WWYD sister and "inheritance" from parents.

[IHeartKittensAndWine]

My oldest sister has asked my parents to sell a flat they own in order that she and her husband can pay off their mortgage and send their three children to private secondary schools. My parents have asked my middle sister and me for our thoughts before they make a decision.

Background: Fifteen years ago my grandparents died and left my parents a small flat in central London. They kept it and rented it out and gave DSis1 and her now DH a small deposit (they were newly out of uni and had no savings). They bought a large house in a part of London which was then down-at-heel and is now very fashionable.

Although they aren't well off financially they have a LOT of equity and could just as easily sell their house (a neighbour with a near identical property has just completed a £1m sale), move to the part of London where my middle sister and I live mortgage free and have enough left over for the older two, and pay for the youngest one out of the salary freed up by not having a mortgage. We have looked at prices for 4 bed houses in our area and there is good stuff in the price range which would enable them to do this. The part of London middle sister and I live in has a lot of advantages but is more suburban and less fashionable.

Oldest sister wants to do this because the state secondaries in their area are pretty poor. She has said that she will relinquish any claim to further inheritance if they sell the flat and gift her the money. Middle sister annd I were also gifted parts of our deposits from our parents BTW so we are not jealous. We are keen for our parents not to do this because 1) my grandparents flat would be perfect for an elderly couple and they could live very happily on the rent or sale of their house as they come to retire on very shrunken pensions 2) My parents were always very against inherited wealth and clear that our educations and deposits were all we should ever expect and we feel that oldest sister is trying now to move the goalposts.

My parents have asked is for our thoughts and we are thinking about saying all that I have put down here. I am aware that rather than a simple "no" the "why don't you move" proposal sounds very interfering in oldest sister's life... but at the same time I am keen not to say no without pointing out the alternative. What do you think?

I think you are right in all you say but you should tell your parents that it is their decision and let them come to their own conclusion. I say this because it seems a sure fire way to fall out with your sister if you give your opinion. If they do sell the flat make sure your parents change their wills to reflect this. I hope they have wills by the way!

Oh yeah and everything Reality says about your sister....but I was trying to be nice!

Wow.

I think your sister is incredibly cheeky and presumptuous.

She's already been given what I assume is a private education AND the deposit for a house. Way more than most can dream of.

'She has said that she will relinquish any claim to further inheritance if they sell the flat and gift her the money'

Unbelievable. Almost literally.

as your parents ask I would tell them how you feel about this.
I have no clue about inheritance law in this country, so I dont know if this is legally possible (her not inheriting since she has already received her inheritance).
I am a bit , your parents circumstances can still change and they might need all the money they have for themselves and then you might end up with nothing while your sister has it all...
it seems unfair but in the end it is your parents decision what they do with their property.

I think since your parents have asked for your views then it's fine that you express them honestly as you have above. I think your reason no 1) is particularly valid.

However I wouldn't offer alternatives as to what your older sister should do unless she or your parents specifically ask. How she deals with her situation should the money not be forthcoming is her business.

If they want private education badly enough they should find a way themselves.

Does your sister work?

I think your sister's got a cheek, and that your parents should tell her as much.

If there are other options open to her, then she should take them. Has she asked if they had plans for the flat? Has she consulted you and your sister? Has she always been this demanding?

Wish I knew anyone I could ASK to sell something so we could pay off OUR mortgage and send DD to private school....

Thanks for your posts... yes, she has always been a little, er, forceful! Middle sister and I don't WANT to receive an inheritance at all, we'd much rather our parents enjoyed their retirement and one of my concerns is that if they do this they may feel they'll have to scrimp to make things equal in the long term. TBH if they do this they'll have to scrimp anyway, as they'll have to downsize without having the full value of the current house sale.

I know how incredibly fortunate we are BTW so hope this doesn't sound spoilt.

(Actually I totally agree with everyone who says its a bloody cheek, but was trying to put a reasonable measured response as I have an older sister rather similar to yours and I thought my view might not be very objective - My middle sister and I are often totally gobsmacked by her demands on my parents.)

Also, it´s not that easy just to gift money, is it?

Suppose your parents go to a retirement home/need full time care & there is nothing left for you & your sisters.

Will oldest sister do anything about that?

Oh, and if they DO gift her the money they better be in really good health. It's a gamble (and there's no tactful way of putting this, so here goes) she'd better hope they don't peg it in the next five years or she'll have to pay inheritance tax on everything they give her.

She sounds very selfish TBH and money grabbing. Until the time comes for your parents when they feel ready to give you guys some financial help as they have in the past, surely as independent adults no one should be expecting, let alone asking, for such a thing.

If she wants certain things for her children then she should be willing to make sacrifices first, and failing all else, approach your parents. She could very well sell her house as you have stated and that doesn't sound unfair if she really wants her children to be privately educated, it is a luxury and not a given whatever your parents might be able to afford.

OK - let me start by saying that, when you read my thoughts below, it will be more than obvious that i am not a lawyer or an accountant.......

Surely there would be quite alot of tax due on profits from properties that have appreciated so wildly? Find out what that number would be.

Also check into how much money your parents are allowed to 'gift' your sister (or the rest of you) each year - iirc, there is an allowable amount to prevent wealthy people giving away assets to avoid paying inheritance tax.

Finally - do some sums. Roughly how much is the private secondary tuition per child, and then multiply that by 3 children, and multiply again by number of years the children would be in secondary school. How much is owed on your sister's mortgage?

If your parents decide to do what your sister requests, it goes without saying that they should ensure they have enough left over to provide for themselves and to give equal amounts to their other children. Definitely have a legal document drawn up stating why your sister isn't included in the will - and if possible perhaps she / your parents should all sign it so that she is unable to argue later?

And then there is the emotional aspect/family dynamic of all of this - which is a whole other kettle of fish.....

What makes her think your parents won't need the money at some point?

Or is that not a consideration for her?

Selfish cow

Diddl, you're right its not that easy to gift. Middle and I will be out in the cold if they go into a care home, but I wouldn't mind if that was neccessary.

Oldest sister does work btw - glamorous sector but poorly paid.

Glad I'm not the only one with a demanding oldest sister... my mother once said she didn't think DSis1 had ever forgiven us two for being born !

Your sister may not have thought of this- but if your parents ever require nursing beyond what the state can offer, those claims on the inheritance that she is so nobly offering to give up may actually be needed for other purposes. In the current climate, the last thing I would ever do would be to allow an elderly relative to divest themselves of something that may mean the difference between proper nursing in years to come and no nursing.

I think it was very rude and presumptuous of her to ask. who does she think she is? if your parents had offered to do that then that would be slightly more ok, but the priority is your parents. i know from personal experience that money can vanish. if this went a head and something happened would you sister bail your parents out? she has loads of options if she is so insistent on sending her kids to private school. so she wants the lovely house mortgage free and the kids in private school and your parents to pay for it? She could count herself lucky that she can do it without her parents help. private school and a mortgage free life is a luxury 99% of us could only dream off. she seems like a lovely person using her parents as an atm. If she has had the gall to do this, what will happen when her DCs go to university?

Tell her to get her head out of her own arse.

Aren´t you only allowed to gift something like 7000GBP-and as said, the gifters have to live a certain amount of years after this so that tax is not paid.

If parents were to do this, wouldn´t the only way be for them to seel the flat & directly pay the school fees themselves?

Diddl - she is proposing that they sell the flat, gift her the outstanding amount on the mortgage (about 40k - to live in Zone 2 London and she's not yet forty - I COULD WEEP!) and pay the school fees directly.

Another thing that could be relevant since noone knows their own life expectancy, is that if you parents die within 7 years of giving your sister this money then the amount they have given her will be subject to inheritance tax just as if she had inherited it on their death. This is to stop people giving things away when they may be close to death to avoid inheritance tax. I know this as fil (a retired accountant) calculated carefully the amount he would give us towards our wedding to ensure it fell below the threshold for this to apply. I can't remember what this threshold is by the way but clearly less than the value of a flat in central London!

Feel free to correct me if things have changed in the last 7 years...

Giving your sister the benefit of the doubt for a momment is this just a fairly crass way her of saying "look I know we are all going to inherit at some point in the future - is it possible that you would consider gifting us the money now when we feel we could put it to better use rather than later?"

That aside I think you should probably avoid getting to involved in your sisters (or indeed your parents) affairs.

In your position I think I would tell myparents it was a matter for them and I had no strong views.