Advice re: buying out relative from inherited estate

Muttonchops_1943

Hi,
Hoping to find some straightforward advice on how to proceed with an estate.
My husband’s mother has passed away and has left the house to him and sister in the will. Also bequeathed is the total sum of £80k to grandchildren. My husband is considering buying his sister’s share of the house and us moving in as our primary/sole residence. There is no dispute and his sister is agreeable to this happening. They have appointed a probate solicitor and we understand nothing can be transferred over to my husband until probate is granted. 

The question is, how do we work out what mortgage/remortgage we would need to take out to ensure his sister is paid, but also the grandchildren receive their inheritance as well? The estate/house is worth £400k. We can’t get our head round how we work out the figures! 

Muttonchops_1943

For clarity, the £80k bequeathed to grandchildren would have come from the sale of the house. 

p00hsticks

I think you need to clarify the exact wording of the will - if the estate consisted soley of the house, and the will specifically left the house to A and B and £80k to be divided between C and D (or however many grandchildren there are) then it's not going to be possible to satisfy all the bequests, and I'm not sure how it'd be apportioned.

I think it would be more usual to say 'I leave £40k each to C and D and my residual estate to A and B' with the house forming part of the residual estate.

In which case, if the estate consists soley of the house worth £400k, then C and D get £40k each, and A and B share the remaining £320k, so £160k each.

If you (A) want to buy the house then you therefore need to raise/put in £240k, of which £160k goes to B and £80k is divided between the grandchildren

Muttonchops_1943

p00hsticks said:

I think you need to clarify the exact wording of the will - if the estate consisted soley of the house, and the will specifically left the house to A and B and £80k to be divided between C and D (or however many grandchildren there are) then it's not going to be possible to satisfy all the bequests, and I'm not sure how it'd be apportioned.

I think it would be more usual to say 'I leave £40k each to C and D and my residual estate to A and B' with the house forming part of the residual estate.

In which case, if the estate consists soley of the house worth £400k, then C and D get £40k each, and A and B share the remaining £320k, so £160k each.

If you (A) want to buy the house then you therefore need to raise/put in £240k, of which £160k goes to B and £80k is divided between the grandchildren

Yes, the entire estate is the house and it is as per your second paragraph of bequeathing the total sum of £80k to the grandchildren and the residual to husband and sister. As there is no cash in bank accounts to cover this amount, then it would have come from the sale of the house with the remaining sun to be split between my husband and sister. There is no mortgage on the estate, was paid for many years ago. 

getmore4less

The easy way to think of it and probably best for the mortgage application is you buy the house off the estate as a normal purchase with your share as your deposit.

Everyone knows how that works as that is a normal process.

xylophone

The house is valued at £400,000.
The executors sell your husband the property for £240,000.
Once they have received the cash in the executors' account, they transfer the property to  him, pay your SIL £160,000 and each grandchild his due share of  £80,000?

Keep_pedalling

xylophone said:

The house is valued at £400,000.
The executors sell your husband the property for £240,000.
Once they have received the cash in the executors' account, they transfer the property to  him, pay your SIL £160,000 and each grandchild his due share of  £80,000?

The estate costs will also need to be paid from the residual, which could be quite high as you have made the mistake of employing a solicitor to do the probate. So your husband will need to come up with a little more and his sister will receive a little less.

thegreenone

Not always a mistake, Keep_pedalling.  I used a solicitor as I wasn't confident enough to do the paperwork for my late Mum's estate. I found it money well spent.  However, there are still the utility bills to pay whilst the house is empty.  Who is paying those now as they will need to be reimbursed?  There may also be conveyancing fees to be paid by your husband.