MIL 'giving away' house to BIL

[chas1]

DH’s parents have never been particularly well off, FIL is an alcoholic who hasn’t worked for 25 yrs and MIL has worked hard and only in latter years been promoted and done well. She pays all bills and was very savvy in buying their council house 14 yrs ago, small mortgage now paid off. I have always respected her as she has had to support a useless husband and my youngest BIL who still lives at home and has only this year found employment (he is 28 and had no mental or physical disability to prevent him finding work just laziness and low aspirations). They have never been able to help us financially with wedding, deposit etc. or practically with childcare for example and luckily for us my parents have helped out to some degree.
Anyway DH’s grandfather passed away last year and MIL inherited a significant sum which enabled her to buy another property outright which they will live in. We assumed she would sell the ex council house (which has increased in value significantly) and perhaps retire/relax generally enjoy a better life. However instead she has decided to sell it to BIL for a tenth of its value without discussing it with DH or his other brother. Am I being unreasonable to be shocked at this and think it is unfair favouritism?
We have always got on well with her, visited regularly taken her on holiday with us and generally had a good relationship as has other brother who has also made own way in life without any help from them. I know she is now in a position to give this wonderful gift to her son but it feels so unfair that we are still saddled with big mortgage and struggling to make ends meet while he will be sorted for life.

[ENormaSnob]

Yanbu

[MsDeedles]

Yanbu for feeling that it's unfair. It certainly would feel that way to me from the inside of the situation, where a person on an ostensibly equal basis (3 brothers) are treated differently for no articulated reason.

Y would bu if you said or did anything about it. It's your MiLs money and she can dispose of it as she likes. She vrry well may have her own rationale but frankly its irrelevant

[Iggi999]

Omni what is it about your story that demonstrates that this type of situation is "fair"?
I can see why it has been advantageous to you, but fair to your siblings?

[SunnyBaudelaire]

the youngest ones that stick around very often cop the inheritance...

[Quitelikely]

I think she might leave her current home to her other two sons. The only way to find out is to ask the question but it's an awkward one...........

People don't always get what they deserve. Just remember that. Shrug and move on.

[5Foot5]

My first thought was the same as several others here, she may well intend to leave her current house to her other two sons eventually.

In the meantime perhaps she is very much aware that her youngest needs to stand on his own two feet a bit more so this is a way of getting him to be a bit more independent.

[YonicSleighdriver]

It isn't comparable to a situation where an inheritance is unevenly split IMO - this is the BIL's home. If MIL had three sisters and shared a home with one but not the other two and did a similar thing, I doubt the sisters would feel the same outrage.

With respect to selling at an undervalue - as it's her primary home she shouldn't have CGT to pay on the sale anyway (which may have caused the issues in other cases). It could be a gift for IHT purposes if she died within seven years, but that seems unlikely from the sound of things. I don't know about the care home fees but, as she has another house I would assume she would sell that first and use the proceeds.

[SantasLittleMonkeyButler]

YANBU for feeling the way you do. I am sure that I would feel the same if any of my siblings had been given such a leg up the housing ladder & I had received nothing myself.

However, I do think there may be more to it. I agree that maybe the deal is that BIL gets the chance to buy the ex council house for a very low price - but then the remaining (presumably higher valued) property will be bequeathed to your DH & remaining BIL. If that were the scenario, it actually would be fair in the long run, wouldn't it?

In fact, if the 'helped' BIL is as feckless as you say, there is every chance he will end up taking a larger than necessary mortgage on 'his' house & getting in to trouble financially - whilst the other two DCs will be in line for a nice lump sum when they are older.

If MIL is as lovely as you say, I very much doubt that she will have intentionally screwed over two of her DCs.

[DelightfulFunky]

I don't think you're U for feeling this way but it's really nothing to do with you and as others have said PILs may the leave their current house to the other 2 sons.
My parents did a similar thing for our eldest (she was and has remained single and did become their carers in their final years) but it never raised any concern or issues for the rest of us as we were all married, settled and have our own homes.

[sherbetpips]

I dont think you can sell a house to someone for a tenth of its value can you? It would be counted as 'gifting' which is currently limited to something like 8k a year. Huge tax implications for both of them?

[titchy]

She can indeed sell it to him for whatever price she wants.

However the difference between the sale price and the market value will be:
a) regarded as a gift for IHT purposes if she dies within 7 years
b) be liable for stamp duty at the market value.
c) as it's a second property for her, be liable for capital gains tax.

So I'd be telling her, over Christmas dinner what a generous thoughtful gift it was and would she also be paying the full stamp duty and the CGT as well?

[YonicSleighdriver]

Titchy, I'm not sure the last is true as it's currently the MIL's primary residence.

[oswellkettleblack]

YANBU. My ILs left their home to lazy BIL their house. He did nothing. Eventually the council went after him as the house next got rodents and damp due to his never cleaning and evicted him, cleaned it up then put a lien on it. He lost the house. He wanted to come here to mooch. I told my husband he needed to leave and us get divorced before his useless, good for nothing, filthy, lazy brother set foot over the threshold. BIL now lives in a council bedsit. It's filthy.

[Apatite1]

People can give their assets to whomever they wish. My ILs will is very uneven (eg my SIL married a very rich man, and now won't inherit anything) but that's their prerogative.

Yes, it would have been nice to get some money, but you are unreasonable to expect it.

[frostydom2011]

If you mil has been enabling your BIL, maybe you could look on the bright side that at least when she's gone he won't come knocking on your door.

[JanetBookLover]

Children should be helped fairly. If one has been lazy or made bad choices they should not get more money from parents. Instead they should be berated, castigated and given exactly the same as richer siblings. It was their choice to be an idle so and so.

[Moniker1]

When your parents are gone who will take on responsibility for a feckless BIL?

Hopefully now he has a permanent roof over his head he can look after himself and you won't feel guilt if he fails.

If she shared the value of the house 3 ways you would probably still feel some responsibility towards him down the line, this decision changes that, so maybe it is a good thing from your point of view, in the long run.

[whitesandstorm]

Yanbu, totally unfair of your mil. She's basically rewarding laziness by giving this son a house. He's done nothing to deserve it whereas her other sons who try hard and struggle through life get ignored. Is your dh going to say anything to her?

[WineWineWine]

Unfair or not, it's her decision and there is bugger all you can do about it.

It's perfectly legal though there may be inheritance tax implications if she dies within 7 years.
If there is any stamp duty to pay, it will be sorted in the conveyancing.
If it's her main home, there is no capital gains tax to pay.

Life isn't fair but it's none of your business. She doesn't have to consult with her other children.

[ChazsBrilliantAttitude]

I would advise her to look into deprivation of assets as well as mentioned upthread. Selling for a nominal value might cause problems later if funded care is needed.

[GnomeDePlume]

She can do as she will with regard to what she gifts and to whom, however you are also free to rethink your relationship with her. IMO actions do speak louder than words.

The period when adult offspring could really do with help from their parents is often very short. The period when parents could really do with support from their adult offspring is often longer and open ended.

[APlaceInTheWinter]

I think your MIL has actually done what you would have expected ie prepare for her retirement and relax. For her, relaxing is knowing that her DCs are provided for and selling BIL the house will give her peace of mind.

It's hard not to equate financial gifts with love but really it makes no sense. There isn't a direct correlation between finances and love. And the sale of the house isn't so your BIL has a financial advantage. It's so he has a secure home.

[Destinycalls]

I suppose your DH will inherit some of her present house? So you hopefully won't be left out. By making the BIL buy the ex council house she is at least making sure he gets some kind of job and starts behaving responsibly. I suppose both sons will be homeowners with a mortgage so they are equal if by different routes.

I can understand your hurt though. Maybe she doesn't know you have a big mortgage?

[YonicSleighdriver]

According to 3.3 of this, deprivation unlikely to be a problem.

www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS40_deprivation_of_assets_in_the_means_test_for_care_home_provision_fcs.pdf?dtrk=true

[ChazsBrilliantAttitude]

Yonic
I wouldn't be so certain given that the FIL is an alcoholic that hasn't worked for 25 years. He may have multiple health problems for all we know. The foreseeability test may have been met.