees it as a loan - if mum's house is currently worth £200,000 thne £25,000 = 12.5% of its value. So he is saying that when you inherit, you would be expected to pay thm 12.5% of what the house was worth at that time (or around 25% of your haf share)

None of us can know for sure what house prices will do in the future but this could potentially turn out to be more expensive than borrowing the money another way, if house prices continue to rise.

It sounds as though your sister didn't discuss it fully with her husband, she offered you an interest free loan, he is offering you a loan with interest tied to the value of your mum's house. The value you would pay back would have a similar buying power *for buying property* as £25,000 does now, but of course property prices have, in the recent past, incresed much faster than other costs of living, so if that trend continues, what they get back would potentially be worth much more in buying power if they were going to use ot to buy anything except property!

You might find it helpful to look at a couple of examples to see how much yuou would have to pay back based on different potential values of your mum's house.

You may decide that it would be more cost effective for you to borrow the money in a more conventional way - have you looked at the cost of additional borrowing on your own mortgage, by way of comparison?

Homeownertobe

TBagpuss wrote: »

This.

I think what her husband is saying is that he sees it as a loan - if mum's house is currently worth £200,000 thne £25,000 = 12.5% of its value. So he is saying that when you inherit, you would be expected to pay thm 12.5% of what the house was worth at that time (or around 25% of your haf share)

None of us can know for sure what house prices will do in the future but this could potentially turn out to be more expensive than borrowing the money another way, if house prices continue to rise.

It sounds as though your sister didn't discuss it fully with her husband, she offered you an interest free loan, he is offering you a loan with interest tied to the value of your mum's house. The value you would pay back would have a similar buying power *for buying property* as £25,000 does now, but of course property prices have, in the recent past, incresed much faster than other costs of living, so if that trend continues, what they get back would potentially be worth much more in buying power if they were going to use ot to buy anything except property!

You might find it helpful to look at a couple of examples to see how much yuou would have to pay back based on different potential values of your mum's house.

You may decide that it would be more cost effective for you to borrow the money in a more conventional way - have you looked at the cost of additional borrowing on your own mortgage, by way of comparison?

But this isn't what he's doing. He's linked it to inflation in cash terms, so nothing to do with the price of the house.

It seems pretty clear to me, though what's staggering is how many people think the OP has an entitlement to someone else's money.

Pollycat

Homeownertobe wrote: »

But this isn't what he's doing. He's linked it to inflation in cash terms, so nothing to do with the price of the house.

It seems pretty clear to me, though what's staggering is how many people think the OP has an entitlement to someone else's money.

Staggering?
Really?

I can't see many posts saying that.

I can see a sister offering her brother a loan with certain conditions for repayment and a BIL who has changed the goalposts:

rollerball wrote: »

My sister clearly felt that this favour should go both ways so called me a few months ago with a proposition: They could give me a lump sum of cash now (£25k) on the proviso that when my mother dies and we inherit her estate 50/50, she gets £25k more than me.

You make it sound like the brother initiated the discussion about the loan.
He didn't.

I think the OP has an entitlement not to be shafted by his (shifty-sounding) BIL.

getmore4less

SandC wrote: »

So far as the £25k goes, I too think that's a good enough deal. Your BIL is a business man and he will be used to thinking in terms of business deals and all he is doing with this loan from what I can tell is ensuring that if your mother lives another 30 years that they will be getting back the same value as they lent.

If the hubbys loan agreement is tied to the house/inheritance on death of the mother and he does not cover the scenario where the house no longer exists and/or the house is handed over now it becomes a very good deal.


As it currently stands this is a disaster in the making.

Jamiesmum

Families and money don't mix. Especially when it's technically 'his' money - what if they split? Is your agreement with her or him?

For the sake of some home improvements it's not worth it. You'll be living knowing they bailed you out and they could probably use this against you at any point and create massive hostility. Unfortunately as much as you and your sister may love each other - money changes things very quickly when it's changed hands.

Send it back and offer your thanks but you can't risk messing with your (and your childrens?/husbands) future because of some home improvements.

You never know - when your mum does pass your situation may have drastically changed, and every little will help by then.