Can it work? Buying sister out of share of mum's house to be able to live there

martin2345uk

Hi guys, my second post on this board following the sudden passing of our mum last week  :'(

This is more just a general information one really, but it would help me enormously to know if it's at all feasible - so here is the situation.

Mum has left her house (it's mortgage-free) to me and my sister. But, she has also left a total of £40,000 to her grandchildren. I am fairly certain she has nowhere near £40,000, so I assume that it has to somehow come out of the value of the house.

Myself, I bought a small house last at the beginning of this year. It was £315k, with a £215k mortgage.

Basically - will there be a way of me "buying" my sister out of mum's house (my sister also wants this to happen) so that I can take ownership of it, selling my own house in the process? I would guess (very roughly) that mum's house is worth about £500,000.

I just have absolutely no concept of how such a transaction would work, especially with the complication of the £40k for the grandkids...

We are seeing a solicitor on Friday to kick off the whole Probate thing but I just thought I would broach it on here as I don't want to get my hopes up if it's a non-starter. Would just be so nice to keep mum's house in the family and maintain that connection...

Thank you all again x

Savvy_Sue

At this stage, I wouldn't assume anything, because I think it depends on exactly what the will says.

Unless the solicitor has been appointed as executor by the will, don't automatically ask them to carry out probate. You will have to do quite a lot of work anyway, working out what assets Mum did have, but it's not usually complicated, and you can take your time.

Ask what they'd charge, but what you need NOW is an explanation of what the will says, and what it means you have to do. It may be that you and your sisger get the house regardless, and the grandchildren only get a proportion of what Grandma says she was leaving. 

p00hsticks

martin2345uk said:

Mum has left her house (it's mortgage-free) to me and my sister. But, she has also left a total of £40,000 to her grandchildren. I am fairly certain she has nowhere near £40,000, so I assume that it has to somehow come out of the value of the house.

As Savvy_Sue says, it's important to understand the exact wording of the will here, to work out exactly what happens - it could be that some bequests would be met in full at the cost of others, or it could be that all the bequests have to be reduced to reflect the fact that the estate isn't large enough to meet all of them.

 In principle it would be possible to buy your sister out of her share of the house, prividing you can raise enough money to both buy out her share of the property and provide the funds to meet the other bequests.

Marcon

Have you finalised your divorce settlement? https://forums.moneysavingexpert.com/discussion/6281083/best-way-to-d-i-v-o-r-c-e-as-quickly-painlessly-yes-and-as-cheaply-as-possible#latest

Throwing this complication into the mix might (but not necessarily) muddy the waters.

martin2345uk

Thanks all. And no, shamefully me and the ex still have not got divorced, although it's all very amicable. You've got me worried now...

martin2345uk

Savvy_Sue said:

Unless the solicitor has been appointed as executor by the will, don't automatically ask them to carry out probate. You will have to do quite a lot of work anyway, working out what assets Mum did have, but it's not usually complicated, and you can take your time.

This bit has confused me, I thought Probate meant dealing with the will and stuff which is what I thought the solicitors were for! Me and my sister are named as the executors in the will, are we meant to be involving a solicitor? A friend of mine recently did this without a solicitor and she said it was awful and she would never recommend doing it!

Savvy_Sue

OK, so you and your sister are responsible for doing what the will says. Some people find it very difficult, it partly depends on what assets there are, and whether the beneficiaries are easy to deal with. For example, I've co-executed two wills, no problems at all divvying it up between the beneficiaries, but they were simple wills and no-one was playing silly games or feeling hard done by - well there was a brief moment when one of them suggested that we might have accepted too low an offer on the house, and maybe we should withdraw it and re-market, at which point I asked if they'd like to take over that side of things because both I and my fellow executor had just been hugely relieved to get an offer on a potentially 'difficult' house, and the fact that it dragged on a bit meant we feared we'd lose the buyer anyway, right up until the day of exchange and completion (yes, done the same day ...)

Also, there is nothing to stop you taking advice from a solicitor on any particular aspect of the will, which we did both times. 

So your first step is to consult the solicitor (is this the firm which drew the will up?) to find out exactly what it means. And you ask them what would be involved in you buying out your sister's share, and you ask them what happens if there isn't £40K left over. 

But they will expect you to find out what bank accounts your mother had, what other accounts she had, how much she stuffed under the mattress in used notes, whether she had insurance or a pension pot which will pay out, whether the house is stuffed full of valuable antiques etc etc etc. And once you understand what the will says, and have half an idea of what her estate is worth, you'll probably be able to work out whether it's going to be easy or difficult to deal with it. 

Because if it's just you and your sister in your generation, and you're on good terms, and there's not too much of an issue with the legacies to the grandchildren, it should be straightforward. But how old are the grandchildren? If they are adult, and the legacies are not equal, then I can see that things could get difficult, and using a solicitor so that you can deal with things at arm's length has many benefits. 

AND it would be good to sort that divorce too ... with a financial agreement in place! 

martin2345uk

Thank you Sue. It's actually me, my sister, and our brother. If I am reading the will right, he is not getting anything directly (he was barely in touch with mum and was no support during her cancer journey so I can't say I massively blame her). His 2 children are 2 of the 4 kids she's left £10k each to. They're all pretty young, the legacies are equal, I would hope that would not be an issue. But yeah, who knows what the brother will say when he finds out?

But yes I will ask those questions to the solicitors on Friday - it's not the firm that drew up the will, it's one a couple of my friends used for probate and recommended to me...

I am honestly dreading the whole process like you wouldn't believe  :'(

Savvy_Sue

Well, I wouldn't say this is something anyone looks forward to, but really, it may not be as bad as you think it's going to be. 

Another thing to remember is that if you and your sister execute the will, you will probably sort it much faster than any firm of solicitors. But find out first what it says. 

RAS

And get that divorce sorted out before you do anything else.

If you have to pay your ex 50%+ of your inheritance and the equity in the current house, it's bye bye to any idea of buying out your sister.

Keep_pedalling

If your mother has specifically left her house to you and your sister and there are not sufficient assets to pay the GCs legacies then you still get the house, but their legacies will be reduced proportionally. So if there is only £20k left then they will get £5000 each.

If on the other hand they have been left £10k each and your and your sister have been left the residual estate then the shortfall comes out you and your sister’s share, which might mean you have to sell the house.