Inheriting 75 percent of a property

cymruchris

My dad recently passed away not that long after my mum, and the original wills they had in place before mum's passing was that when the first partner passed away 50 percent of the property would be 'inherited' in equal shares by both children (whereby a charge is put on the property deeds), and when the second partner passed, the same would happen so that each child had 50 percent of the property in total. Something considerable happened between Mum's passing and Dad's passing which made him change his will so that when he passed, his 50 percent would only go to one child, which has resulted in the situation where there's a 75/25 split.

I'm yet to speak to the solicitor in detail - but would be interested to find out if anyone has been in a similar situation as to how the 25 percent share is valued, and whether it could be bought out following a formal process - or whether it's more of a negotiation and then hopefully an agreement, but if an agreement fails to be reached does it become a forced sale?

What's the usual process that families follow when more than one relative inherits a percentage of a house.

I know the option could be to sell it - and split the proceeds accordingly.

But I'm wondering what the option might look like in terms of gaining 100 percent share through the 25 percent buyout - whether there's a formal process that gets followed in terms of deciding what that value is, or whether it's very much hit and miss, and depends on what mood their in. 

xylophone

What's the usual process that families follow when more than one relative inherits a percentage of a house.

There is no "usual process".

Is the house still registered in the names of both parents?

Keep_pedalling

The house will need to be valued for probate, so that should cover that issue. The rest is down to negotiation, which can be tricky where one sibling has been cut out from an inheritance. 

getmore4less

Who are the executors?
They get to deal with this.

The starting point is often does anyone want to keep the house?
if one can they afford to buy the other out(or swap house for other assets in the estate).
If two can they agree on bot being owners(that usually depends on the reasons for wanting it)

the absolute inheritance with charge can have issues with CGT  but with close passing that may be mitigated by DOV or even covered by the annual exemptions.

We can only guess that things may not be straightforward especially if the "something"  has caused issues between the siblings.

Joint ownership often comes with issues that can make the situation not work longer term.

Marcon

cymruchris said:

I'm yet to speak to the solicitor in detail - but would be interested to find out if anyone has been in a similar situation as to how the 25 percent share is valued, and whether it could be bought out following a formal process - or whether it's more of a negotiation and then hopefully an agreement, but if an agreement fails to be reached does it become a forced sale?

Yes, although see my comment below re executors.

cymruchris said:

What's the usual process that families follow when more than one relative inherits a percentage of a house.

I know the option could be to sell it - and split the proceeds accordingly.

But I'm wondering what the option might look like in terms of gaining 100 percent share through the 25 percent buyout - whether there's a formal process that gets followed in terms of deciding what that value is, or whether it's very much hit and miss, and depends on what mood their in. 

House is valued either by surveyor qualified to do the job, or by taking an average of 2 or 3 estate agent valuations. If you and your sibling agree the value, you then agree a way forward (possibly use other assets from the estate to pay out their share, or if there aren't adequate assets to do that, you pay them).

If you can't agree, the property will be sold and the proceeds split in the relevant proportions. It may be that your 'offer' is the best available and that the executors will accept it, although if you and/or the said sibling are the executors that could muddy the waters.

theoretica

The added complication in this situation is that the executors of the Dad's will are only responsible for half the house - not the half which was left in Mum's will.  Easy enough to sort if everyone agrees, but complicated if they don't.

getmore4less

If part one has happened then they will already be the joint legal owners so outside the scope of the second set of executors