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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

WWYD sister and "inheritance" from parents.

218 replies

IHeartKittensAndWine · 26/02/2011 15:50

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?

OP posts:
BranchingOut · 03/03/2011 14:23

Sorry, but you have been placed in a classic no-win situation here.

Politixmum is right that the fall-out could be huge if your sister gets wind of you saying anything against her plans.

Your best bet is to put yourself in the role of the neutral advisor - maybe present some pros and cons, but try to persuade your parents to ask advice from a financial advisor, solicitor or other professional.

NotActuallyAMum · 03/03/2011 14:49

I can't stop thinking about this, I have honestly never heard anything so selfish in my life!

OP how about you and Middle say "Do you know what Mum/Dad, we've been thinking about this and we both think we'd quite like our mortgages paid off too and our children to have a private education so how about you move into the flat, sell your house and give us all a third each of what you get for it?"

I'm not serious of course, I just can't believe how Eldest could be so selfish. How can she think this is OK? HOW?

I really think you and Middle should both give a totally honest opinion to your parents - that's why they've asked you, because they want you to tell them what you think. I can't help thinking that they really don't want to do this but are just looking for confirmation that it's not OK

BalloonSlayer · 03/03/2011 15:06

"2) you shouldn't do something for one of your children that you can't guarantee you will be able to do for your other children"

I don't 100% agree to that bit . . . my aunt and uncle gave one of my cousins some money a few years back, and apparently "adjusted their will accordingly." She was going through a tough time and her marriage had broken up. The other two siblings were had no financial problems at that time.

I don't know what the other siblings thought of this course of action. I don't know how much money was involved. And I don't know whether the cousin who benefited asked for the money or if it was offered.

However:

  • they didn't sell a property to give her the money
  • it was to help her get back on her feet after a difficult time, not for private schools
  • I think I would do the same for one of my DCs in that situation

I wouldn't do the same in the OP's parents' situation.

TrillianAstra · 03/03/2011 15:08

You're right BS, I'm thinking about gifts/luxuries rather than helping out in emergencies. If one of your chlidren needs a kidney, you'd give them one, even though if another child needed a kidney later down the line you'd then have no spare kidneys to give them.

MusieB · 03/03/2011 15:52

OP: If your parents feel that they can well afford to make a lifetime gift of the net proceeds of the flat now, and are comfortable that afterwards they will be left with sufficient to provide for their retirement on the basis of conservative assumptions (they will both live to a ripe old age, need expensive care etc etc) then from a financial planning perspective (with a view to reducing the eventual IHT liability) it might be sensible to proceed - but I would suggest on the basis that the gift was split equally between the 3 of you now. It does not sound to me as though they really have enough to make such a big gift without leaving themselves exposed.

I would like to put right some common misconceptions which have appeared on this thread.

Each person can give away up to the IHT threshold (currently £325,000) to a non-exempt beneficiary (exempt beneficiaries are spouses and charity) on death or in the 7 years before death, free of IHT. Gifts made to individuals more than 7 years before death escape IHT entirely.

What this means for your parents is that (assuming they have made no other significant gifts within the last few years) if they jointly give away £360,000 to your sister or to all 3 of you, there will be no IHT liability in respect of the gift even if they die within 7 years (because it will fall within their nil rate bands). But if one or both do die within 7 years, the gift will be taken into account in calculating the IHT on the second death, because the nil rate band will have been partially utilised. If however they both survive more than 7 years from the gift, it will fall out of account for IHT entirely and the overall eventual IHT bill will be lower.

The other point I would like to make is that no adult child can challenge the terms of their parent's will unless (broadly speaking) the child was being financially supported by the parent or the parent was not mentally capable at the time the will was made or the will was made under undue influence. Under English law (position is different in Scotland) a child does not have any right to inherit a share of the parent's estate.

MusieB · 03/03/2011 16:19

Oh dear, looks like I am a thread-killer.....

starterfor10 · 03/03/2011 17:13

Would you do this for one of your children?

warthog · 03/03/2011 19:12

can we have an update please?

NotActuallyAMum · 04/03/2011 16:15
exoticfruits · 04/03/2011 16:35

I have just come across this thread and agree with cory from way back-your parents should hang onto it-they may need it to fund their old age.

talkingnonsense · 04/03/2011 21:32

Any news?

AttillaTheMum · 04/03/2011 22:23

you should show your parents this thread!

SugarPasteFrog · 05/03/2011 14:19

This reply has been deleted

Message withdrawn at poster's request.

risingstar · 05/03/2011 17:18

to do anything but divide the amount available equally between your children at the point of your death is guaranteed to create ill feeling.

surely the point of inheritance is that it is what is left over when you have died. until you are actually dead, you cant know if you have money left over or not.

i personally dont think that grandchildren should come into the equation other than a token amount- what is left should be between the children.

it sounds like your parents are financially quite savvy- have kept the flat all this time, rather than flogging it and taking off around the world or buying a ferarri. presumably they didnt do this to provide the grandkids with a private eduaction. I think that your sisters means is irrelevant. for anybody to ask for this for school fees is barking. does sister move in circles where it is normal for grandparents to set up trust funds for this kind of thing? if so, might be worth pointing out that she does not come from that kind of family!

Original poster
IHeartKittensAndWine · 05/03/2011 17:31

Yes, some news. (BTW sorry I've not replied till now -
I've not had internet access at home since I last posted. Wasn't intentionally ignoring).

Middle and I gave my parents our thoughts, which were a fairly strong resounding no for all the points which have been raised here. My parents told us that they had actually already send no to my oldest sister - and that SHE had asked them to ask us. She appeared to think we'd support it because in the long run we could stand to "get more out of it"!

Oldest sister has tried to pull various lines on my parents "but why not enjoy the benefit now while you're still around" (they were quite Hmm that GCs education was a "benefit" for them to enjoy. Then tried to tell them that Middle and I almost certainly wouldn't have kids (this was very hurtful for both of us given past histories) so they might as well do the most they could for the GCs they do have.

We all went to lunch last Sunday. My parents told her that she should look at remortgaging and/or her and her DH getting better paid work. (She is a lawyer btw but currently works for a charity. She works in a fairly niche field that isn't to do with legal aid and could quite easily move into a solicitor's firm. Her husband currently freelances and similarly COULD move into better paid positions in his own field of expertise). At both of these suggestions she had a hissy fit "well don't I deserve professional fulfillment!" so they made the suggestion I put in my OP about her moving to a cheaper/more suburban area.

This bit was priceless (at least for those of you who know London areas) I don't want to give away to much so let's say my sister's house is in Kentish Town (it ISN'T, but that kinda place). Little bit edgy, quite meedja, quite trendy. And let's say that Middle and I live in East Finchley - its a nice area, but that bit further from central London and definately not as fashionable. So in reply to my mother, Oldest Sister says

"You can't expect us to move THERE! I'd feel like I was less of a person!"

OP posts:
RealityIsKnockedUp · 05/03/2011 17:47

This reply has been deleted

Message withdrawn at poster's request.

TrillianAstra · 05/03/2011 18:05

Yy, show your sister how absolutely INSANE everyone thinks she is for thinking this is an acceptable thing to ask

RunAwayWife · 05/03/2011 18:22

I think your parents need to tell her to grow up.

Trillian · 05/03/2011 18:23

I really hope your parents say no, it is a lot to ask and very unfair on everyone else

Original poster
IHeartKittensAndWine · 05/03/2011 18:26

oh, they have absolutely said no now!

OP posts:
MigratingCoconuts · 05/03/2011 18:33

Dear God! you sister sounds a delight!

Someone should let her know that the rest of us expect to make sacrifices in our lives or to have to wait for the things we really want and that she really is a selfish cow!

YellowDinosaur · 05/03/2011 18:36

Your sisters reaction to being told no should leave all of you in absolutely no doubt that it was the right thing to do (even if you doubted it before which you shouldn't have!!)

She is continuing to behave like a spoilt cow who expects everyone else to make sacrifices so she doesn't have to.

I am really really glad that your parents have said no.

cumfy · 05/03/2011 18:53

Hurrah :o

How can you tell when a lawyer is lying ?
Her lips are moving.

whomovedmychocolate · 05/03/2011 18:56

ROFL - I'm so proud of your parents. Good on them (and you and Middle - does that make you bottom btw? Wink)

RunAwayWife · 05/03/2011 18:59

OP I don't know your parents and they don't know me but they need to sell the flat and give me the money so I can buy shoes, lots and lots of shoes