Inheritance - wwyd?

[JustQuickone]

I’ve been a fellow mums net user for years but first post so here goes! More of a what would you do?

I’ll start off with a little bit of background. I am an only child (married with DS4). My mother is also an only child. My grandmother has recently passed away leaving her full estate 4 bed house to my mum as we always knew was the plan. My mum has always made comments about how she does not need to sell my grandmother’s house and that she would gift it to me. My mum is set for retirement with plenty savings in the bank and no mortgage on her property. I am in no way expecting her to gift me my grandmother’s property and I made her an offer to buy.

My grandmother’s property is within walking distance to my mums house which my mum always said would be ideal for me as she could help with my child who has disabilities. Now the tricky bit comes in. After all the years of comments on how much she would love me to live in grandmother’s property she has now made me an offer to buy it at x3 the price of my current mortgage. I have explained to her that I appreciate the offer but it’s completely out of my budget and I wouldn’t be able to afford the monthly bills due to only be able to work part time as I care for my disabled DS4.

My mum seems to be very annoyed that I’m not jumping for joy at the offer that she made me and it seems to be falling on deaf ears when I explain that I wouldn’t be able to afford it. She has said numerous times she doesn’t want to put the house on the market as she would rather it stayed in my family and belonged to us and she doesn’t need the money. I don’t want to cause any upset as she has just lost her mum and I’ve lost my grandmother. It would be absolutely life changing for us to have my grandmother’s house as the size would be amazing for my child with ADHD to run around more freely.

So my question is, do I just explain to my mum again that it’s out of my budget and that she’ll have to put it on the market. She keeps asking when we want to move in but yet keeps sticking with the price I said I couldn’t afford. Thanks for reading,

I have a mother who tends not to 'hear' me when it suits. I've found the best way is to just tell it plain and straight. "Mum, I have told you I can't afford it. It would triple my mortgage. Either make it affordable so it can stay in the family, or sell it." Thereafter, just, "Can't afford it," broken record style.

Is it possible that what your mum was talking about "giving" to you was the opportunity to buy the house before it goes on the market?
I have a more distant relative who has put this in her will for me. I have to try not to laugh when she says things like, "I want to make sure it's given to you." Because it sounds like she's talking about giving me her house. She's talking about giving me first dibs on putting in an offer.

Does your mum need to raise fund from a sale to pay Inheritance tax? Not knowing the value of the house and estate this could be the reason that she needs to sell and perhaps she did not realise this when promising to pass the house directly to you.

I think you need to have a frank discussion. I appreciate she’s lost her mother but that’s not going to change the fact you can’t afford the property.

Nothing changes that.

Please note if she wishes to vary GMs will, it needs to be done within two years.

Say - the maximum I can afford is XXX if you think you can get XXXX you should definitely put it on the market.

Maybe she's a bit clueless about your finances/not having much money.

My ils are fairly well off , when dh and I were younger and didn't have much money they would suggest going away for example and imply they would cover most costs. We would need more information to know if we could afford it. They couldn't seem to get their heads around it.

I would disagree with most PPs opinion here: she does not owe you selling you the house for any price, so I see nothing worth criticizing her. You said she has stated throughout the years how happy she would be for you to move there, that’s consistent with offering you buy the house. You both are just not agreeing on price.

If you have explained that you can’t afford her asking price, why don’t you ask for the discussion to be put on hold until the near future and see if she is willing to re-assess your offer or you are in a better position to consider hers? Both of you are grieving so unless she really wants it out of her ownership, is there any rush to close the sale? You can also offer rent it if you are so willing to move there.

Also, hope I don’t sound cruelt and I empathize with your DS disabilities (did you mean the ADHD you mention at the end?) but it is not relevant to your discussion with your mum. I think you mentioned it here three times to make yourself more of a victim but it does not change the picture as it is her house, she can do as she pleases and both of you want it to go to you.

Has she had any financial advice? She may not be aware that her savings would be eaten up by care costs. You might need to be honest and say how pointless it is buying off her if you are going to revive it anyhow, unless she has plans for the money in the meantime. Just say you can't afford it and leave it be, if she doesn't want to sell on the market then she will have to re-think.

My DM who is 84 received a large chunk of inheritance, was overwhelmed with the idea of it in her bank but hadn't thought about it getting eaten away if she needed care.
We got some advice and we did a deed of variation to share it with my siblings, we have it available should she need it. She said we would have got it eventually and didn't want the hassle of having it now.

Frank conversation time.

Eg. Mum I live in a house worth £300k. I can't afford a house worth £900k (or £150k/£450k or whatever the figures are).If I could don't you think we would already be doing that.

I am afraid I will have to pass in the offer that you sell to me.

It’s x3 of your current mortgage but you’re not saying how much it is in respect of its market value - it may change posters opinions to know it’s 30-50% of its listing price OP.

I suspect that what the mum was saying was she would give the op first refusal, and the op heard that she would gift it.
If she'd really always wanted to give it to the op, then surely she'd have said to the grandmother to leave it directly, saving a lot of hassle for both.

People do hear what they want to hear often, and it's easy to both feel that they were clear in what they meant.

I also noticed the op is written in a way to gain sympathy for herself (as many are naturally), things like the space for her DC with ASD is actually irrelevant to the position. It's really the same question whatever the op's position on finances and housing.

The op is in a pretty fortunate position, assuming she doesn't fall out with her mum over this and get left nothing. Not many people get their entire grandparents estate, and even if her mum sells it she'll eventually come into the money.
I'll get 1/12 of one grandparents estate and 1/6 of the others for example, by the time it's divided between parents and their siblings and me and m siblings, and that's pretty fortunate for me too.

What is the house worth?
What is your house worth?
How much is your mortgage?

Please let us know, so it'll be easier to answer WWYD!

If you really can't afford it, then there's nothing you can do except keep repeating that it's unaffordable.

I wouldn't try to negotiate. I wouldn't try to stretch your budget. Just repeat that you can't afford it as it is 3x your current housing cost which is more than you have available in your budget. Then change the subject.

All you can do is keep telling her you can't afford it.

If she won't accept that then ask her what she thinks you mean when you say you can't afford it because you literally do not have enough money and you don't understand where she thinks you will get an extra £x per month.

Some people (lucky people!) genuinely seem not to understand that can't afford it can mean literally do not have access to money. They think you've got the money but don't want to spend it and that "can't afford it" means you want to use the money elsewhere or not use your savings etc (because of course they think you've got savings)

If it was me I would say to my mum look, I get £X per month and my bills are £Y. How do you not understand that I literally don't have enough money to pay you £z?

But I know many people would not want to disclose their finances so you may not want to do that.

Erm, OP clearly mentioned her disabled son to provide context as to why her affordability on the house is at a certain level, not to gain sympathy...
OP I think it's worth having another chat with your mum and being specific 'a mortgage lender will only lend me xxx amount, my income is xxx and my current mortgage is xxx which leaves me with xxx to live plus I need an emergency pot etc'
I also have a mum who doesn't 'hear' me sometimes and I find being ultra specific is the only way to solve it.

i think a dose of very clear honesty is needed here, how about: for gods sake mum which part of I can’t afford it do you not understand? That I won’t be able to heat and it and we will freeze all winter and i won’t be able to buy food and ds and I will starve and then we will default on the mortgage and get kicked out as I can’t afford the repayments even without buying food and heating. It is out of the question , it is really upsetting that you keep bringing it up, and I wish you’d never said you’d like me to have the house, we are going now.

I think you need to be very blunt with her

Just keep saying "I can't afford it mum" until she gets the message.

Why is she no longer gifting it to you? Does she want/ need the money now? Could she gift it to you and you can pay her the equivalent if your current monthly mortgage? How old is your mum?

Bat it back - ‘Why have you changed your mind on this mum?’ Every time.

It seems to me that OP had been under the impression that the house would be given to her. Her DS disability has been mentioned to avoid the 'increase hours' etc resolution. It doesn't actually matter whether mum is offering to sell at a 5% or 95% undervalue - the fact is OP cannot afford it.

Tbh, if OP has a dc with ADHD and mum cannot grasp that that OP cannot afford it she probably has ADHD too. In my experience with my ADHD MIL and money they only way for her to understand is to be really blunt bordering on rude.

Well ultimately you can't afford it at the price she wants so it'll either be empty or she can sell it outside the family.

Another thought.
If she wants to keep it in the family but you can't afford to buy it outright, could you become joint owners?
So you port across your existing mortgage and your Mum retains part ownership. Depends on if you think this would work in your circumstances.
Definitely get legal advice though.

is she needing to sell it to pay the inheritance tax? That will have been set at the valuation of the property, less the allowances.
If she sells to you at a cheaper price than the valuation she still needs to find that same amount, and there could be issues around gifting/capital gains that she doesnt want to get tied up in? She could also be liable for a depreciation of assets down the line should she need care and her income / assets are taken into account - they will again view the full value of the house, not the amount you paid. Im assuming she may have had some financial advice.
Have you actually asked her?

As pp have said the value of the properties are relevant. As is your long term earnings potential and your ability to pay to run the house as well as maintain it.

I would actually write to your Mum and thank her for giving you the first opportunity to buy the property. Then set out why you can’t afford it. Putting it in writing is formal but makes it clear to your Mum you mean it.

There are other options you could explore but they are dependent on you getting proper legal advice, understanding the risks and being able to realistically afford the costs now and in the future.

Start by getting a good idea of the value of the property. Critically asses what work you would need/want to do to bring the property up to date/your style e.g. carpets and a lick of paint or new kitchen/bathroom, re-wiring.

Secondly go through your Grandmother’s bills to see realistically how much the house costs to run. Do the same with your own outgoings as you may find that you pay for far more in some areas e.g. shopping, cars, mobile phones, digital tv etc. This will give you a good idea of your potential expenditure if you moved in - can you really afford it? Be very realistic.

If, and only if, you can afford the running costs and potential maintenance then consider the following:

• offer to buy a % of the property and live there. This would give your Mum ££ but not the full value. Your Mum would still own a % and in the future you could offer to buy more. You would own as Tenants in Common but must have a deed of trust in place that sets out what would happen in a range of circumstances e.g. if you couldn’t afford the property, divorced, died etc. All of these could mean you have to sell the house in the future.
• You buy the house for market value and your Mum gives you a private mortgage. You then pay your Mum your monthly mortgage repayment. Your Mum would get a lump sum and a monthly income.

I cannot stress enough you and your Mum would both need to get your own legal advice. The risks and costs need to be understood e.g. impact on benefits, divorce, if you die etc.

I personally think x3 times current mortgage is too much of a risk.

Difficult.

Your Mum often talked about giving it to you… but you said you didn’t expect her to do that and offered to buy it… and now she has set a price you can’t afford.

This is a big complicated emotional and legal mess, and I am sorry about the loss of your grandmother.

I think you need to find out / get advice on all aspects of this and ask your Mum what her long term priorities and needs are.

e.g
Does she need / want capital or income from your grandmothers will?
Does she want to keep the house in the family?
Does she want you to live nearby?

If she wants you to have the house, and you not pay for it, it would be better to do a Deed of Variation on the will and you inherit it direct. You can do that any time up to two years after the death or probate, I think.

If she sells it to you, SDLT will apply, and there are rules about selling at below market rate.

She could keep it, let you live in it rent free and you rent out your own house. But then I think capital gains tax would be incurred on her death because it isn’t her primary residence.

She could give you the house (preferably by Deed of Variation) and you could sell yours and commit to giving her, as a gift, a sum of money or a regular sum of money, on her birthday…

She is probably in a state of confusion and conflict at the moment. Was it wishful thinking when she used to say she would give you the house?