Step Mother and House Sale Proceeds

[NearlyAlwaysOnTime]

So, a slightly complicated situation but I'll try to keep in brief.

4 years ago my DF passed away suddenly. He had been married to my step mother for about 2 years when he died. A trust had already been set up which granted SM a life interest in the family home and, upon her death the property would pass to my older sister.

SM very quickly decided she wanted to sell the family home and move away. She put the property on the market without any real consultation and accepted the first offer made which was significantly below the probate valuation. At the time, I decided that as she was grieving (we all were), that I would let her carry on. She made it very difficult as she went ahead with all of this without solicitors or the trustees knowledge. Part of the reason we reluctantly agreed was that she wanted to move back to where she was originally from and I felt for her in that respect as she would otherwise have been quite isolated.

After selling the family home she purchased a new property using the funds of the sale. She assured us that this was the perfect place and she would be happy there. Shortly afterwards she decided it needed to be extended.

She didn't consult the trustees or give us any input but she did email us saying that she was spending her money on the extension to make it a lovely place to live and she would never want it back etc.

Fast forward a couple of years and she wants the money back. She says she needs some cash, presumably having spent around £100k she was also left by DF.

Since springing this on us she has proceeded to push and push and has now sold the 2nd house and purchased a third.

All of the above is incredibly frustrating but bearable. Now we come to the AIBU section. After selling the second house and buying the 3rd there is £65k left over. She was initially trying to get all of that, but we've pointed out that some of the increase in value would have been due to inflation. This has gone on and on and the money still hasn't been split.

AIBU to use the email she sent saying she didn't expect any of the money back and/or to push for my sister and I to get a decent amount of inflation.

Thus far she is suggesting 2% p/a which is far below the stats for the area.

I can't decide if I'm being overly emotional and stubborn or if we really need to take a stand.

You need a solicitor. My understanding is that a lifetime interest is in that property only. As soon as it was sold, DF’s share should have passed to his beneficiaries. SM should not have been able to take the proceeds and spend them. As it stands now, SM is effectively withdrawing capital from the property and spending it. You need to put a stop to it.

Cross post. I think you need better solicitors to advise you rather than ask your instruction.

You need independent legal advice. Go on the law society webpage (either Scotland or England and Wales) and find a local solicitor specialising in private client work -disputed trusts/probate.

This is messy and you are going to end up with no inheritance lest. The trustees are not there to provide you with legal advice. They are there to balance competing interests £hence why they are asking fir everyone’s views.

Check your hime insurance I case you have legal cover added on

She is taking the piss and you have been perfectly reasonable so far.

She is arguably entitled to the money spent on extension, ask for vouching for that.

That’s it.

Push for more advice from your solicitors - it’s what they’re for - they may just be asking for comments to gauge the emotions involved in the situation.

I would also seriously advise you get her to move out she isn’t respecting you and your sister and appears to be treating your inheritance as her own monies. Your dad’s intentions were she had his home if she wished, she has made her wishes clear.

You need to stop being nice.

She has taken advantage of grieving people (you and your sister). What sort of relationship are you expecting to have with a person who has cheated you out of inheritance?

Stop pretending your SM is a decent person and take every penny of that inheritance that is left. She gets none. If that means the council have to house her - tough titty!

She's taking the piss and it's time to put your foot down.

Thanks all.

It has been a really, really difficult few years and I've tried to remember that my dad married and loved her and part of it has been that I know how much he hated falling out and that he wanted her to have a house and to be okay financially.

But you are right - it is a case of too much now and we need to stand our ground.

I think I just needed some independent input on whether I was being unfair. I think I knew i wasn't but it is easy to get lost in a dispute when you're the one involved. Thanks all - I will put my foot down.

The solicitors are asking for your comments rather than advising because at the point the trustees allowed the sale and purchase you deviated from the trust arrangement, which then ended. As a pp said “She doesn't have a "lifetime interest" in the revenue created by the house, she just had the opportunity to live there until she died should she so wish.” and thus the next steps are not governed by the terms of the trust, but what you all agreed

Unless this was a discretional trust, which allows trustees to invest. In which case it is again, entirely discretional based on the choices of the trustees taking due consideration of the objective of the trust.

Sorry sent too soon...

It’s not a matter for the solicitors to advise on what they think you should do rather they are there to ensure that whatever you do is legally acceptable within the framework of the trust. Assuming there still is one.

I dont think shes entitled to any profits from the house sale. If you were renting and you did renovations then the owner sold the house and it was worth more than before, you wouldn't be entitle to the difference. Shes essentially renting the house for free. I'd push hard for she doesn't get any of the money.
How good is your relationship with her? Is it important to you?

The Trust was drafted to give her the ability to move. I think this was because she was not from the same area as my dad so they anticipated if he predeceased her then she may want to move away. So the Trust allows her to sell an buy (obviously the Trustees are actually the ones selling and buying). The second house and the current one are owned by the Trust. Not by her and not by us. So the capital in that sense is safe. It is just that she is buying a cheaper place and trying to keep the proceeds because of the works she did. Sorry if I wasn't that clear on that point earlier.

The relationship is okay ish. She is a really difficult character but my sister and I have tried really hard to maintain some sort of relationship with her. I used to be pretty close to her - but in more of a friendship way. She is "fun" but that is about it. Good for a glass of wine, but clearly does actually care about us at all. I think that is the most difficult part - we have been acting under the pretence that she gives a damn about us and clearly she doesn't.

How much money did she spend on the property when she did it up?

So they can’t distribute the sale proceeds without your say so?

In my personal opinion I would look to recover the initial sum (I.e) value of first property, plus your legal costs but not any uplift. I don’t see that you are morally entitled to the uplift - your SM could have sold the house and walked away previously and has no other way, by the sounds of things to invest. I imagine your dad would want her looked after.

How much she spent remains un clear. She said 40k and then later 60k. We've seen no invoices. She spends money like nothing I have ever seen so will undoubtedly be factoring in high end items she furnished the place with and took with her to the new place. She is aggressive when confronted and I hate it. I clearly need to be braver and start demanding things and saying "hell no" a lot more.

I would only be minded to consider the works if you had directed them and agreed to them. She shouldn’t have altered the property with the expectation of recovering that cost without first consulting you.

Thanks Triangle. It is good to see the other side. I have thought like that a lot throughout this. My sister and I are okay financially and SM should be very okay but spends like there is no tomorrow. I feel resentful that she spends money she got from my dad, who worked very very hard, in such a frivolous way. But he did love her and he wanted to make sure she was okay. I have tried so so hard, at my own expense to be fair. Too fair. But every single time she just wants a bit more. That's why I posted I think. I like that I am fair and I don't want to lose that. But I think the majority of you are right and it is just one (maybe 10) steps too far.

Triangle
Rather that this, shouldn’t op be trying to recoup the current sales value of the original property plus stamp duty, solicitors fees etc?

@Mummyoflittledragon

I did say legal costs.

And no - she shouldn't have done works without consulting us. There is an email from the solicitor (prior to the works) telling her she had to seek approval of the trustees if she spent any substantial sums. In response to that she emailed me and my sister saying that she was going to extend but it was so it would be a nice house for her and to "improve our investment" and ended by saying she would never want any of it back.

Well exactly. She’s spent your money and altered the trust property without actually asking first. It doesn’t sound like that was the intention of the trust.

Yes, I appreciate that and you were talking about uplift. It is likely the original property would equally have increased in value. Hence my comment.

You need a solicitor. My understanding is that a lifetime interest is in that property only. As soon as it was sold, DF’s share should have passed to his beneficiaries.

When I set up DH’s lifetime interest in my house I specifically asked this question- he does have the right to sell and use the capital for a smaller property or to relocate. Any “profit”, and the eventual house would revert to the children.

O/p for what it’s worth my dad’s wife did something similar in grief. She sold our family home within months of dad dying and has done nothing but move house every two years ever since. She’s lost all the capital and a lot of savings moving and “renovating”. I think it gives her focus and stops her thinking and grieving. Unfortunately no will meant no trustees or checks and balances, so we have no input.

I would think going by the house price index - use the calculator a PP provided would give a fair indication of how much the house price would have increased without the improvements.

Have you put the house details in there: www.nationwide.co.uk/about/house-price-index/house-price-calculator

If it was more than that & it’s due to the improvements (you could get a couple of independent valuations re this) then I would agree to the extra going to her as she paid for the works, but I certainly wouldn’t give more than that.

For eg a house in the SE at £200k would have seen a 9.21% increase (£18.4k) SW 10.66%, N is 4.21%. You could be doing yourself out of a lot of money!

@Mummyoflittledragon

Well OP is entitled to all the proceeds legally. That was just my two pence on a personal, rather than legal basis 😊