Inheritance

Flugelhorn

MalMonroe said:

I'm really sorry for your loss.

As for the property, it's just bricks and mortar - and things - they aren't half as important as people - I say go with your instinct. If you don't need the house or money, do this: "The last option is to give her the house in its entirely plus half of the liquid assets but everyone is telling me that this would be unfair on me as I'd be losing out on a quite a bit." Does it really matter what 'everyone' says?

This is your sister. She has asked you to deal with probate, she's happy for you to sort things out and that sounds to me like she trusts you completely. Added to that she's just lost her dad (as have you of course) and now she might be in danger of losing her home. Does it really matter who gets what? Your sister has always lived in your dad's house. So she must have been supportive of him, as he was probably supportive of her. So surely that must account for something here? Did she cook for him and clean while you were living your own, separate life? She really deserves to stay in her home in my opinion because that would be fair to her. 'Everybody' seems to have forgotten that she's been with your dad and supported him for years. 

If you can afford to do the last option you have described, then go with that. That's what we do for family. At least, that's what my family does. I can't believe some of the harsh comments on this thread.  

It is difficult isn't it? but there are a great number of threads on the forum where one family member wants to stay in the "family house" with no prospect of being able to pay the bills / maintain the property etc etc on  their own, with siblings expected to pick up the tab. The problems can go on for ages, I do wish people would make wills to sort this out and if they don't then the benficiaries should be pragmatic and split the assets as soon as possible 

Bailey1980

Thank you for all of the replies. 
In response to some of the queries,  if the house is sold and split equally alongside the liquid assets that would be enough for her to buy her own place, albeit somewhere smaller but as stated previously she has stated quite strongly that she does not want to sell the house. 

In response to MalMonroe - no she didn't cook or clean, our mum and dad did everything for her and she is two years older than me. I offered support to both my parents as often as I could and when our mum died, I sorted out all the probate for my dad, notified all the utility companies, took care of the funeral arrangements and supported them emotionally.  

I appreciate that it would have been easier for a will to have been made but we can't change the fact that one was not made. I am attempting to get the probate and letters of administration completed as soon as possible but we are waiting on one or two banks to confirm the sums held so that I can ensure the valuation of the estate is entirely accurate. 

I am just trying to do what is fair for both of us and to ensure that she doesn't get herself into financial difficulty by taking on a house whose bills that she will struggle to afford and I won't be able to bail her out /contribute as I have bills of my own property that I need to cover. 

Flugelhorn

Tricky @Bailey1980 but the problem is that she can't just have what she wants ie to stay in the house. Suspect she has been pandered to by parents and allowed what she wants before and it is incredibly hard to change people later on. You are quite right that she will get into financial difficulty managing the house alone and needs somewhere smaller Is there anyone else can talk her through the options and get her to look at the budget etc ? (close family often have too much baggage - mother would take advice from  anyone, literally anyone, except me) .  Might be a case of agreeing that you won't put the property on the market for 6 months or a year to give her a chance to look around / get used to the idea etc 

Sea_Shell

xylophone said:

You keep the £100,000 and transfer the property to your sister's sole name  against a first charge on the property for  £65,000?

In effect, you would be your sister's mortgagee.

She could repay you at a certain amount each month (plus interest if required).

A solicitor would draw up a loan agreement and arrange for the charge to be registered at the LR.

I'd advocate this method too.    However, you need to bear in mind that it doesn't sound as if she would be able to afford any "mortgage" repayments at the moment.

ETA - You could always make it Interest Only.   If you were to agree 1.5% pa, that would be £975 on £65,000, or £81.25 per month.     Alternatively this could be tailored to her budget.  Do you have any idea what she could afford, if anything.  You'd need to bear in mind though, that if you go for a very low rate (or none), then your £65,000 will get eroded by inflation, over time, and won't be worth that, in real terms, if/when you get it back.

It would be up to you both to negotiate the terms (interest/period etc), and also under what terms you'd get paid back in full, on sale of the property or death (assuming the "mortgage" isn't cleared by then), or by the end of the term.

If you did go down this route, then communication and review of the situation regularly are a must, along with providing her with regular "statements" as to the remaining outstanding amounts.     Make sure the charge gets removed, by you, once the debt is settled!!

I'm not sure if there would be any tax implications on you receiving the repayment amounts.  Maybe the interest element (if any) would be subject to Income Tax? 

wannabe_a_saver

If her half of the estate would be enough to house her in something more suitable and easier to maintain, then this is what's best even if she can't see that. 

Be very very clear, the house is going to be sold, this is the amount of money she will have to buy her new home.  You can help her look and help her through the buying process as that will probably be quite daunting, but you can't just leave her in the big house she cant afford at your expense!

DairyQueen

I would strongly advise against entering any long-term financial arrangement that involves gifting/loaning to your sister unless you are so comfortable financially that it will make no difference to your financial wellbeing now or in the future. Experience suggests that such an arrangement will adversely impact your relationship. Resentment can creep in (in both directions), as can opportunities for misunderstandings/strife. 

Taking on the responsibility of financially supporting a fit and adult sibling (at your own detriment) is a step too far IMO. We should all help family in times of need but she is expecting too much.

Sea_Shell

DairyQueen said:

I would strongly advise against entering any long-term financial arrangement that involves gifting/loaning to your sister unless you are so comfortable financially that it will make no difference to your financial wellbeing now or in the future. Experience suggests that such an arrangement will adversely impact your relationship. Resentment can creep in (in both directions), as can opportunities for misunderstandings/strife. 

Taking on the responsibility of financially supporting a fit and adult sibling (at your own detriment) is a step too far IMO. We should all help family in times of need but she is expecting too much.

But the situation is already causing issues and resentment, by the sounds of it.     In the "private mortgage" scenario presented, the OP would keep £100k, being the cash from the estate, so that would be a nice amount to have.   They'd just be "lending" their other £65k inheritance to the sister, under what could be mutually acceptable terms.*

The alternatives seem to be to cave in and let her stay, either by being a Joint owner 50:50, or by signing over the whole thing to the sister.   Or forcing a sale through the courts.   

All these solutions have the potential to cause resentment and strife...we're just trying to help the OP to come up with one that causes the least, without adversely penalising either party, too much.

* If the term of any such agreement was initially set at, say, 5 years, then it may be that during that time, the sister may realise that the property is too much for her, and after the worst pain of grief has passed, she may then agree to sell, and buy somewhere with just her remaining share.

Sea_Shell

DairyQueen said:

Taking on the responsibility of financially supporting a fit and adult sibling (at your own detriment) is a step too far IMO. We should all help family in times of need but she is expecting too much.

Just to add, yes, usually I'd agree with you on this point.    However, we are talking about money that the OP doesn't currently have, so I view this slightly differently than supporting the sister by giving her £65,000 of the OP's own earned money IYSWIM.

If the Sister just came along and asked to borrow £65k, then that would be a whole different ball game!!

Also a lot depends on the history of the family relationships, which may be complex, and in most cases can't be adequately detailed on an internet forum (I know my family woes couldn't be!!).  Only OP knows the full story here.

xylophone

I don't see that the OP would be making much of a sacrifice in accepting the private mortgage scenario.

After all, he/she would receive a lump sum of £100,000 and the only support being given to the sibling would be the "paper" £65,000.

If the sibling ended up not being able to pay the bills for the house, then she'd have to sell it - presumably the terms of the loan agreement drawn up by the OP's solicitor would cover this scenario -  pay OP from proceeds, continue with loan to enable purchase of another property etc etc.

The OP would have no further responsibility for the property or indeed her sibling.

If the worst came to the worst and the sibling ended up with no money to repay, the OP would still have the £100,000.

If not fair enough then good enough - the pragmatic view?

carefullycautious

Hi, I have just found this
How do you avoid children fighting over the family home after you die? | This is Money