AIBU to think there should not be equal split

[Thinker03]

Ok so DH dad passed away 2 years ago. He owned a flat which he purchased with my DH and his sister, DH never lived there but was quite young when he was put on the mortgage purely to help his dad out. The sister always has and still does live in the house. When the dad was alive he paid his mortgage ALONE. No help from the sister on the mortgage or one of the other now adult siblings who occupies a room rent free.

For background info there's 5 Adult siblings including my DH.

When his dad died as house was joint tenancy it passed straight to DH and his sister. Despite the fact that there is 5 Adult siblings all together because they all have their own lives and "are so broke" DH and his sister have been going half on the mortgage. The plan is to sell when market improves asap.

So as not to drip feed info. DH and I have 2 kids we want to have more but canr yet as we are too stretched for money and too stressed. We have struggled to pay our bills our mortgage plus half of mortgage on Dads old house which is now technically DH and his sister house. DH has never lived in house. Also for added info we won't be going on holiday this year as we can no longer afford it. DH has been doing overtime at work.

By the way the dad always spoke about wanting his kids to split the house if anything happened to him but no he didn't have a will and couldn't of really stipulated such anyway due to the way the house was set up a long time ago. (Joint tenancy)

Other than the sister DH is going halves on mortgage with there is also an adult brother living in the house unemployed and rent free. As he is "Just trying to get on feet"

There are also 2 other siblings who have kids of their own and like I said "So broke" and have never offered to help pay the mortgage in light of our situation.

Recently they have been talks of the house being sold and the fairest way to split the house. There's been mention of an equal spilt between them all. AIBU to suggest that an equal spilt is no longer applicable since only DH and his sister have been paying the mortgage?

I think its perfectly reasonable for however much he and his sister have contributed to be taken before anything is split. That being said you are not one of the siblings so need to keep out of the situation really.
Going further there is an argument that his sister and brother living at the property should have their share cut by however much they have saved by living rent free and legally of course he and his sister have no obligation to share any money with any of the other siblings.

Agree with PP.
Also, it is amazing what comes up when someone passes away.
Uncle passed away and left everything to me.
I have 3 siblings who had their hands out very quickly.
I did share equally but probate takes time.
You will never keep everyone happy and there may be some fallout from this

You state early on in your post that your FIL paid the mortgage alone until he died. You don't say how long this was for.

After this your DH and one sister took over the payments.

If your DH and his sister took over the payments after FIL been paying the mortgage for 15 years for example then you are still effectively disinheriting the other other siblings on the basis of a relative minor contribution to the equity.

On the other hand if your FIL took the mortgage out 2 years before his death then the 2 siblings paid for 2 years it's a different level of contribution, but it's still arguable that the other siblings should have a stake.

I presume you contributed to pay the mortgage on the basis you assumed you owned half the house with the sister?

I'm not a solicitor so can't advise on this point.

Frankly my first point of call would be a solicitor on this one because the legal obligations as opposed to moral ones may well be very different.

Equally you need to weigh the value of the inheritance against a family rift.

Do I think your DH and his sister are entitled to more of the equity - yes i do, but I wouldn't assume they are jointly entitled to all of it.

Was there no life cover in the mortgage

No insurance on mortgage no

@user139...I know i need to keep out of it but I feel involved knowing that money from our house hold income is going somewhere else. Plus i hardly spend time with DH as he is always working overtime to make ends meet. He is so stressed.

@Dereguir...you have made some brilliant points here FIL was paying mortgage ALONE for 17 years.

Legally house belongs to DH and his sister but morally it would be bad for them to leave out other siblings. It's just difficult to know what to do in this moral obligation where every one imo has been so inconsiderate and unhelpful. Only interested in their inheritance no doubt!

If the house had 3 people on the deeds, that house was owned by those 3 and when the df died it was then owned by DH and his sister. No one else is entitled to anything. If it's going to be sold, maybe a one third share (df's share) could be divided between all the siblings, as a matter of goodwill?

strictly speaking of the deeds are in their names only, the property belongs to them, has always belonged to them and your fil has been paying "rent" in the form of mortgage payment amounts to the bs for 17 years. if he had defaulted on rent payments, your dh and his sister would have been responsible. This is the risk they took on 17 years ago.
This arrangement has fuck all to do with anyone else in the family bar them. Your fil did not have this arrangement with the others.
Your fil did not own his house therefore it is not his asset to divide.
Check with a solicitor though before speaking to the family.

These two would be well within their rights to handle this between them and divide the profit after fees and costs by two. The sale of his furniture, content of his bank accounts/savings etc and any other owned goods and chattels get divided into five.

They are kicking off because they a)will have to find somewhere to rent and/or b) do not understand the house belongs to their B and S and not their df.

Once settled, it does not sound unreasonable if your dh goes lc/nd with his siblings.

I think the fairest way to do it is to work out how much your DP and SIL have paid in mortgage payments and give that amount back and split the rest equally between the 5 siblings.

So the mortgage has been paid for 19 years in total - 17 years by the father, and 2 years split 50:50 by two of the 5 siblings?

I'd split the value of the house by 19. 1 part each goes to the two siblings who paid. The other 17 parts gets split 5 ways, so in the end, three siblings get 3.4 parts each, and the two contributing siblings get 4.4 parts each.

I don't suppose it's quite that simple, unless the same amount of mortgage has been paid every single year, but it would be my starting point. You could adjust it according to actual payments in total, and you might adjust the resident sibling''s share, or adjust the three siblings' parts downwards, but I'd start with the two who contributed taking a share to cover that, and then splitting the remainder 5 ways between all siblings.

Apologies, re-read the op.
Ignore "rent" comment, rest applies. This is their flat to sell and profit from now. As other poster said, they could goodwill the third (after deducting rent from waster brother ;-) if they felt inclined but fil cannot divide something that was not fully his to start with. If he wanted this to be sorted in a particular way, he should have left a will with it detailed.

Personally, I would say the percentage paid in by fil into mortgage should be spilt evenly between the kids because that's what he would of wanted. DH and DHs sis get back the percentage they have put in in addition. I agree legally they can keep it, but that wouldn't be 'right' to me.

It's complex OP.

If you are certain your DH and his sister own the house (all sorts of complexity when people die without a will) then even then determining relative shares if they wished to do so is tricky.

For example, what was the value and equity in the house at the point FIL died vs what it is now?

Even if he had paid the mortgage alone for 17 years, the equity at that point might have been 20k for example.

However in the subsequent 2 years perhaps due to changes in the local market that's now £80k. But that's at a cost to your DH and sister of eg £1k per month in mortgage payments - so 24k. That investment has ensured an extra £56k equity.....should the siblings who didn't pay the mortgage benefit from this? I'd argue probably not.

That was a risk though and the property's value could (or even may have) decreased.
If it has decreased or the mortgage payments have not resulted in additional equity then that needs further consideration.

Your DH could have invested the money else where and got a better return on it.

There's also a sibling whose been living rent free.....

Frankly I think it's going to be very difficult to find a fair solution here - well one everyone will think is fair...

You need to start with how much money you are talking about.

If you start dividing a relatively small estate it's a process of diminishing returns.

Personally I'd broadly suggest given 5 siblings that a spilt as follows would be fair - your DH and his sister inherit 70% between them and the other siblings 10% each - but there's a huge potential variation in there depending on points raised above.

Okay, so … deduct the amounts your DH and SIL have contributed towards the mortgage since FIL passed away 2 years ago, which I think everybody would agree was perfectly fair, and then split the remaining proceeds evenly between the five siblings - as your FIL requested.

Regardless of what you think or feel about DH's other siblings or their financial/family circumstances, your FIL expressed a clear desire for his estate to be divided equally between all five of his children. I think you would have to be morally bloody bankrupt to ignore his wishes. It was what he wanted. By all means have DH and SIL reimburse themselves for their contributions these last 2 years, but anything over and above that should be split down evenly, OP, regardless of whose name is on the mortgage.

A simple repayment for the mortgage payments isn't fair either though.

That money could have been invested elsewhere (or could have been used so the OP's family didn't incur financial hardship during the 2 years they were paying it).

There has to be some consideration for this point.

This is a classic situation in explaining that equal and fair are not always the same.

Presuming the property is in the UK changes in value over the last 2 years will be relatively small and not worth arguing about. Considering his DF paid the mortgage for nearly ten times as long as he and his sister have been the starting point has to be an equal split except for the mortgage payments being reimbursed on top. The only question on top of that is whether his sister and other sibling who have been living in the property should have their shares reduced to account for the 2 years of free housing since the fathers death.
It is absolutely crazy to suggest that the other 3 siblings should accept half of their fair share for a relatively short term contribution to the mortgage and luck as to which siblings DF asked to be on the deeds.

@DeRiguer
It is absolutely laughable to try and claim that the money could be invested elsewhere at a significant rate of return, especially not without taking much larger risks.

It's not what they are crazy to accept, it's also about what they are entitled to - which legally is nothing.

Morally they also made no move to help pay the mortgage for 2 years (one not even paying rent), so I dubious about claiming who has the moral high ground here.

Also bear in mind the OP said the plan is to sell when the market improves so who knows how long this situation will continue.

It could be 5 years more of payments...

Tbh OP the start point has to be an agreement with your DH and his sister.

This sounds like an open ended situation that's already fraught with issues.

The non rent paying sibling needs to be addressed. They start paying rent or it's deducted from their share of the property.

They should get back the money they have paid since first, and then properly split 5 ways in my opinion. That would be the fairest split. Who FIL chose to have there rent free is his business. Your DH and his sister have continued to allow that, so don't blame the brother for continuing to take advantage

Depends how you value return?

Having a family holiday? Not having to do overtime and spend time with your family? Not struggling to pay the bills and being stressed? (All from the OP).

Put it in an ISA or Marcus account that might (albeit with relatively low interest rates) be better than a property in an area where housing values are declining or static (not sure if this is true, but it's inferred from the OPs statement that they will sell when the market is better).

So no, not laughable at all if it was your family making those payments and making sacrifices to do so I'd think....

It depends how hard-headed you and your DH want to be. Stick with the rights of ownership and claim your half of the house. Or give a nod to FiL's intentions by sharing his third between the 3 siblings who are not owner. Or go the whole hog and split the whole thing 5 ways.
I guess if the other owner-sibling has strong views, that may sway your DH too.

Either way somebody is going to feel shortchanged. Mostly it depends on who it is you are prepared to fall out with.

Also - If only people would just write down "what they would have wanted", ideally in a will, instead of talking about it and then leaving their relations to try and make sense of it all after their death. FiL clearly had enough financial planning nous to set up some complicated purchase arrangement on the house (why? was he trying to pull the wool over his mortgage lenders eyes or something?) but not enough to sort out life cover to pay the mortgage in the event of his death or a will.
Sorry unhelpful - but he has left you all in a tough situation.

He owned a flat which he purchased with my DH and his sister, DH .... was put on the mortgage purely to help his dad out....When the dad was alive he paid his mortgage ALONE.

Do you mean that the three of them paid the deposit on the house so that they could get a mortgage? Otherwise, why was your DH needed on the mortgage to help his dad, if dad could afford the mortgage alone? Or was it done so that DH's income could be added to his dad's to fully satisfy the lender that the mortgage income multiple was affordable?

Unfortunately, there are loads of variables here - and a lot of very sage thinking and advice from PPs - but if your DH (and maybe his DSis?) put a significant lump sum into the house purchase initially, which could have been invested elsewhere, the value of the lump sum plus at least a fair rate of bank-deposit interest should surely be deducted before calculating what the gains are to be divided.

Also, sorry if it's obvious (or already been planned for/sorted), but don't forget to allow for any capital gains tax payable on the sale, which should obviously be fully confirmed and discounted from any joint gains calculations before handing out whatever are decided to be fair shares.

Derigeur rises several good points

I’d also suggest you reconsider this
The plan is to sell when market improves asap.
My plan would be to sell ASAP.

The market isn’t improving anytime soon. Potentially you could be making these payments for another 4-5years before you sell. How will those payments impact quality of life for your family?

In the interim I’d suggest that ideally you let the whole property so the rental covers the mortgage, failing that a halfway house could be sponger sibling the other sibling moves out so at least one of the rooms in the house can be let to lodgers.

The reason I say this is because realistically this is messy enough, so I’d pick my battles and let go of the fact sister got the benefit of living rent free for yonks. (Again though if FIL was making payments for 17 years and SIL is 25 it’s different to if SIL is 40...)

The only not reason I might use this is to say “SIL you had the benefit of free living, you enjoyed that benefit but now we need to rent this out or you cover the whole mortgage and you can remove that contribution from pot when we sell”

And original contribution (ie the mortgage payments) plus interest should come out before anything is split.

They should get back the money they have paid since first, and then properly split 5 ways in my opinion. That would be the fairest split.

Exactly. The two siblings who paid the mortgage could also have a little extra to cover lost interest and costs. I hope they are keeping proper records.

The FIL wanted the house to be split between all his kids. The sister and the OPs husband would be wrong to try and keep all of it.

I'd try and sell the house ASAP.

I honestly think the easiest and fairest way would be to sell the house, work out how much total mortgage repayments your DH and his DS has made, give them back their money first from the sale money then anything left gets split equally between all the Children (obviously including DH and DS)