living in house inherited by several memebers of family

securityguy · 3 April 2017 at 3:59PM

"I would think most people wouldn't be in a position in life to just "walk away" from £160,000"

I'm in my fifties. I'd without hesitation walk away from the possibility (and it's only a possibility, for all sorts of reasons) of £160k when my sibling dies, unless it was entirely effort-free, because I'm not wildly interested in the chance of money when I'm in my eighties, in exchange for paying out significant sums of money, and more importantly being on the hook for possibly _very_ significant amounts of money, all the way through my retirement. Two grand for my share of the roof? I'd rather spend two grand on a holiday, or give it to my children now.

happyandcontented · 3 April 2017 at 4:09PM

There are too many people/variables involved in this for it to end well. Far easier to persuade the sister to downsize (assuming her share would allow for this) and if it wouldn't, it would still be easier for each family member to contribute from their share to bolster her purchase.

Sea_Shell · 3 April 2017 at 4:11PM

Yes, in OP's situation they have all (have they?) decided that the sibling can continue to live there. So, yes, I might call it a day, on the assumption that I wouldn't see a bean of my "Inheritance" for many years. Or likely to be worse off!! It can be their problem.

For the benefit of other readers who may be in a similar situation.... what if they hadn't all agreed. What if one other sibling (e.g. maybe much younger) was struggling to get themselves on the property ladder and didn't agree with that plan. Why should they feel they should walk away from a "life changing" inheritance.

Yorkshireman99 · 3 April 2017 at 5:13PM

Sea_Shell wrote: »

I can really get where people are coming from with the "walk away", as it does seem a bit of a PITA.

However, assuming the Dad was a widow, you could still be talking (within IHT threshold) of inheriting a 1/4 share of a property worth in the region of £600-650k.

I would think most people wouldn't be in a position in life to just "walk away" from £160,000. (not saying that's what at stake here, as I don't think value has been mentioned)

I hear what you say but if the resident lives 25 years and then the others get nothing except potential liabilities and trouble for all that time. It is just not worth it.

Tammykitty · 3 April 2017 at 5:49PM

securityguy wrote: »

The issue that would worry me most is that were I to need state-funded care, I have a substantial capital asset from which I am deriving no income, but into which I am putting capital funds (because it's almost certain that it will need maintaining including things likes roof, wiring, windows). That's a thirty-year bet on the deprivation of assets rules, and from the outside looks exactly like DoA; I would be moving capital out of my direct control into an investment vehicle which will come back to my estate at some later point. Similar problems apply for pension credit and any other means-tested benefit.
QUOTE]

For it to be considered deprivation of assets, it has to be deliberate deprivation of assets in order to claim more or get care funded.

I could give my holiday home away to a stranger tomorrow simply because the stranger bought me a cup of tea.
Although this is a silly do, I have given my house my away with no forseeable need to claim means tested benefits - it is not deprivation of capital.
Even if I was in an accident tomorrow which means I need long term care, the act of giving away my house is still not deprivation of capital!

securityguy · 3 April 2017 at 8:14PM

Sea_Shell wrote: »

For the benefit of other readers who may be in a similar situation.... what if they hadn't all agreed. What if one other sibling (e.g. maybe much younger) was struggling to get themselves on the property ladder and didn't agree with that plan. Why should they feel they should walk away from a "life changing" inheritance.

But if they're "struggling to get themselves on the property ladder" what use is the possibility of a quarter of a house in thirty years time? For practical purposes, the plan on the table now is "walking away": if you're twenty, it's the possibility of money in your fifties. How does that help you buy a house? But it's thirty years of funding someone else's house, so it actually makes it harder, not easier.

securityguy · 3 April 2017 at 8:19PM

Tammykitty wrote: »

For it to be considered deprivation of assets, it has to be deliberate deprivation of assets in order to claim more or get care funded.

It's 2037. One of the participants in this scheme is getting a little frail. They have had a fall and are living at home with carers coming in, but it's looking increasingly likely that they're going to need care in the next twelve months. Suddenly, they get a phone call: the roof on their sister's house is letting in water, and the house needs reroofing. Without it, the value of the house will be seriously impactedl; with the new roof, it's worth more. All of us need to kick in five grand.

How is that not deprivation of assets?

I'm not saying the decision today is DoA: obviously not, as I'm advocating simply walking away from an asset without compensation. What I'm saying is that in twenty years' time, as the owners of the house get older, the transactions made in order to maintain it, which have the inevitable side-effect of increasing its value, start to look increasingly like DoA. Spending money on the maintenance of an asset from which you do not receive an income, and of which you are not the sole owner, such that some or all of the value of the money you spent will come back at some future date, is exactly what DoA looks like.

Sea_Shell · 3 April 2017 at 8:51PM

securityguy wrote: »

But if they're "struggling to get themselves on the property ladder" what use is the possibility of a quarter of a house in thirty years time? For practical purposes, the plan on the table now is "walking away": if you're twenty, it's the possibility of money in your fifties. How does that help you buy a house? But it's thirty years of funding someone else's house, so it actually makes it harder, not easier.

I meant if one sibling didn't agree to letting other continue to live in it, thereby forcing a sale so they could release their share now! Or should they just go with flow of the majority, but then walk away?

Yorkshireman99 · 3 April 2017 at 9:09PM

Sea_Shell wrote: »

I meant if one sibling didn't agree to letting other continue to live in it, thereby forcing a sale so they could release their share now! Or should they just go with flow of the majority, but then walk away?

The intestacy rules mean that each of the four inherit a quarter of the estate. If one wishes they can insist that the house be sold so that they can receive their share the others cannot prevent that. The other three cannot force their ludicrous scheme on the one who disagrees. Based on what the OP has said that is the only financially sensible thing to do. Of course one can execute a deed of vatiation and refuse their share.

securityguy · 3 April 2017 at 9:20PM

Sea_Shell wrote: »

I meant if one sibling didn't agree to letting other continue to live in it, thereby forcing a sale so they could release their share now! Or should they just go with flow of the majority, but then walk away?

Indeed. But back in the real world, this could very well end up in a massive family dispute. This is why such schemes are so pernicious: they're often about either the protection of the current rent-free accommodation for a purportedly vulnerable sibling, or the preservation of a shrine to the deceased parents, led by a dominant sibling and forced on the others. YM is absolutely right: under intestacy, one sibling can force the sale as they are entitled to their quarter share in cash. Unfortunately, that has a strong chance of resulting in family trouble, which is how dominant siblings get away with it.

living in house inherited by several memebers of family

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