To make my brother pay interest?(28 Posts)
I am only a second time poster, but I lurk from time to time.
I am one of five children (2boys and 3girls), and my parents have already decided who is going to get what at their death. We will all get equal parts, and everybody signed the official papers last christmas.
The trouble lies with the fact that one my brother will inherit the family home, which is by far the most valuable asset, which means he has to financially compensate each of us to make the five parts equal. The sollicitor supervising the whole thing told us it was common practice, as my brother is planning on giving us the money in several payments over several years, to add interest to make up for inflation. My brother agreed at the time, not happily but he wanted to go ahead anyway.
Today, it seems he is still not happy, and one of my sisters has decided not to take interests after all in the name of family harmony.
So, I don't feel unreasonnable but maybe I am without realising it?
Sorry about any mistakes, english is not my first langage. I have to go take care of DS now, but I will check for answers later.
I think it depends - if he is having the house because that is what he wants, then he should pay interest. If he is having it because it makes everyone happy to keep it in the family and you wouldn't all want to sell it, then I think you should be more generous.
I get that it is sensible from your parents' POV to decide what should happen, but the fact that six months later you guys are squabbling over fucking interest when they are still alive, makes you and your siblings unreasonable imo.
I don't think you're being unreasonable. The solicitor says that this is how it's usually done, it's been sorted and signed. Your brother may not be happy about it but the fact is that he agreed to this and went through with it. Don't feel guilty.
Moomaa. I think he got the house (my parents decision) because his business, which used to be my dad's, occupies the terrain belonging to the house, so I guess it makes sense.
GeekCool. I know what you mean, it is the kind of thing I always thought happenned only to other family. How wrong I was, we are just like everybody else after all...
YANBU.. The whole point of getting legal professionals involved in these kinds of matters is to make it less about personalities or relationships and ensure that the participants can't wriggle out of their contractual obligations at a future date. What your sister does is up to her, of course. But, if I were you, I'd keep him to his side of the bargain.
Cogito. Exactly! Like in all family, we have our fair share of old resentments and personality clashes, and this is why I thought it would be best to separate the financial from the emotional, so it wouldn't make things worse.
Have you considered that you, and your sister, might need that interest at some point in the future? Imagine if you agree now that you won't take any interest "for the sake of family harmony", how resentful you may feel in the future if you do need it. You never know what's around the corner.
The fact that she has waived the interest doesn't mean you have to. If someone brings it up, just say "Did she? Goodness me." And then continue to insist on what was previously agreed.
YANBU. If he doesn't think he should pay interest to his siblings then he can take out a mortgage and give you the money.
If you waive the interest then it wouldn't be a fair five way split.
He is not worrying about doing the right thing by you and giving you your fair share. What justification does he have for not wanting to give you your fair share? tell him if he is not happy, he can sell the house and land and give you your share that way!
Karma. He says that for him, you shouldn't ask a family member for interest. He also said that they had a similar situation in his wife's family, and they decided on no interest.
Is he starting to pay you the money now or will it be after he inherits the house?
You realise, of course, that property values (over the long-term) usually outstrip any measure of general inflation? He does. If you take the interest, he's still got a total bargain and if you waive the interest, he's taking you for a mug.
Then tell him to get a loan and pay you your share when the time comes.
Families also shouldn't knowingly take more than their share, knowing that they are directly taking it from the pockets of their siblings.
Seriously, he is not worrying about doing right by you, so I think you need to disregard what he wants. Ask him, point blank, if he can explain to you why his share of the inheritance should be worth more than yours?
Morticia. He is supposed to start payments soon, yes. I guess that's because if we wait until after my parent's death, the evalution of the property would be obsolete?
It's not up to him / your sister / or anyone else.
It is written into the will how the assets are to be divided and that is that. It is between your parents and the solicitor, and it's good that you all know the content. Knowing the contents doesn't mean you get to try to change them.
He is being an arse. YANBU. He needs to stick to the plan.
Also re. property values what Cogito says is true. How is this interest even going to be worked out. It may not be fair anyway, depending on what is to be used to calculate it.
See, I get that this is all very tax efficient and all blah, blah, (I presume you've also sorted out what will happen if your parents need money to pay for care in later life now they've divested themselves of all their assets - 3 out of 4 of my grandparents lived long enough for virtually their whole estate to be needed to pay for quality care, the fourth died aged 60), but it can destroy families if you're not careful - and your poor parents get to watch their good intentions drive their children apart.
Your brother is being unreasonable and grabby by the sounds of it, but maybe he feels that although the house is more valuable, and will increase in value, he's never going to be in a position where he can realise that value (ie sell it) as it's so tied up with his business, ergo he ends up having to take out loans to give cash to his siblings while ending up cash-poorer himself.
It's difficult and maybe you all need to sit down face to face to sort it out. I dunno.
When is the house being signed over to your brother?
This sounds potentially very messy to me.
Sardine. All the assets stay my parents' property until their death. So the house will be his only then. But the repayments will start in the next few months.
I have to go give DS his bath and then dinner. I will be back after that.
Thank you so much everyone, you are being really helpful.
Catus - so what happens if your parents need to spend some of your inheritance before they die? Is a family member guaranteeing to look after them in old age? Because if your brother is guaranteeing to keep them in their home and provide care for them, I'd gladly waive any interest for that.
Get a plan and stick to it. He pays interest according to this plan. So no moving the margins unless you scrap and get a new plan entirely, because the way your folks are handling it now it sounds like a recipe for disaster.
Your brother is being unreasonable.
What if your parents need to sell their house to fund residential care? Will you all have to pay your brother back?
Why should he inherit a house which may be work several hundred thousand pounds more when your parents die, than he has given you (if you see what I mean).
You need to take further advice on this. Work out the possible figures to show how much more than you he will inherit if the house increases in value by 1%, 3%, 5% etc and doesn't pay interest to you all, and show it to your sister. Is she happy for him to inherit sustantially more than her? The rest of the siblings need to be united in this.
I do think there has to be some recognition though that a house which he may never be able to sell is different from, say, £20k in shares (although obv investments could change in value as well) or jewelry.
Maybe there could be an agreement that the difference in value would only be paid out of any sale proceeds.
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