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.

She is frittering money away though isn't she as each time she moves she will be paying legal and survey costs and stamp duty. This is why she wants the cash as it is running through her fingers.

I'm not sure why you are so keen to placate her TBH. I think you have been more than accommodating and it seems clear she just wants the money and will throw a tantrum to get it. If she no longer lives near you do you need to have continuing contact with her?

I'd be wary of the argument that the works she did increased the value as that is not necessarily the case. Certainly most works do not.

I agree with Boom on the approach. Definitely make her responsible for stamp duty and other costs, they need to come out of her share.

Thanks for all your replies. I agree that I've possibly been too laid back but it has been a really hard time and especially with the first sale I was trying to process everything and it was very hard to muster any fight. Also, at that point I genuinely felt for her and thought that she would be better off relocating to somewhere she had a bit of a support network.

I'll respond in a reasoned but firm way and if she kicks off I will deal with the consequences.

Thanks again all - you've really helped.

Surely she was not allowed to sell the first house. Presumably you either consented or didn't oppose the sale. The only place this can now be sorted out is the courts. She sounds like a nightmare. In view of the very short time she was married to your father surely the courts would take that into consideration in your favour.

She had a lifetime interest to be housed but not in the house of her choice

I would never have let her sell the original house

she should not have been allowed to sell a property in which she only had a life interest.

Will the armchair lawyers please stop it. The point of a lifetime interest is that the survivor is not left without a roof over their head in order to pay the principal beneficiaries. 99% of the time (as is the case here) there is a further clause in the will to the lifetime interest saying that if the survivor wants to move, because the house is now too big, or they want to be nearer to other family or whatever, the first property can be sold, with the agreement of the trustees, and a more suitable property purchased with the proceeds of sale. However the lifetime interest transfers to the new property and remains part of the testator's estate, it doesn't become personally owned by the holder of the lifetime interest.

IF however she sold the second house and bought the third without the consent of the trustees, ie she just did it, then she is in breach of the lifetime interest and the solicitors for the trustees should be dealing with that.

The solicitors can only give advice on the legal position, It isn't their place to advise on the emotional aspects. That's why you appoint trustees, because you trust them to make decisions on your behalf based on what is right and fair (and if the trustees actually knew the testator, then to try to make the decisions they believe you would have made).

I think you need to go back to the solicitors and ask for legal clarification on what she's done so far. With that knowledge, and an understanding of house price inflation as above, you can decide on the way forward. You say your father loved her, and that's why he gave her the life interest, but he didn't leave it to her outright. He wanted you and your sister to benefit longer term, and to make sure that if she were to marry again her money didn't all go to her new partner and his family. In making your decision you don't have to abandon all empathy for her, but it's OK to be largely clinical about it too.

If what you stated earlier is the terms of the trust, don't give her anything, she's not entitled to it.

"The Trust provides her with a home for life and has a provision by which she is able to request that the trustees (2 solicitors) sell the house and purchase another. The difference between the sale price and purchase price should go into Trust for us."

The difference between the purchase and sale price is yours. There is no provision (in what you have said, the trust itself may be different) for her to receive any difference in price, even if she invests her own money.

I would table her email saying she didn't want her investment back, follow up with terms of trust say the gain goes into trust for you and your sister and then say no, she's getting none of the gain.

It seems you have little say over where she is moving to, so your investment is a tenuous in my opinion. You can't pick a good growth area as she may not want to live there. Is there any provision in the trust to limit the number of times she can move or how much you have to pay for her new house?

Start sticking to the written terms of the trust, not being soft and getting taken for a ride. Your step mother has her inheritance, you need to protect yours.

There is no provision on the number of times she can move. That is a worry as she gets fed up easily. We only have a say to the extent we will be asked for our opinion but ultimately the Trustees decide. I am hopeful that this will be the last time but in reality it may well not be. I agree that I need to protect my inheritance now and will take steps to do that! I agree that my dad wanted me and my sister to benefit in the long run and I think that bothers her a lot as she wanted the house outright.

Feedingthebirds - the Trustees agreed to the second purchase. The balance is now sitting in the solicitors account but we have some to this sticking point as she now wants pretty much all of the balance and is suggesting she is entitled to a 1/3 of the inflation value too. She clearly isn't so that should be straightforward, but it is the element of the works that is causing me most concern. I think I have the route forward now and will research area stats and put together my view. Thanks for you reply!

She is not entitled to any profit on the property. It is not her property and if she wants to spend her own money on someone else’s property, more fool her.

surely she is in the equivalent position as a renter? not her property, any works done her risk, except she's chosen to move not been kicked out.

I guess it is reasonable for you not to profit from her works buy by no means expected.

Op you need to start dealing with this less emotionally. You are either going to continue to have her take the piss and have to confront an even bigger more expensive complicated mess in a few years, and break the relationship... Or you nip this in the bud and harm the relationship now. The problem you're facing is when to tell her to get a grip.

Will it be before she fritters the lot and causes extra legal complexity... Or after?

Your dad would have written his will to give it all to her, had he wanted. I would be very very very upset to find out my DC had basically been taken advantage of despite clear estate instructions... You've all ignored his last will and testament! Shameful for family to do this, she's an awful awful person.

I agree, she's taken advantage of your good nature and she'll continue to do so. She doesn't care about your relationship or she wouldn't have done this.

Seems very wasteful, surely stamp duty, moving costs etc will have to be paid each time. I think, having moved already twice, the trustees would be perfectly able to say no to further moves. If the solicitors are the trustees, will they not also be charging for both individual transactions and management of the trust, which I assume comes out of the monies from the will, so by doing all of this she is costing more in management of trust, and depleting monies available?

Yes, who did pay the moving costs?

You have been too nice already and now shes taking advantage. I would say no to any more requests. Share out the money between yourself and siblings. Isn't that what your father would want?

She's really cheeky. She was married for two years and thinks she can rip you off like that?

SM is absolutely taking the piss. I don't think you should be worried about ruining the relationship with her, that's already gone. Push hard for as much as you can get of the 65k and don't let her move house again. If she can't provide proff of how much she spent on home improvements and you have the email saying she wouldn't want to be reimbursed then I think you should push for all of the 65k to be yours.

She said she was spending her money on the property and didn’t want it back

The trust is quite clear about ownership, returns etc, the house value is held for you/your sister

In effect the property seems as if rented, so any uplift in value goes into the trust.

he left her a good deal of money and he left you and your sister the house.

You say she’s spending money like water, she’s trying to get her hands on money set aside for you. Stick to the letter of the trust, no reimbursement of the works.

That’ll help her stop with the moving/speculation/chancing her arm in future, won’t it?

She’s only being civil because she wants the money- if your dad hadn’t left anyone anything, I reckon you’d have heard nothing from her at all.

She’s trying to take what your dad left, she needs to understand that she can’t and won’t.

If she had bought and sold and lost money on the sale, would she have given the trust the difference?

Would the trust refuse to allow her to sell in that circumstance?

You need to take a stand.

The trustees will take into account your position when making decisions but you have to make it clear to them. You need to be tougher from here on in, she doesn't have your interests at heart. Produce that email where she said she was happy to spend her own money and wouldn't want it back and remind the trustees that they were not consulted over this at the time so it should not be brought up now - the time to cut a deal was when she invested in. If you have to share, pursue a fair valuation of the equity/inflation by someone independent, the trustees can appoint and the costs can be met from the £65k.

I wonder if you can find a good solicitor to advise you well and advocate on your behalf, then say to your SM that it's not personal the solicitor is advising what's best for you and you are following advice?

I would also object strongly to the trustees if any further house sales and purchases are suggested or even acted on, her sale can't go through if the property isn't registered to her.

Take a stand. You must be regretting the day your father ever met her

You mention they were married for 2yrs before your DF passed. Is she actually a stepmother (been around a long time, raised you etc) or is she his last partner?
My dad has remarried twice and neither I would call a stepmother.
Was your relationship good/long-standing before all the bullshit?
As previous poster said a clean break sounds better and if she is a stepmother she should have your best interests at heart.
Not sure I’ve explained well!

I agree this relationship won't last the minute you stand up to her so you need to do it now before you lose more financially.

After my mother died I was very generous with a couple of people and they took the absolute piss. Not on the same scale but she had had a lodger/companion that I knew she would want to be looked after and in the end this woman ran rings round me.

She said in an email that she wouldn't want the money back. I would stand firm and hold her to it. I also would insist on no further house moves.

You are lucky that your dad was so clear in his will. The trustees need to honour his wishes that you and your sister benefit. One move is fair (ish) more than that, not.

I'm guessing she is quite young and fit. This needs to be nipped in the bud

Your father was clearly a good man . He wanted to keep a roof over her head but ultimately he was of the view that his children should benefit . As others have said it seems as though she is periodically moving to access living costs ie your inheritance from both of your parents .

She is being massively unfair don’t give her anymore.