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?

Very bad idea.

There are too many "what-ifs?" relating to your parents' future circumstances, living arrangements, health and so on.

Fine, if they want to release their equity in the flat. Their business, their money, their choice. But is ridiculously entitled of your sister to expect the full benefit of that choice, and may completely complicate your parents' future finances, and dealing with their eventual estate.

She will give up any "claim to further inheritance"!!! What claim? She doesn't have a claim beyond what your parents want to give her. Cheeky cow. I would be utterly offended if I was your parents or if my kids ever asked me to receive their inheritance early!

Do we share a sister Iheartkittensandwine ??? surely there can't be 2 older sisters out there who are so self absorbed and grabbing. The world is a sadder place than I thought knowing that my sister is not an unfortunate mistake of nature

In answer to your question, as your parents have asked your opinion I'd tell them what you have voiced in your op and leave it up to them to tell her "no" and give any explanations/ make suggestions they see fit as her parents.

How does your other sister feel about the request?

Your sister is a cheeky bitch.

If you parents need care in their old age then surely their assets will pay for it? Thus leaving you and the other sister with no inheritence.

I'll bet the cheeky bitch sister realises this too and wants to get in early with her grabby ways.

well, I'm sure this sister would be more than willing to sell her house (and downsize) to provide for your parents in their later years, should the need arise......

By the way - while it is admirable that you and your other sibling are not counting on an inheritance (or scheming about how to get £ now before your parents die), don't be a mug. You would be foolish to let her take advantage of your parent's generosity/kindness, and to forego your share in order to fund your sister's aspirational lifestyle.

"but I wouldn't mind if that was neccessary."

Of course not.

But your parents might.

I used to work in this area as an accountant(IHT and will planning),I have changed direction somewhat now so my technical knowledge is not as up to date as it was but I have lost count of the number of times I have come accross parents who have,with the best intentions,impoverished themselves in their old age by gifting assets to early and too generously.A gift of this nature would need to have proper planning to avoid IHT and CGT ,and general family mayhem.Your parents might like to consider whether their plan was to leave their estate equally to their children for example or skip a generationa and divide equally between grandchildren.

In addition the field that I work in now is conmnected with care of the elderly and infirm and you would not believe how expensive that care is,in my opinion anyone who is not either very rich or very poor is going to get very little help from the state in the future and the price of care is eye watering.

Generally when this sort of proposal was put to me by clients I have to say I usually advised against it unless they were very very sure .

cross posted with several people who have said same as me regarding inheritance tax so presume that at least a variation of what I have said still holds true.

Your sister is effing cheeky btw. I think it is up to your parents but I think your sister is either being very selfish (at worst) or very shortsighted (at best). I understand your reluctance to voice your concerns for fear of causing an argument with your sister but I think this would potentially cause lots of problems within the family if it goes ahead anyway.

Since your mum already recognises that your sister is a bit "demanding", it should make it easier for you to express your concerns. Just point out the obvious - if they keep the flat they will be able to move into it if/when the time comes and live off the income from the house sale. The house and flat are theirs to make use of, and you're not looking at this from the pont of view of your own inheritance later, buit you want to be sure that your mum and dad are comfortable as they get older. And (if you/they are not uncomfortable about the subject) the issues of care homes and inheritance tax if things should go that way ("God forbid, but you are sensible careful people who have never wanted to be a burden on the state" etc)

Oh lordy no. So many what ifs...

What if your parents died 'too soon' (obviously any time is too soon but I mean from a gifting POV) and tax was due on your DS's share and she didnt have the money?

What if she decided to challenge the will when your parents died. Even if someone doesnt have a legal leg to stand on, it can still happen; it happened in our family and the legal bill was expensive to defend against the claim.

What if she got divorced and her by then XH got a big chunk of your parents money. how would they feel about that?

What if all your parents money was used up providing good quality care for them, and then the money ran out? How would you all feel if they then had to move to receive free care? What if that care wasnt good enough?

Would your parents standard of living be reduced if they sold the flat and gave up the rental income? How could she live with herself if that was the case?

I do hope you feel able to tell your parents how you feel about this.

"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."

I think I have misunderstood this-your parents would lose a property & your sister would gain 40,000GBP?

If so, surely that´s no where near enough to privately educate three children?

extraordinary.

what audacity your sister has. all i can hope is that your parents see some sense and not sell.

the parents would be paying the school fees direct.

Hang on if I have read your last poast correctly OP your sis is asking them to sell the flat to:

1. Pay off her mortgage, and

2. Pay for private school for her 3 children.

Have I got this right? So not only will she have no mortgage (and a massive amount of equity on her house) but also will not be paying school fees?

When I first read your OP I read that she would pay the school fees herself which would be affordable with no mortgage.

If this is the case she is double unreasonable.

If she wishes to live mortgage free and send her children to private school she needs to find a way to fund it herself - either increase her mortgage or move. To expect your parents to compromise themselves to this degree (and possibly you and your middle sis too as well as potentially cause a family rift) is beyond unreasonable

Another thing is that she is asking your parents to sell at a time when the housing market is terrible. While there is no guarantee it will improve it is a ridiculous time to sell unless you have no choice. This is possibly worth pointing out to your parents if they want an 'out' that doesn't involve telling their daughter to stop behaving like a selfish, entitled, grasping bitch

Thanks for your messages - I am going to make the point about IHT issues to my parents.

I should explain by way of background that my parents place a very high premium on education which is why they are considering this at all. That is why i want to make the point about there being other ways DSis1 could fund it. Also, my oldest sister's deposit was considerably less than ours in terms of ££££ and has previously said that she felt "hard done by" because it was less. But it went MUCH further because she bought in 1995 not 2005 & 2009.

This is the sister who shouted at me for giving her kids chinese for lunch when I looked after them for three days (while ill myself) when they were ill so she could go to work...

Sorry if OP wasn't clear... its quite complex:
DSis 1 has a mortgage of 40k and wants to send 3 kids to private school which will cost about 300k total.

After capital gains tax and EA fees my parents' rental flat would release about £360k which would fund this.

If she downsizes by moving to another part of London eg where Middle and I live she could live mortgage free, release about £200k, maybe more, and pay for the third child because they wouldn't have a mortgage at all.

Roughly - how much per year does a private school education cost for secondary? £15k? More?

Multiply by 3 children, and then by X number of years....

What sort of general figure would be required to fund?

OP your sister is practically a millionaire! Tell her if she wants some cash then she should re-mortgage her million pound home!

Fair enough if she was really struggling and help from her parents was really needed but this is ridiculous. It is how the rich stay rich, they never spend their own money

Ah ok - have seen the estimate now on total school fees.....

Are you saying she wants a £40k lump sum to pay the mortgage and for them to pay circa £30k per year to send them to private school?

Thereby spending roughly £150k on schools fees!? what about university?

Unbelievable....... I would tell your mum and dad your reasons why you think they shouldn't. Your sister and her husband should work out what they need to do to be able to afford their children to private school and if they can't they go state.

If your parents place a high value on education and want to pay for private school for your dsis's children that is their choice. I still think it is unreasonable of your dsis to ask your parents to do this and think it would be a bad call on their part because of all the reasons already discussed on this thread, but if they really want to do this for their grandchildren then that is their call.

But why on earth does she feel it is reasonable to ask them to pay off her mortgage AS WELL??!?!?! And what if you and middle sis want to send your children to private school too? Who pays for that then?

I think it is very valid to point out to your parents that your sis has more than enough equity in her house already to send her children to private school and to live mortgage free - she just needs to choose to sell herself and not ask your parents to!!!!!