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Inheritance - My brother wants a property which is worth 110% of his 'share'...

(121 Posts)
quandry Mon 10-Jun-13 22:41:50

My Dad left everything divided equally between four of us:
Me
My Brother
Grandchild 1 (my child) (in trust until 21)
Grandchild 2 (my child) (in trust until 21)

For the sake of simplicity, let's say the estate is worth £400 K, so we are each entitled to £100K.
There are two properties, and my brother wants one of them, but is is worth £110K.

He has no money to 'buy out' the extra £10k.
He cannot get a mortgage, as has poor credit record and irregular income.
He has said he also 'needs' an extra £5 K to move/ renovate the house etc.

I am happy to 'help' him by 'lending' the extra £15K, but I'm not sure how to do this under the terms of the will/estate?

- Am worried about how to ensure I get my money back?
- I don't really want to part-own the property, as I am worried about being linked to him in any way on credit searches etc and being responsible if he defaults on any bills etc.

Should I just set it up as a loan, repayable when he sells the property, of gets more income? What rate of interest should I charge? Could I link it to the growth in value of the property?

I am really going round in circles trying to think this through.

ThisIsMummyPig Mon 10-Jun-13 22:47:55

I'm not an expert, but as I understand it you can transfer it into his name on Land Registry, and put a 'charge' on the property. I have only seen these done for a set amount (so £15k) and not as a proportion(10% of the sale value).

That way when he sold the property you would be paid out. If by some miracle he paid you out before, you could just contact land registry and get the charge removed. This is the same mechanism as a bank registering a mortgage.

I think you would need to see a solicitor to set it up though.

ThisIsMummyPig Mon 10-Jun-13 22:48:34

by 'it' I mean the property he wants.

ITCouldBeWorse Mon 10-Jun-13 22:51:31

Surely no one would get a mortgage or 15k, isn't that more if a personal loan kind of figure? Maybe he could get a loan instead?

Is inheritance tax sorted?

If you can't afford to write off ths money, I think you should consider a loan very carefully. His track record may not be great with money.

He wants a lot his way it seems...

exexpat Mon 10-Jun-13 22:53:55

I have lent money to two different family members to help them buy houses.

In one case they are otherwise mortgage-free; they do not pay me any interest, but we have an agreement drawn up whereby I will get back my loan plus a proportion of any profit when they sell the house. Actually they have been trying to sell for two years and may end up making a loss but never mind...

In the other case, they also have a mortgage, and I have a secondary charge on the property (so that if it were ever repossessed I would have a legal claim). They aren't paying me interest at the moment, but are due to at some stage in the future.

In both cases it involved getting legal stuff drawn up which cost a few hundred pounds, but it is probably worth it for your peace of mind, specially if your brother is not (by the sound of it) particularly good at handling finances. It is really up to you and what you thinks fair in terms of demanding interest or not - there is no set formula.

OldLadyKnowsNothing Mon 10-Jun-13 22:55:12

He needs a lawyer. You need a different lawyer.

You and db need to sit down and thrash out the details of the deal; that you're lending him £15k, to be repaid (insert your own details here). Get one lawyer to look it over from your POV, that you haven't agreed something stupid. Get the other lawyer to double-check from db's POV. Sign.

I'm lending a friend a similar sum to do up her house, and that's what we're doing. It's a PITA but protects us both; and she's someone I absolutely know will pay back.

ITCouldBeWorse Mon 10-Jun-13 22:56:51

If he does not have a steady income, how does he plan to repay you?

BIWI Mon 10-Jun-13 22:57:38

Why can't he just have one of the houses? I don't understand! The houses, presumably, will be part of the estate - he wouldn't have to buy it.

ExcuseTypos Mon 10-Jun-13 22:59:43

I agree with BIWI, he should just have the other house, or the £110K property should be sold, he should have his share and he should then buy a house he can afford.

exexpat Mon 10-Jun-13 22:59:49

BIWI - the house is worth more than his quarter-share of the estate, so if he just gets the house, the OP and her children end up with less than their share. The loan would be to even things out.

MissMarplesBloomers Mon 10-Jun-13 23:00:00

If you want to keep things easy/simple I'd let him "have" the property but no more money, up to him then what he does with it.

You could spend the £10k difference on solicitors, so don't throw it away.

Lonecatwithkitten Mon 10-Jun-13 23:00:04

BIWI the house he wants is worth more than his share of the estate therefore he needs to 'buy' the portion that is greater than his share out of the estate.

Do you think he is hoping you will just gift him the money?

A more 'normal' will would split 50/50 to the children, with maybe a small gift to grandchildren.

Maybe he sees the will as 25/75 in your favour and is trying to rebalance it? Have you asked him how he wants to repay the loan? This might help you work out if he is ever intending to repay and might work out if you even want to loan the money.

I am with Biwi.

You and yours already have 75% of your fathers estate. Why not just let him have the house?

BIWI Mon 10-Jun-13 23:02:01

But in the scheme of things, the OP is inheriting a lot of money - does it really matter if he gets a little bit more?

ExcuseTypos Mon 10-Jun-13 23:02:26

Sorry pressed too soon.

I think you could be storing up problems for the future. It sounds like he can't afford to pay you back, so I don't understand why you would give him a loan.

BIWI Mon 10-Jun-13 23:02:35

And if he can't get a mortgage on his own, then why not allow him to have that property?

Do you know why your father did not share is estate equally between his two children?

quandry Mon 10-Jun-13 23:03:38

BIWI - by the terms of the will he is entitled to a 25% share, but the property is worth more than that.
We could possibly make what's called a Deed of Variation of the will, but that would mean that he would take the property, and my share would go down to £90K. I don't think we are allowed to alter the shares of minors whose money is left in trust?

There is no inheritance tax to pay, as my late mother transferred her full nil rate band.

ExcuseTypos Mon 10-Jun-13 23:04:14

Sorry I miss understood BIWI.

You and yours are still better off than him....

BIWI Mon 10-Jun-13 23:08:56

The property is only worth what someone will pay for it though - it's not an absolute figure. I really can't see that there would be an issue about you having one property and him having the other. The only really fair way to do it would be to sell those two properties and then you both take the appropriate amount of money to go and buy new properties - which would be madness.

Who says that you can't just take one property each? What would happen if you did that?

ITCouldBeWorse Mon 10-Jun-13 23:09:03

I suspect the will was purposefully constructed.

Does your brother have children? Or might he have children in future?

I am just not sure how you can squabble over you and yours getting 290k out of his estate, and him 110. Providing the house is worth that. Has it been valued recently? People offer much lower than the asking price these days.

quandry Mon 10-Jun-13 23:11:32

Quint - well, my father DID share it equally between my brother and I - but he also included his grandchildren.

I'm afraid my Dad felt that over the years he had lent my brother enough money, and never got it back sad. I suspect he gave the grandchildren more to prevent my brother getting it all.

My brother is very difficult to deal with. He is hopeless at making decisions or getting anything done. The house he wants is many miles away and full of all his stuff.
I am the executor of my father's estate. If we have to sell the property it will be a logistical nightmare, and will likely end up with my brother and I falling out.
I am trying to keep the peace by offering to help him have that property, but I am a bit hmm that he has started saying he can only move if he has some cash too to pay off his credit card bill and do some renovations.

Ogg Mon 10-Jun-13 23:12:42

I would gift him the £10,000 but let him sort out the refurbishment budget on his own !! for the hassle and legal fees its worth 10%

"he can only move if he has some cash too to pay off his credit card bill and do some renovations." Well that is his problem. Nothing to do with the will.

ANJALI777 Mon 10-Jun-13 23:13:22

can't he own 90% of the property and you own 10%, so when he eventually sells, you get 10%, or he can buy out your 10% any time????

does that make sense???

Actually, have you posted about this particular problem, ages ago, while your father was still alive?

BIWI Mon 10-Jun-13 23:13:51

It will be a logistical nightmare to sell it - so why not just let him have it? That way you will also keep the peace between the two of you.

But if the property takes more than his share, then there's no money to go with it - and renovations are his responsibility, not the responsibility of the estate.

quandry Mon 10-Jun-13 23:18:08

The problem, as I understand it, is that you can't just 'divvy up' an estate as you seem fit. Everything has a value attached to it in the probate process, so it has to be properly assigned and accounted for?

I guess there are some underlying issues between my brother and I. He is perfectly able and capable of earning more money than he has, but just doesn't apply himself, and I don't really see why I should have to bail him out (again, as I've already given him over £1000 in the past).

He's not married, and unlikely to have any kids of his own.

ITCouldBeWorse Mon 10-Jun-13 23:18:16

Maybe liquidating the asset will enable him to buy a smaller property outright - handy for someone with debts and no steady income, especially if the bank of dad is no longer available to him.

Or does he hope the bank of sis will open a branch near him soon?

MummyMastodon Mon 10-Jun-13 23:19:02

Sorry, but I think your brother has been utterly screwed over by this bizarre will, and any future children he has have been screwed over even more.

I would give him the property.

.

ITCouldBeWorse Mon 10-Jun-13 23:20:50

I think the ops father was fed up with bailing out his son and did not want all his estate to favour him again. I think ops dad was redressing the balance

MaryBateman Mon 10-Jun-13 23:21:20

Is the property really worth £110k? How long would it take to sell considering it is full of all his stuff and needs renovations? I suspect he wouldn't make it easy for it to be put on the market.

Seriously, for the sake of £10k, when you and yours have been left 75% of the estate, I would just give him the property as a clean break settlement. You could easily run up legal fees and charges well beyond that to try and recoup £10k.

quandry Mon 10-Jun-13 23:28:05

Not sure the will is that bizarre? Lots of people bypass their kids and leave a lot to grandchildren?? It also includes provision for the money to be used for the kids' education (Uni fees etc) which I know Dad was very keen on.

ItCouldBeWorse - I think you've hit the nail on the head! And I don't want to become bank of Sis!

I don't know if my brother is playing games. I suspect if I say there's no extra cash then he will say he can't move and then make like difficult when I try to sell the house.

quandry Mon 10-Jun-13 23:31:36

Mary - well, actually, the property could be worth even more! As high as £125k by one valuation, but I think £110K is more realistic, and what one estate agent suggested might be the current true 'sell' price if it were to go on the market.

BIWI Mon 10-Jun-13 23:35:17

This is more about the relationship between you and your brother than the actual money, isn't it? If you really wanted to keep the peace/preserve your relationship, you would just give him the house.

But it sounds like you rather resent your brother and don't want him to have something that he wants.

If someone else had posted this as an OP, what would you advise them?

steppemum Mon 10-Jun-13 23:36:53

I really don't think it is that difficult.

Everything in the estate is assigned a value. You inherit you proportion. So you inherit 10K tied up in the house and he inherits 100K.

You put a legal document in place which says that when the house is (if ever) sold, then you get 10K back (not a %, but 10K, because it is 10K that is yours, not a %). You will get this even if it is repossessed/sold for less than current value, as the amount is determined by today's value.

The rest of the estate is divided as said, so you are owed another 90K and each of the kids 100K. Everyone inherits their portion.

Whatever your feelings about who should or should inherit what, the will must be divided as it says.

If he wants more money to do it up, then he can earn it. he is not entitled to anything else from the will. If you give him anything, it has to come from you, and not from the will. I think he needs to go out and earn the money he needs, he has just got a house!

AdoraBell Mon 10-Jun-13 23:44:22

I would be inclined to let DB have the house if the will allows for it.

You say it's full if his stuff. Is that DB's stuff or late DF? If DBs then no need for anyone to clear anything, if late DF then you really should both do the clearing together.

I know people are saying DB has less than you but the bottom line is it's DF's Will and he wrote it as he saw fit. Yes, he might have shared it 50/50 between you and DB but he could equally have left everything to the local homeless charity, or done like mine and left it to 1 of 6 DCs, his choice. You just have to deal with it now unfortunately.

Selba Tue 11-Jun-13 01:05:45

Let him have the house . Most gracious and simplest thing to do .

You and yours have done 3x better than him as it stands.

If you put the house on the open market it might fetch 80k. Would you be happy to then get less than you currently anticipate?

Monty27 Tue 11-Jun-13 01:13:54

I would be inclined to let db have the house too. You'd probably save on legal fees for a start, and you're family are say 300k up.

I think you sound greedy to be honest. confused

StupidFlanders Tue 11-Jun-13 01:54:24

I'd let him have it and I have a brother who sounds similar.

garlicgrump Tue 11-Jun-13 02:21:33

I agree with MummyMastodon and most others. As your brother has 'issues', is it not conceivable that your father wanted to ensure he is, at least, housed? I think you're allowing your feelings about your brother to get in the way of your reasoning. You're inheriting a tidy sum and your family's getting three-quarters of your father's estate.

The simplest thing of all will be to vary the terms of the will, grant your brother a home, and enjoy the plans you'll make for your family's £290,000. You might even have a magnanimous turn and make the variation £15k, so he can do his moving and fix the electrics or whatever.

If you absolutely must keep a claw in your brother, do it the other way. Give him the £15k in return for a charge on the property. I had charges on properties after both my divorces; it's very easy and the place can't be sold without your release.

Personally I think you should go for the variation, do the right thing and make it a clean break. Otherwise you'll be fretting over "your" share of his house for a long time to come; not healthy.

ICutMyFootOnOccamsRazor Tue 11-Jun-13 02:51:25

Sorry, but I think you are sounding quite grabby here, OP.

And, however feckless he may be, I feel for your brother, who has had the value of his inheritance massively knocked by his father's unusual decision to divide his estate this way.

An equal split between children is far more usual.

Just let him have the house.

Did you have a thread on this back before your father died, worrying about what was then your position as the person with power of attorney over your father's estate and the possibility of needing to sell the £110K property to pay for your father's care, plus how your brother would react when he found out about the terms of the will? The set-up sounds familiar.

I think in your position I would either

(a) Just let your brother take the house and write off the £10K difference from your share, but don't let him have any cash. That way it's done and dusted and you are shot of any further financial ties to your brother, and you and your DCs still inherit a significant majority of the estate. OK, so it's not "fair" but the lack of legal hassles may well be worth £10K to you.

(b) Do as pp suggested and let him have the house but with a £10K charge to you registered against it. You'd both need separate legal representation and it's unlikely he can afford it, so you'd probably end up subbing him that money as well.

(and if the OP is the poster I'm thinking of then there is a long, loooong backstory with the brother and she's not being particularly grabby under the circumstances)

TwasBrillig Tue 11-Jun-13 04:30:08

Let him have the house.

kickassangel Tue 11-Jun-13 04:43:36

I don't think it's at all relevant what her children inherit. No child has any kind of right to inherit money from their parents. Legally, as executor, she has to follow the terms of the will, unless there is a very good reason not to.

Op, speak to a legal person about whether you actually can change the will like this, or decide how you want to do it once the will is executed, and you own part of the house. An untidy house and surly occupant won't sell, you could lose more than 10k if you try to sell and split the money

It is not 'grabby' to execute a will the way it was intended - that's the way it should be done. It is down to the deceased to decide who gets what and in what proportion for any or even no reason at all.

The OPs father made a decision to split his estate the way he has. It was his, and this was his choice. End of story. To then call the OP grabby or to refer to what overall share her family got to imply she is unfair or selfish is wrong.

As an executor she is required to follow her fathers WISHES. He willed his estate in a certain way because he WANTED it that way - noone has a right to inherit anything and he did not have to leave his son a bean.

If he had wanted DB to have a roof over his head then he could easily have left him the house outright. He didn't.

OP has not inherited 75%, she cannot touch the money left to her children, it is not hers. If the other two beneficiaries were not her children noone would dream of suggesting such a variation. The split is between four individuals. To give DB the extra she cannot touch the Trust money, so she would have to take it from her share. Which isn't fair.

The OP is following the role of the executor by executing the wishes of her father, who was of sound mind. It is not for randomers on a forum to decide whether it is fair or not - his money, his choice.

The only person who sounds grabby is the DB. He has been left a vast sum of money, and he wants to take from his sister's share too so that he ends up with more than anyone. THAT is not fair. And then to ask for moving costs to be paid as well?

Sounds to me like DB is very entitled and relies on others to support him.

Execute the will as your father wanted OP, it was his money, his decision. He had his reasons (including DB having a chunk of potential inheritance 'up front' by the sounds of it) and it's not for DB or Mumsnet to question them. If your brother wants more money he can do what everyone else does and earn it. Then when he dies he can leave it to whomever he chooses, as is his right - and as was your fathers.

TwasBrillig Tue 11-Jun-13 05:00:27

You say your brothers possessions are there. Do you think by dividing up the way he has he thought your brother would have the house so that he had somewhere to live, but no money to waste?

It seems odd he'd expect it to be sold when being so generous to your side of the family.

JakeBullet Tue 11-Jun-13 05:12:42

Well said Coola.

Oscalito Tue 11-Jun-13 05:19:20

For the sake of simplicity I would just let him have the house. But I understand that you don't want him to have cash on top of that, I think giving him the house is more than generous. He may not see it that way though... good luck.

I don't think you are being grabby bit I think your brother sounds entitled and feckless.

I'd either put a charge on the house with added interest. (Why not, he can't expect free finance?) or get the house sold and just give him his percentage of the proceeds.

If dad had wanted him to have a guaranteed roof over his head he would have just left him a house.

Oscalito Tue 11-Jun-13 05:22:05

Also agree with others that losing 10K will be better than lawyers, stress, arguments, having to wait on him to pay you back. The price he pays for that 10K is that the matter is closed.

Chubfuddler Tue 11-Jun-13 05:47:25

I may have misread the op but I don't think the op is actually interested in or asking for opinions about whether or not she should execute the terms of her fathers will as he wrote it (which she has a legal obligation to do if she accepts the task of executor). Presumably he had good reason for the bequests he has made.

Op lend him the 15k and register a charge as outlined above. It will cost a couple of hundred pounds and prevent any argument. If he doesn't want it done like that he can't have the house he wants. Simple as that.

Chubfuddler Tue 11-Jun-13 05:52:53

YY to coola

Lavenderloves Tue 11-Jun-13 06:11:32

I can see why your dad split his estate this way. ( your brothers demands say it all)
I can also see why your brother is agrieved. He should be angry with your dad though not you.

Let your brother have the house. The shortfall amount is written in a deed of trust that whatever happens you get your 10kback ( plus interest if you want it at a % of value increase)

As for the rest no sorry he has to be a grown up and sort himself out. He's taking your money otherwise. Putting the grand childrens money to oneside ( it's not yours) your dad would not have wanted you to give your money to him. This way you help him, the money is still yours and you have kept to your fathers wishes.

Fwiw i have a sil like your bro and she's fucking irritating. Always draining cash off pil. Always failing to be a grown up. They buy her a house she can't manage it. They loan her money she wastes it. Don't facilitate it he's a big boy.

BlueSkySoftSand Tue 11-Jun-13 06:12:25

Absolutely agree with Coola

BeckAndCall Tue 11-Jun-13 06:21:47

quandry - your figures are illustrative so I suspect the numbers could be much larger and so the differential more substantial.

But, my question is this, have you factored inheritance tax into this? By the time you've taken 40% off, the proportions will look much different and the idea of just giving your brother more than his share will be much more costly. If its the £400k we're talking about, this would only leave you and your children £50k each, not £100k. A very different situation from just gifting your brother £10k.

princesssmartypantss Tue 11-Jun-13 06:57:17

Dh is a solicitor (not property, but general legal opinion) suggests that your db has house and put a charge on the property for 10/15k which is like you giving him a mortgage, that in itself is generous as your money won't increase in value but if you are able to do this it means he gets to keep the house but you don't totally lose out. My opinion is that your df said what he wanted to happen in his will and i always think its tricky when someone dies that the 'fallout' of their wishes always seems to create problems!

BranchingOut Tue 11-Jun-13 07:05:19

Surely once the property is his, he can then raise a small mortgage to renovate etc?

Ladyflip Tue 11-Jun-13 07:21:58

OP it sounds like you have had good legal advice. I'm a probate lawyer. Ignore those who say you are grabby, I know plenty of people who would be peeved at getting a quarter share of an estate even if their own children had inherited half.
I would jointly own property with brother, with a declaration of trust giving him 90% and you 10%. That way your capital sum will increase or decrease with property market and he will be unable to mortgage it etc without your consent. You may then have to make a contribution to capital outlay eg new roof etc but you do protect your share.

ExcuseTypos Tue 11-Jun-13 07:29:25

Lady, the OP has said she doesn't want to be tied to anything to do with her brother. I agree with her, she needs some kind of clean break solipution, so she isn't liable for any future costs.

MoreBeta Tue 11-Jun-13 07:43:51

The only truely fair way to resolve this is to put the property on the market and sell it along with all the other assets and then having cashed in all the assets you divide what is left over after fees and taxes between the four beneficiaries.

Your brother will get his fair share and no arguements. Taxes and fees need to be taken onto acocunt though. Who wil pay the inhertiance tax on your brothers share if it is a house? If he has no cash how could he pay the ineritance tax? He may have to sell it anyway?

ExcuseTypos Tue 11-Jun-13 07:48:15

There isn't any inheritance tax More. Also the Op has said, he rbrother will make steeling the property very difficult.

ExcuseTypos Tue 11-Jun-13 07:48:42

Selling

DoodleAlley Tue 11-Jun-13 07:57:42

Sorry if this has already been suggested but you could ask
A lawyer about you and your brother owning the property in identifiable shares as tenants in common.

The only problem with this is that with ownership might come responsibilities and liabilities that you do not have the practical power or ability to control before they bite you.

SoupDragon Tue 11-Jun-13 07:58:19

OP has not inherited 75%, she cannot touch the money left to her children, it is not hers.

This.

As it stands, she and her brother have each inherited £100k. Two other people have each inherited £100k which they will access when they turn 21.

I would probably go down the route of letting him have the house and having a charge on the property for the £10k. I would not include the £5k he "needs" to pay off debts and renovate.

ssd Tue 11-Jun-13 08:23:45

I'd give him it

be the bigger person

Quite honestly, the OP's father decided to set up the will this way.

Why should the OP do it any differently? Her father didn't leave the money to her family, he left it to individuals in his family in a way he saw fit.

Your brother sounds incredibly entitled. He knows where the bank is if he wants more. He's getting £100k FFS!

IsThisAGoodIdea Tue 11-Jun-13 12:20:14

Fgs, give him the house and move on with your lives. It's not worth the drama.

In your position, I'd feel a bit embarrassed that myself and my children had bagged three-quarters of the inheritance. Not your doing, I know, but still.

As for the extra £5k, that's just trying it on. Don't give him that. He's got the house, he saves for anything he needs to do to it.

Angelodelighto Tue 11-Jun-13 12:35:43

CoolaSchmoola Very well put.

I read this thread last night but had to step away as it was becoming very hard reading.

Please can people remember this is not AIBU.

The OP has posted a genuine question in money matters , if you have no legal/financial advice to give then don't post!

How horrendous that people feel the need to post such nasty comments when the OP's father has died & she is carrying out his wishes as he instructed in his will. sad

Also I took it that the figures the OP was using were examples not actual figures- For the sake of simplicity, let's say the estate is worth £400 K, so we are each entitled to £100K. in which case OP may be looking at more than a £10k loss...

Why on earth do some posters think the OP should receive less than her DB? confused

Xenia Tue 11-Jun-13 13:11:45

It's rather unfair. The brother may go on to have 6 children and they will not get a penny.
However iti s what it is and registering a charge of £10k (do not give him £5k more) over the property for when he sells is one route. A cleaner route is that he borrows £10k over say 5 years and pays that loan to the poster. As hisl oan is a tiny & of equity he can probably get equity release even if he cannot get a traditional loan

AdoraBell Tue 11-Jun-13 13:13:11

Angelodelughto

I don't think the OP should get less, what I was trying to say was what Coola came along and said properly.

I do, however, think that the OP might be better off not being tied into a property with a relative who sounds entitled and maybe disgruntled. That's why I would just let him house the house and move on. I watched my siblings squabble over my father's modest estate. Some if them were practically frothing at the mouth.

OP could save herself a lot of stress in the future by not being involved in the property, if the will allows for this.

AdoraBell Tue 11-Jun-13 13:16:57

And yes, of course, late DF wrote his will the way he did for a reason, but I doubt that reason was for the OP the become her DB's fincanier and prop. He quite possibly thought he was making DB stand on his own two feet.

fubbsy Tue 11-Jun-13 13:57:08

Sorry for your loss OP.

I agree with Adora - if it were me, I would 'give' the brother the house and walk away.

It's not really right, it's not what DF wanted, but I would then be free of the stress of being tied to my troublesome, financially irresponsible man-child of a brother.

Xenia, if this is the same family as the previous thread then it seems unlikely that the brother will ever have children and also the father had cogent and well-thought-out reasons for leaving his property the way he did. And it's quite possible that the same reasons apply even if it isn't the same family. Although if it isn't then there seems to be an epidemic of entitled wastrel brothers around.

SoupDragon Tue 11-Jun-13 16:20:22

The brother may go on to have 6 children and they will not get a penny

That is irrelevant as they will not have met their grandfather.

littlemonkeychops Tue 11-Jun-13 16:41:03

If you can afford to lose the 10% i would let him have the house, losing the 10% from your share (there is no issue doing this, it's your inheritance you can give it to who you want).

I have two totally feckless brothers and this is what i would do. You can then have a clean break having given him a roof over his head (what happens in future is not your problem).

Allalonenow Tue 11-Jun-13 16:56:57

Could you sell the second property? If it would raise enough to pay your brother his share, do so. Give him his share of the estate. Using this as security, he can then borrow the rest of the money he needs in order to buy and renovate the house he wants from the estate.

That way, you are not involved in supporting him financially. He sounds feckless and entitled, and I'd be reluctant to give him any more than his share of the estate.

garlicgrump Tue 11-Jun-13 17:00:43

Yes, monkeychops, I advocated the variation & taking a short hit, for the sake of a clean break. There's apparently bad feeling between brother and sister; the ongoing ties implicated in a share or charge on the property would no doubt protract an awkward situation.

OP's father presumably intended a roof over brother's head. The executors are allowed - some might say expected - to fulfil the will's intention as well as the letter. She has already ascertained that she can effect a variation of this nature.

OP posted that inheritance tax is not an issue.

snowprincess1 Tue 11-Jun-13 18:00:45

Sorry to hear of your father.

Lending to family is very rarely a good idea.

For this reason, I would be fairly uncertain regarding the 10k but would consider it via a legal agreement through solicitors if it made your life easier (accepting to myself I'm unlikely to ever see it again) but absolutely no way would I consider the additional 5k on principle. I probably shouldn't say this but I think your brother is wanting to have his cake and eat it too.

MrsGSR Tue 11-Jun-13 20:25:23

I have no idea what to do legally, but I think people are being a bit unfair to the OP. A will is a legal document, yes she could 'gift' her brother that 10% but she would be going against her fathers wishes. If her children's share is going into a Trust until they are older it would have to come out of her 25% share so she would miss out. Her father chose to split the money that way and unless you know the entire back story I don't think people should be questioning that.

quandry Tue 11-Jun-13 20:32:02

Thank you for all the very constructive and helpful posts, and biscuit to the greedy and grabby accusations.
It's not really relevant to go through all the history, but yes, it was me who posted previously under my usual name last year when Dad was beginning to get really frail and went into a care home. He died earlier this year.sad
I did all the organising & caring for my Dad for many years. I have no doubt that he constructed his will the way he did for very good reason - he as good as told me that my DB had had ' more than his fair share' over the years. I think if DF had wanted to specifically make sure my DB had the house he would have left it to him directly.

However I don't have a problem with letting my DB have the house, as I have no interest in it, and would prefer not have to go through the process of forcing my brother to sell it. It is all DB's stuff it is full of by the way. I would almost certainly end up having to get bailiffs in and change locks etc, and my DB and I would probably never speak again.

My question was really about how I could legally distribute the estate differently to the will, and I think various posters have answered that - thank you.
I also wanted to get a sense check on whether it seemed reasonable for my DB to be asking for me for more money. I feel rather blackmailed, as he is saying he 'can't move' unless he has £5k-£10k in the bank hmm

He has credit card debts, and says he couldn't get a mortgage due to his credit record. (Is that true - if he owned a property, couldn't he get a mortgage against that?)

Personally I think he needs to apply himself more - he just faffs around, says he ' runs his own freelance business' but doesn't make any money and spends lots of time distracted by his hobbies.

I don't really see why I should lend him anything. He just seems to think that because I have the money that I can 'afford' to give it to him!
He will end up completely owning a house, but DH & I still have a mortgage!?

Thanks for 'talking this through' with me - really helps. I'm finding it hard to separate the executor 'hat' from the family member/ beneficiary hat...

BrienneOfTarth Tue 11-Jun-13 21:00:07

It may well be true that he couldn't get a "normal" mortgage if he has a dodgy credit record - however, if he owns a property he should be able to get a modest loan, secured against that property. If he's all that feckless he would probably end up defaulting and losing the house though!

It certainly isn't reasonable for your DB to be asking you for more money. You are perfectly reasonable to decline that.

This is certainly showing me why it is often advised not to make the executor a beneficiary!

NB if you put a charge on the property as Previous Posters have suggested, this would not affect things like credit searches, responsibility for debts etc.

aamia Tue 11-Jun-13 21:10:56

Nope, give him the property (you'll never get the money back anyway), and he can sell it and buy something smaller if he wants, so having the money to move that way.

quandry Tue 11-Jun-13 21:10:59

Just to clarify by the way, my DB is not currently living in the house he wants - it was a second property my DF owned as a holiday home. My DF used to go there for 6-8 weeks a year. DB currently has a council house.

antshouse Tue 11-Jun-13 21:38:12

Could you suggest that he rents the property out for a while to get the cash together that he needs?
He'll have to get his act together and sort his stuff out first but at least he'll get the message that you are not going to fund his move.

quandry Tue 11-Jun-13 21:55:05

Antshouse - I know that sounds like a really sensible solution, but it just would never happen. My DB is too emotionally attached to all his stuff and could never empty it to rent - wouldn't be able afford storage either.
It's also not furnished to a high enough standard to rent out.
In my previous post I meant to say my DB spends 6-8 weeks a year at the house ( not my DF).

I just think my brother should get a job of some sort if his own business isn't paying his way. He has a degree and is talented in his own particular field, but doesn't seem to get on with people in a work setting.
He is very self- centred and only really sees things from his point of view.

Allalonenow Tue 11-Jun-13 22:47:39

If the house were rented out before the estate had been settled, then any benefit of rent would belong to the estate, not to the brother who just happens to want that house.

AdoraBell Wed 12-Jun-13 03:29:54

I've moved without 5-10K in the bank, and I know a lot of people who have done the same. I do appreciate that removal costs and insurances etc can add up, but his belongings are already in the house so all he has to do is decide to move in. That's not your problema or responsiblity. I wouldn't lend or give and money.

CouthyMow Wed 12-Jun-13 03:47:56

It's not her 'family' that are inheriting 75% of the estate.

The money for the OP's DC's is held in trust until they are 21, so adults themselves, and will be 'families' in their own right.

The OP gets 25%. The Brother gets 25%. The other 50% isn't able to be counted as the OP's, as it will be received by two adults, not the OP herself.

My DGrandad has a will that is even more harsh than this - my Uncle will get the house he is living in (which is owned by my Grandad). My Mother will get 40% of his estate that is left, I have been told that I will get a 20% share, my Dbro 20%, and the remaining 20% will be split between my 4 DC's, put in trust until they are 25.

The reason my Uncle gets nothing but the (small) house he is currently living in? Because my DGrandad has spent the last 35 years paying out his share of the estate to him - so he will have HAD the equivalent amount if money, but whilst his dad is still alive.

My DGrandad doesn't think it right that he should benefit from twice the amount if money my Mother has, and he wishes to make some provision for me, my Dbro, and my DC's. (My Dbro does not want any DC's. Or a girlfriend. Or a boyfriend...)

Surely the wishes of the person who wrote the will should be the wishes taken into account?

In my view, the house should be sold, to allow the brother to get his £100k, fair and square according to the terms of the will.

Or he gets a loan to pay the extra £10k back to the estate, buying out the remainder or the OP's share.

It's not the OP who chose the terms of the will, why should she go against the wishes her dad had when he wrote the will?! confused

Lavenderloves Wed 12-Jun-13 06:30:05

After reading that you still have a mortgage yourself i would take a harder
Line with him. Sell the house or he raises the cash.

He's just like my sil she expects everyone to pay for her because were so much richer than her. Moans that were so lucky...ignoring the hard work.

I think the mortgage or lack of is a bit of a red herring. Might be galling to OP but if 110% gets feckless sibling mortgage free and 90% doesn't get the sensible sibling (the OP) who is presumably paying her mortgage and had a deposit then her house must be worth more.

Since you quite reasonably don't want financial ties to your db you need to decide if you are happy to gift him the 10% or fight for it just because in principal it should be yours. The path of less hassle for you is certainly give it to him, but make it clear there is no more cash from you ever.

Have you sold the other house? If not I would wait until you have done that, as you may end up with more or less than you think. The numbers might then fall out to a small enough difference that you just don't care, or big enough that it is worth doing something.

I would then get the property your brother wants valued, but also get quotes for house clearance and shipping your brothers stuff to his permenant address (storage is not your problem). Might be a good time to change the locks. By the time you have included in estate agents fees, home owners energy certificate etc work out how much money you will actually get. If it doesn't seem worth the upset caused, simply split the estate so that initially you get 10% of his house, but immediately draw up some sort of document gifting him the 10%. No changes to will and you are not tied to him. It's then up to him what he does with the house. If he really can't afford to move there it will be his problem to empty the house and sell it.

If you do decide to sell, I would simply tell your brother that you will arrange for his possessions to be delivered on a certain date, and will deduct the cost from his share of the estate. Or you will dispose of his items and the estate overall will pay (since you will need to give vacant possession of the house) if you were feeling generous you could just make him pay the difference between disposal and delivery.

Xenia Wed 12-Jun-13 09:05:06

Hopefully he could be forced out of the council house (why should we subsidise his housing as tax payers now he has inherited a whole house of his own?

If you want him to keep the £10k difference and not make him seek a loan for that or sell to pay you that then that's up to you and you can easily do that but not from the children's share. Better to secure a charge over the property for £10k though instead with a written loan agreement for the sum or ask the brother to mortgage to release that amount although lenders I think would refuse him any loans if his record is poor. They can be quite fussy. The charge sounds the better option. you could offer to do all the work for that - say yes you can have the house but we just need this interest free loan and charge which will provide he must not mortgage the property or sel it without your consent/you getting your share.

Jeezaloo Wed 12-Jun-13 09:34:17

I'm sorry for your loss OP, and sorry that on top of the stress of caring for your ill father, you now have to tread through the minefield of executing his will.

I just wanted to add that I'm pretty sure my DMum has a similar will which splits her estate evenly between me, DSis, and all grandchildren. She mentioned this to me years ago when I had no children and my DSis had 3, (so 20% each). It never occurred to me that this was in any way unfair, and I would certainly have never considered asking any of them for some of their share! But I guess everyone is different.

Your DB is being cheeky and you should execute the will as your father intended. That said, there is a legal way to change the will to give him the house if you wanted to do that (can't remember what it's called now). Meet with a solicitor and chat through your options.

Good luck OP. Tough times ahead I fear!

Alwayscheerful Wed 12-Jun-13 09:41:57

It is possible there is inheritance tax to pay as the estate is worth over £325 (unless there was also a spouse with an unused allowance so £325,000 x 2). If there is tax to pay your brothers share will be reduced.

Who has valued the property at £110,000? Is your valuation merely a free valuation letter from an estate agent or is it a formal valuation you have paid for, a "red book" valuation for inheritance tax purposes? There is likely to be a difference between the two. If your brother takes the property as his share of the estate You will save on solicitors fees, estate agents fees, council tax and house and garden clearance costs. It would be reasonable to give him a discount.

The very least you can do is obtain a red book valuation for the property and deduct likely estate agents costs say 2% ? from the valuation figure, he is doing you a favour in speeding up the process of liquidating assists from the estate.

Rolf Wed 12-Jun-13 10:04:59

Sorry about your father, OP. I think varying the will so that your db gets the house is very sensible and generous of you. FWIW, my brother and I are executors of our father's estate. The main asset is his house, which was in a terrible state. Emptying it was a time consuming and upsetting task, it's been burgled twice and is now on the market. Whilst I appreciate how fortunate I am to (eventually) have my share of the proceeds of sale, at the moment it's a bit of a nightmare. We're having to pay council tax, keep an eye on it (and I'm too scared, after the burglaries, to go there), deal with estate agents etc. We've twice had to clean up after burglars and paid to improve the security. If you can make your father's holiday house your brother's "problem" and not have to have deal with clearing it out and selling it, and also avoid having further financial dealings with your brother, you can get on with the administration of the estate in a much less stressful way.

starfishmummy Wed 12-Jun-13 10:38:07

I think legal advice from the ops solo tor is absolutely essential.
There are four beneficiaries in the estate and therefore it is highly likely that all four of them are joint owners of this property; so it is not up to just the op and her brother to decide on what to do with it; the children's trustees will have a say. In my experience, where trustees are involved their role is to protect the assets for their wards; they may want to sell.

starfishmummy Wed 12-Jun-13 10:38:38

That is solicitor not solo tor!

quandry Wed 12-Jun-13 14:10:31

starfish - oh, just to add to the confusion the trustees are.... my DB and I
sad

I really don't think my DF got good advice about constructing his will !

That's another reason why I don't want to fall out with DB, as he will then make it impossible to do ANYTHING with the children's money.
He is completely unsuitable as a trustee - of course he has already suggested that we 'invest' the children's money in the house so that he can live in it!

I've had to do everything with the the 'other' property, which was DF's main residence, and is close to me... I've completely cleaned it out, replaced curtains & decluttered, tidied garden etc, so it woud seem completely fair for DB to 'deal' with the other one, as necessary.

Chubfuddler Wed 12-Jun-13 14:15:05

Oh dear.

If you run into difficulties with him as a trustee he can be over reached by appointing another, but it needs a court order.

I would lend him the money and go down the charge route myself.

Alwayscheerful Wed 12-Jun-13 14:21:47

I suppose the main point here is that you dont know how much each of the properties will actually realise, until the main house sells you dont know if the house your brother wants is 90% or 110 % of his inheritance.

We recently had a property valued by an estatge agent at £450,000- £460,000 (free appraisal), we spoke to a solicitor who said play it safe and pay for a probate valuation, a red book valuation for inheritance tax purposes came in at £420,000.

We managed to achieve £417,500 (only offer in 6 months) so the £2,500 loss was set against the tax bill, the reduction made little difference to the beneficiaries.

Accurate valuations and adjustments are essential if you wish to ensure the estate is being split fairly, it is too early to be arguing with your brother about £10/15 k at this stage it is merely speculation.

hollyisalovelyname Wed 12-Jun-13 14:43:42

You and yours appear to be getting 75 per cent. Why don't you just give him the house and be done with it (him) ? The ten thousand extra would soon go on legal fees to sort an agreement.

Xenia Wed 12-Jun-13 14:52:31

If he with you decide how the children's 50% is spent it is probably going to be best if it is just stuck in a savings account with reasonable interest rather than anything complex as it is going to be very hard to get his agreement to any complex investment. Can the children's money be used to pay school fees for them and things like that under the trust whilst they are still under 18?

quandry Wed 12-Jun-13 20:00:32

Xenia - yes, the money can be used to pay for 'educational purposes', so school and university.

What I had hoped to do was buy a holiday cottage which would then be let out, and then when they each turned 21 if they wanted cash, DH and I would try to buy out their share.

Does anyone know how much a Red Book valuation costs, and how I go about it?

quandry Wed 12-Jun-13 20:03:01

Just to re-iterate, there is no IHT to pay, as the estate is less than £650,000 with a full transfer of my Mum's nil-rate band.

Alwayscheerful Wed 12-Jun-13 22:25:00

Like all things red book valuations are negotiable, sometimes you are charged a flat fee, sometimes a percentage, probably best to negotiate one fee for both houses, red book rules ensure that the valuation will stand up to the scrutiny of the inland revenue.

Alwayscheerful Wed 12-Jun-13 22:29:46

Sorry you asked how you go about it, I am fairly sure the red book is the set of rules the RICS surveyors work to, some Estate Agents will have the relevant qualification or use a firm of Chartered Surveyors, with a member of the Royal Institute of CHartered Surveyors.

worried111 Wed 12-Jun-13 22:49:30

Entirely up to your dad but I have never heard of such an arrangement before - parents leave money equally to their children, and then up to them to provide for own dcs (ime). And it's not that they only receive the money as adults - OP's life will be made financially a bit easier if school fees/university can come out of the trust fund.

EverybodysStressyEyed Wed 12-Jun-13 23:15:28

I have seen this type of arrangement twice

In both cases one sibling was always getting bailed out nd when the parent died the inheritance had been split to take into account all lifetime gifts

From what the op says it sounds like her dh has had his share throughout their fathers life

fubbsy Thu 13-Jun-13 10:26:02

That's your opinion worried, but I have seen it before too. My uncle did it that way because he reckoned the money would make more a difference to the lives of his grandchildren when they were young.

Alwayscheerful Thu 13-Jun-13 11:19:55

All the options you mention happen regularly, they are not unusual, the bigger the estate the more plannning and thought goes in. It is personal choice, and for different reasons. Sometimes people use a deed of variation, because the will was not thought through properly and there can be substantial inheritance tax savings.

In an ideal world we you would all split our money equally between our children but for various reasons one might do things differently,and to be completely fair perhaps consider taking in to account gifts made during a lifetime.

if your children already own assets worth over £650,000 you are effectively giving them an inheritance tax problem, an effective way to address the problem would be to leave money to grandchildren instead, result- Inheritance tax problem solved.

OP's father perhaps addressed the lifetime gifts to her brother in his own way, he left a bigger share to her children, perhaps he gave his will lots of thought. Yes parents can benefit if GC are left money because they have access to money for school fees and university.

MrsGSR Thu 13-Jun-13 13:30:24

The OPs life might not be any easier with the money going to her children. If they go to a school without fees the money will only be used to pay for their university, which very few parents are able to help out with anyway. Everyone I know at university is funding it through loans without any help from their parents. So the money given to the children may not help the OP at all.

worried111 Thu 13-Jun-13 14:16:07

fubbsy I didn't express an opinion, I just said this arrangement wasn't one I'd heard of before. I also said entirely up to the father how he leaves his money.
If he had died without a will, would the default position have been a 50/50 spilt? I think probably yes.

Lavenderloves Thu 13-Jun-13 15:04:37

Lots of people bypass their children and leave to gc.

fubbsy Thu 13-Jun-13 15:58:54

Sorry worried, I wasn't trying to have a go at you. It's just when you said 'up to them to provide for their own dcs', that sounded to me like an opinion.

Samnella Mon 17-Jun-13 21:24:14

I would just let him have it given you and your children already have 75% of the estate and this is your brother who by the sounds of it is not well off. I would draw the line at the extra money by pointing out he has more than his share courtesy of your generosity. It really isn't worth falling out over. I speak from a position of someone who won't inherit a penny so I have different view on all this stuff.

Allalonenow Mon 17-Jun-13 22:26:53

I think the brother is just pushing his luck, and trying the old emotional blackmail on the OP, which no doubt served him well with his father.

He has already had a chunck of his father's money over the years. Why should he get more than his alloted share now?

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