The question of inheritance

[tiggerkid]

Hi all,

Not sure if this is really the right thread for this but can't think of any other to discuss the topic of inheritance.

Recently my sister-in-law and her husband announced that she is pregnant with her 3rd child and because they need a bigger house to accommodate, they will be moving into my MIL's house, who has a much larger property. Naturally, they understand that this move will raise the issue of inheritance, so they decided to sell their house and give us a small proportion of the value of their house on the grounds that they will still need money to look after MIL and renovate her house to their taste. The house is currently decorated to MIL's taste and, apart from the fact that it's cosmetically old fashioned, there is absolutely nothing wrong with it. MIL is certainly happy with it the way it is because she's been doing various work on and off in keeping with her own taste.

At present, MIL doesn't need any looking after. She is in excellent health and is of sound mind, so as far as we are concerned, they only want to move in to extend their living space so to speak. Because they live nearer MIL, they've had plenty of opportunity to talk her into this idea and convince her that it will be paradise on Earth once they all move in together.

While I completely understand and agree that the party looking after ageing parent absolutely needs a bigger share of any inheritance, am I being unreasonable believing that 1) it should be a discussion involving all parties affected by such a decision 2) any agreed value of our share of inheritance should be based on the value of MIL's property rather than the smaller house that my sister-in-law is seeking to move out of? and 3) the question of keeping large sums of money to redecorate the house to sister-in-law's taste should be out of the question because it has nothing to do with looking after ageing parents?

Sorry for the long message but I just find it so unfair that my sis-in-law just decided to move into a bigger house to improve her living conditions and keep 80% of the value of their own house to do whatever they want to do without ever discussing it with us or giving us any opportunity to speak about this. MIL has only mentioned it to us in passing and doesn't want to discuss this any further because she wants to avoid confrontation. The only thing she said was: well you, guys, are financially better off than they are anyway, which made me even more annoyed and upset. If there is a reason why we are financially better off, it is because my husband and I work our butts off while my sister-in-law sits on her backside playing on Facebook all day long. It feels like MIL believes that we need to be punished and penalised for our hard work while my sister-in-law needs to be rewarded for her Facebook efforts.

I know in the end it is MIL's decision and, unfortunately, one that appears to be driven by my sister-in-law exploiting MIL's fear of being left alone in her old age. Although I doubt that we can do much to change the situation, I am struggling to keep discussing this with my husband as I don't want to upset him but I do need some emotional support and understanding, hence this post. Thank you, all.

You all really, really need to get some specialist asset management advice. My DPs have recently done this...it is beyond complicated, but apart from anything else, will save them/me/DB a considerable amount in IHT in future. There are companies that specialise in doing exactly this sort of transaction - not solicitors, but an assest management company - as others have said disregarding the (un)fairness of it all, your DH could end up with a big IHT bill if this is not done correctly - for instance if your MIL requires care at some stage, or survives less than 7 more years. HMRC doesn't really care about what any of you wanted to do...it still all has to be done properly.

You should, if your MIL wants it done fairly, all have a percentage of the house. That way if they decide to sell down the road, you get the fair amount of what it's then worth.

LittleBearPad, SIL painted a pretty picture for MIL to say that she will strip everything out and make the house as good as new. So MIL now quite likes the idea of having the house as good as new and, obviously, because SIL is younger, she thought she'd let her decorate it in line with this day and age so to speak. Hence, they are keeping most of the proceeds from sale of their own house to make the MIL's house as good as new, i.e. just how they like it. There will be plenty of money for that and then some because they bought their house before the property boom was upon us and it's mortgage free because obviously their mortgage was really low then.

On a legal pov, your mil can not just distribute things as she wants. The give g thing is a donation, esp when you talk about an asset as big as a house, and that needs to be done under certain rules bin particular, a donation is subject to inheritance if the giver dies within 7 years.
Then if course she can do whatever she wants and give it all to your SIL.

I would be very very careful too about the consequence of that if she needs some care at home it in a care home. She will gave lost all her assets if she just hand the house over (I am not sure it's legal to do so anyway) but you need to think about what would them happen in 10 years if your mil needs a care home and she doesn't have any Money. Who will pay? Your SIL as she got the house? Or both of you as her two children?

I have seen issues like this in my family and there was do e very issues as to who would help paying the fees for the care home when 2 out if the 4 children had been given considerable help (and this was the reason why my gran didn't have any money left to pay...)

Maybe advise from a professional would be good tbh, mdinly gor your mil to sort the consequences for her of giving the house away.

From where I am now, with very old, ill parents living 90 mins away and my sis in spain I'd say bite their hands off !!

Stuff the money, it's worth every penny to know someone else will pick her up when she falls, take her to hospital appointments, do her shopping and cleaning etc , you won't be sat at home /work worrying, thinking " can I go on holiday" etc

Also another question is: if your SIL gets divorced and this is the family house, she might have to sell it but worst of sll, your mil will end up with no house at all!

She really hasn't thought things through at all.

theas a good friend if mine is caring hor her mum and as done so for years. Her mum joe lives with them. They both dsold their respective houses to buy something bigger and convenient for her mum.
However, they are all on the deeds if the house so that her mum is still protected financially if ever something was going to happen. It could be divorce, my friend could have an accident and die. And her mum
Would need to free the money for her own care/a house for herself again.

YANBU in being angry your SiL is being very unfair and (to use fave MN words) 'grabby' and 'entitled'.

Ultimately this is for your dh to discuss calmly with his Mum though.
He needs to start from the point that, ultimately, no-one should expect an inheritance as a right, and if his Mum chooses to give her estate to a charity of her choice, that's obviously up to her. However, if she wants to give it to her two children, then she needs to be aware that this is not an even split in any way. Again - that's her choice if she thinks it's OK to give a greater proportion to her dd than her ds, but point out that surely she can see this is unfair and is likely to cause resentment. She can still do it of course, but that he just wants to put it 'on the table' as it were (as she brought up the subject of inheritance and sharing things out now) that this is hugely biased towards her daughter.
I think he should suggest she speaks to someone who is objective and experienced in inheritance planning / retirement planning, who can take the emotion out of the equation and ask her to think about all the possible scenarios - she needs a care home / she lives until she's 103 either in that care home or never leaving the family home / she unfortunately gets hit by the proverbial bus the day after they move in / she finds it difficult to live with a new baby and small children now she's getting older / etc.,etc.etc. and not sign anything over until she's done so.
If she won't, at least your dh will have spoken up, and, at the end of the day, it's upt to her what she chooses to do with her estate, but at least you'll know where you stand, having raised it.

I completely sympathise with you OP. But jump 10, 20, 30 years and think: SIL is stuck at home changing MIL's nappies, and you've still got a life.

Strikes me SIL will earn every penny of what MIL is giving her. And some.

I completely see where you are coming from.

It seems that the fairest way to handle it would be for your SIL NOT to sell her own house, but to rent it out and keep that ticking over for the next 20 or 30 years or whatever you are talking about. Then the mortgage will be paid off and she'll have a great investment right there. Then when your MIL dies, she divides up her estate just as she would now (whether you get a portion of the house or not!).

Your SIL has an opportunity to create an investment property and she is being a Grade A idiot if she fritters it away on redecorating somebody else's house.

From what you say it sounds like your SIL is railroading your MIL into this with the idea of Happy Family's ! I bet the reality is something else.
I don't think either party has really thought this out.
Sounds like your SIL is going to take over the house, and your MIL could end up ' the lodger'
Do they realise you can't just 'give' someone a house!
There are all kinds of legal/ tax implications.
If your MIL needed to go into care the authorities could decide she was trying to 'hide' her assets and still require her to pay.
Is your SIL prepared to provide any care she may need.
Etc etc.
I would also make it crystal clear that you would no longer be paying for repairs etc.
Whilst it may seem distasteful to some, your MIL has brought this up.
Personally , I would take nothing , if your MIL would like to leave your DH something in her will when the time comes , that's her choice

It's ok to fe hurt.

But, I panic at the thought of living alone, my youngest has LD's, do that may never happen.

I would be happy to live with one of my DD's (and their family).

My DD, who I'm happy to have my Muns house, is the one who stays with her, when she's felt she's needed that.

OP, if your MIL had an honest conversation and said that she was lonely, would you let her move in with you?

It's very focused on property and not on the person.

My relatives, not from the UK, would consider this a usual arrangement and don't understand why our elderly struggle living alone.

When you have good family support, there isn't the need for Care Homes, until there is a medical need and then the LA has to fund it (most people don't know the law, do don't challenge the asking of fees).

There are a few legal points to iron out, such as what would happen if SIL divorces etc.

But there are many who would want this arrangement. I saw if often when I carried out Community Care Assessments.

The focus needs to shift from the SIL wanting to live in a bigger house and look at it more that MIL wants her family to live with her.

Single living doesn't suit everyone, in fact very few, hence the amount of depression in the ageing that live alone.

Also, has it been said outright that your MIL will be changing her will to leave the house solely to her daughter to the exclusion of your husband?

The MIL is trading of treating her DC fairly for a newly decorated, maintenance free home and the company of her daughter and grandchildren and possibly care (if the DIL is capable of it, obviously if she develops something like dementia she will need specialist care) when she is older.

When MIL told my DH about this so called plan, the first question he asked her was " are you sure this is a good idea? what happens if you don't get on with SIL after she moves in?".

All hell broke loose. MIL went completely mad and said to DH "what do you mean? Why wouldn't we get on? We get on very well".

After that, she pretty much didn't want to discuss the subject even though DH advised her to get the house valued and get some professionals involved. She still said SIL will decide it all and notify us when everything is done. MIL's fear of being left alone in her old age is being heavily exploited here but, money and personal hurt aside, I have say that, truthfully, nobody knows what will happen with her should the promised paradise on Earth in a newly decorated house fail to materialise.

If SIL kicks her out or makes living under the same roof unbearable, I guess it's entirely possible that MIL will end up knocking on our door. It is also possible that SIL can spend all money and refuse to look after MIL. At the moment, all she thinks about is how to get a bigger house. Later on, when the reality dawns, who knows?

OP, you say your SIL doesn't want lawyers but one will need to be involved to transfer the property to her surely? Make sure MIL has a separate solicitor to SIL for that and that solicitor should be able to advise her on implications of what she is doing. The points about Inheritance Tax and care home cost issues are relevant and it sounds like she hasn't thought it through. Your MIL may be leaving herself vulnerable in giving away her house - what security will she have to ensure she gets to stay there for example? If you cannot persuade her to get legal advice, please see a solicitor yourselves to understand the implications and be able to discuss them with MIL/SIL as necessary. Regardless of unfairness of any split (and I totally understand why you are hurt), I wouldn't want my Mum to do this without proper independent advice.

am I being unreasonable believing that
1) it should be a discussion involving all parties affected by such a decision
YABU, it has nothing to do with you

2) any agreed value of our share of inheritance should be based on the value of MIL's property rather than the smaller house that my sister-in-law is seeking to move out of?
YABU, there is no inheritance, she is not dead.

3) the question of keeping large sums of money to redecorate the house to sister-in-law's taste should be out of the question because it has nothing to do with looking after ageing parents?
YABU, they can spend the proceeds of the sale of their house, however they want to.

The focus of all of these questions is about how much money you will get.

However, I would recommend that she gets some legal advice, I think there is something on MSE, about the pitfalls of giving your house away. It could leave her in a very vulnerable position.

Is your SiL prepared to be MiL carer if the time should come?

And if, sadly, she should need to go into a home, can't the state still take money from the house?

I think they are trying a fast one.

You need to suggest that they have the house valued now, then sIL gives you half the value. You can in return give SIL half the money towards adapting the house for MIL's needs when MIL's needs change. She mightn't even need any adaptations.

your MIL needs to be careful about Deprivation of Assets.

you cannot just give everything way to avoid IHT. she may become too ill for your SIL and need professional help which she will be expected to pay for.

this is a bad plan for many reasons.

I've seen a similar situation, where the MIL and SIL sold their houses to buy a new, bigger house and the SIL agreed to provide care. Then the moment that caring got icky, the SIL put the MIL in a home and demanded to spilt the care home fees 50/50, despite still having the big house.

Another option is for MIL to sign over the house to you both now, so its shared equal ownership by children. SIL can then keep or sell her own old house but live with MIL. You can half finance new essentials like electrics, plumbing etc but not decorative stuff because that's just taste.

If MIL has taken the hump with your DH, could you try talking to her? Make sure it sounds like you are just concerned about her having the proper legal rights just in case of tax etc and maybe avoid the whole things about SIL's personality, chances of not getting on, etc, if that's a sore point.

I think you're right to worry where this will end - worst case scenario is that MIL signs everything over legally, then hasn't a leg to stand on if she needs money in later life. At which point, of course, you and DH would feel you couldn't just leave her in the lurch.

""If SIL kicks her out or makes living under the same roof unbearable, I guess it's entirely possible that MIL will end up knocking on our door.""

Is that likely?

None of my DDs would treat me like that, we wouldn't treat my Mother like that (who is coming to the end of her life).

I know that I could live happily with two of my DD's, not so much my eldest and her DP because they are smokers and non dog lovers.

I've seen the other side, though, when I was involved in Home Care planning and elderly people were being guilt tripped in staying in their ageing properties, alone, because there was to much fall out over the loss of inheritance, if the elderly person actually did what they wanted to, live with one child, or go into a Care Home.

The worse part was that the people forcing them into a miserable life of solitude, didn't need the inheritance and was supposed to love that person.

YABVU.

Something similar happened to me with my long term exP and instead of thinking "how unfair I won't get my hands on any inheritance" I thought "bloody hell, how generous of SIL to dramatically alter her life to care for her aging mother".