How to approach an inheritance conversation

[Ifilikedthewayilook]

This sounds very dispassionate, so I’ll say first neither of my parents are in good health and my sister and I love each other very much and get on brilliantly.

My sister and I will inherit our parents property. It’s 3 bedrooms but small, needs significant upgrading but is in a good area with great schools, a few yards from the beach and has a big garden with off road space. It’s probably worth £120k as is. My sisters kids who are 12 and 6 years older than mine are either well on the property ladder or ready to move abroad. When my parents pass I would like to buy my sister out and sell the house to my son. I’ll hopefully be able to help with the deposit though he’s saving hard too. I couldn’t both buy her out and gift it and neither would I want to - he’ll pay his way. With upgrade that we could do with the help of professional builders and family skills he could increase the value significantly. The semi next door has sold for £200k with upgrade but half garden and no off road space.

Is it fair of me to try to buy my sister out at the current market price knowing the upgrades will increase the value? She’ll know this too. The family skills will come from my partner and my son’s dad rather than my sister. She can always refuse of course and I’d make sure she takes advice.

I think she’d probably love the idea of our childhood home remaining in the family for a while longer, knowing her kids weren’t potential buyers. But I want be fair and need objective views. Cheers

Your mother has the right to make a claim on the house as this has been her home for many years and if she has no where else to live. Have
you asked her if she intends to carry on living in the house? If she has to go into care the house might be considered claimable as her asset.

I’m no expert in this, but when I was doing my law degree, we did clinics and often had people attend who had this type of situation. In some cases, your mum would have a claim to the house, and she might be deemed to have beneficial interest in it.

But I graduated years ago and don’t work in law, so if you’re sure this is all good, ignore me!

Will you and your sister be okay with your son doing whatever he wants to the house? Is he keen on this?

My PiLs have a house and once referenced that they’d leave it to DH and we could live in it... DH acted like it was a lovely idea because it seemed hurtful to do anything else (and who knows what the future holds! Both are healthy and happy now) but neither of us would want to live there. For a start, it’s their house, and we’d have to make massive changes to make it feel like ours. Secondly we don’t really want to live where they are, and like every different houses to the one we’ve got... and thirdly I feel like it’d be weird and pressured to own their home. DH grew up there and he has family close by. We’d be worried about upsetting them if we changed anything or decided to sell...

If everything else is sorted, I think offering current market value at the point that you’ve inherited it is fair, if your sister is okay with it and you’re both in agreement that selling it to your son makes it his house, that he can change or sell at will, with no interference or pressure.

Might your sister not want you both to do up the house yourselves and sell for a profit?

@stuckinarutatwork it does need an extension but it has a much bigger garden and off road parking that next door doesn’t so my estimate may be off and we’d definitely get 3 valuations.

The solicitor who drafted the Wills was clear that as long as no equity is legally transferred to mum, the house cannot be considered as her asset for care home fees. Dad’s will gives mum the right to remain in the house for life unless her circumstances significantly change eg she remarries. Which will never happen. She barely leaves the house. She’d never want to move, the house has been her home her whole adult life and she was born and grew up in the house opposite.

My sister may well want to jointly renovate and sell at a profit, or rent it out, and if she does then that’s what we’ll do. My son will benefit from that via me either way.

I bought my house in the next, cheaper postcode 5 years ago and the same houses are now selling for £100k more then I paid. The area is a “boho ‘burb” according to The Times. My parents house is a mile away. I think we’d be fools to let the house go, so continuing to jointly own, renovate and rent will be a very attractive option for us both.

OP, I am now in the situation where we will need to sell an unmodernised house, the margins for us are probably a lot less and tbh the extent of what is needed would not be financially viable. However there is no central heating and I am dropping hints to DH that we should do that at least.

Anyway back to the point I was meaning to make it is maybe worth trying to push the central heating again, when MIL became very much more poorly the lack of heating outside the main living rooms was an issue. There were grants available in my area for those who have no heating and the criteria was fairly broad, we were starting to look at it (needed to apply for attendance allowance) when she sadly became very ill and passed away in a very short space of time. Had she not been in hospital Dec to Feb we would have pushed it a lot more this year.

In your position I'd agree with your ds that you get 3 valuations on the property and you agree on the middle one 'if' she's happy with that arrangement.

However she might also want to buy you out, or even renovate the property (splitting the costs) and sell to make more money.

You need to find out if she has any ideas on what she'd like to do before you make any decisions

That’s a good point @AfternoonToffee

Absolutely @harknesswitch. No decisions can be made until we’ve had a discussion. Which is a way down the line.

Your sister might have other ideas
Perhaps she would want to do it up to a great standard before selling
Your son could find any doer upper doesn't need to be this one.

That’s all correct @namechanging202020. I won’t know till we discuss it. I was after views about approaching the situation fairly if it transpires she is happy for me to buy her out. And I’ve received good advice and suggestions.

I think it's very important to have a discussion re wills and inheritance issues.
Speaking from experience I wish I'd known what my parents had planned. It's caused a lot of problems that's taken a lot of sorting out and has caused bad feeling.

When dh and I did our wills we explained why we'd done what we have done, gave all the kids a letter to explain why ( ensuring fairness all round) and told them if they had any questions ask us now. We're a blended family, second marriage for both of us and children on both sides, none jointly. We've bent over backwards to ensure that none of the kids are ever made to feel like I did when my mum died.

rookiemere is right but you don't want to hear it. Both of your parents are still alive, don't you think it's a tad ghoulish thinking about what you want to do with their house after they have died?

Apart from anything else, if one or both of them need to go into a nursing home, their house would be sold to pay for it so there may be no house to worry about.

Not at all. Its prudent @Crankley and the care home fees issue has been commented on. My dad has months to live, death is staring us in the face.

@Curlygirl06 our parents discussed their wills and my sister asked for a change re her position. Our parents had drafted so that our respective share passed to our kids in the event we died before my parents did. My sister asked could hers benefit her husband as based on her husbands own experience, they’ve drafted their wills to make provision for their kids in the event of remarriage. My parents were happy to change it as she asked.

So if you buy a house when your married, will it to someone else then why doesn't everyone do this to stop the asset being sold to pay for care fees for the surviving partner?

I would suggest mum get some independent legal advice tbh.

@Canigooutyet, my mum didn’t buy a house. My dad did. If mum had already passed and dad now needed care, absolutely his home would be sold to pay care fees. That’s his liability. My mum has nothing to sell, no asset, no liability. Leaving a house to someone in your will isn’t what avoids care home fees.

Dad could have bequeathed her the house and then she’d be liable for care home fees as she’d have an asset but both wanted to avoid that hence the clause to remain for life.

Yet we are constantly told to get married for the legal protection this offers. But seems not and they have the same legal rights if they hadn't been married which is nothing. Will remember this when unmarried mums are told to get married as unless there's something in the will to protect them, they could be kicked out on their ass.

I’m sure mum would have legal protections irrespective of the clause in the will, but she still wouldn’t own the house.

I've never understood this thing of trying to avoid the house being used for paying for care in old age.

I'm in my 70s and although disabled, don't need to be in a home. However, if/when the time comes, I will have no problem selling my house to pay for the very best care available. It seems others are happy for their loved ones to go into a home paid for by the council which will be far from the best and likely smell of pee. But you'll get half a house so win/win right?

Have you visited any care homes @Crankley, private or council or run?

Yes I have visited people in both types. I noticed a marked difference. That's only my experience, maybe yours is different.

I think it might be worth exploring what you might do if your mum needed care and her preference or the better option required some private funding. Some care homes are pretty awful. If you have dementia you need quite specialised care. Whatever the legal ins and outs of it not being her asset you do of course know that if it was going to make a difference to her care and well being morally you should sell the house and help fund her care. Have you considered that? That is the problem with making these plans you are thinking of it as yours and your sisters without thinking about what will be best for your mum. Of course it might all work out well, but for many people they face very difficult choices and it is undoubtedly true that not all care homes are equal.

My ddad has been very, very poorly for the last 3 years. Luckily we're not waiting on an inheritance
I've made a will but if I heard my dc planning this kind of thing I'd make sure I spent the lot.

Absolutely Cansu. People posting seem to think

Pressed too soon. People seem to think this is a firm plan. Right now it’s an idea in my head. As has been articulated, many things could happen which could change my idea. I was posting to ask for advice on how to approach the conversation should I be in a position to have it. Would it have helped if I’d prefaced my post with a list of all the variables that could happen then ask that I’d none of those happened, how to approach the conversation?!

I accept threads like this bring out an element of bitterness perhaps for people who either haven’t or won’t inherit, or whose kids won’t inherit from them.