It's an inheritance one

[mcdonaldsfortea]

A few years ago my sister and her DH relocated from up north to be closer to the rest of our family in the south west. Given property is so much more expensive down here they and their DC moved in with my dad - temporarily at the time but they're now there to stay. (It would seem. We haven't really had a conversation about it) They pay no rent, bills etc and both have full time jobs. Mortgage in the house up north which is rented out and the rent pays the mortgage and upkeep. Dad's house is big and he enjoys the company. He's getting on a bit - mid 80s, but is generally fit and well. His Will is split equally between his children - us and my brother.
We were up to visit today and she started talking about the future and what will happen when dad passed away. She just said "well obviously if it happens in the next 10 years (ie before youngest DC is 18) we'd just stay in the house and we can sell it and split it once they're grown up". I said I hadn't really thought about it like that and had assumed that if dad passed or if he needed the money in the house for care home etc they'd move out. She got very angry and said that would be making her and her family homeless.
For context, the house is probably worth around the £1mill mark. So I guess we'd have to pay inheritance tax when dad passed. It's an old house so not cheap to maintain - if they stayed who would even pay for that?
AIBU to think that even though they've lived there (it would be for about 5 years now) if dad needed the money or passed away she would need to move out?

Your dad could well live another 7-10 years if he is fit and well now so hopefully won’t be a problem .
He doesn’t sound unwell so best not to talk about it unless he indicates he’s updating his will .
Hopefully with her share of inheritance plus selling her house up north she can find a family home - most people move a couple of times as their children grow up so it’s not going to damage them

So they pay nothing for living there for 5 years - no rent, no bills, no upkeep on the property, no care - absolutely nothing?

YANBU to start the discussion of what happens if you father needs money for care in the future when they already have a home they could sell to fund another property. It should surely be the whole family's decision and not hers just because she's be lodging there for 5 years.

Thank you - he's not unwell - I think I was just shocked when it was brought up. I think you're right this is not a problem at the moment, it just shocked me!

Might be worth discussing properly as a family….

Take action now you might be able to avoid some IHT.

However if not, they’ll probably have to sell it to repay the 40% on 675k (assuming thresholds remain at 325k and house is worth £1m). So tax man will be due £270k.

Think your sis is a selfish bi*ch though.

I may sound unkind here , but if DF's will is split 50 / 50 , then if he sadly dies , then his estate goes 50 50 & DS and her family take their part and the proceeds from their other home and find somewhere to live. I think assuming the house is theirs whilst their DCs are younger is just rubbish. They have a house "up north" - they are not homeless Tricky situation , but I wouldn't be for this. Also as others have said - who knows what DF's needs may be . I would be making sure that the house ( or whatever left after care etc ) gets split 50 50 & that hs house can be sold for care home fees if necessary

Do you desperately need the money?

if the house has been willed to both of you then when he dies she will either have to buy you out, or presumably pay you rent on your half. Plus pay IHT, so it doesn’t sound affordable.

if your dad goes into care they may sell the house anyway. I believe it’s only a spouse that is allowed to stay on in a home. Has your sister considered that?

I suggest you all find an estate planner and get things sorted now.

Talk to you Dad about what he wants.

Presumably, if he needs a care home, either your dd will have to look after him or the house will be sold to pay for care.

It could be that your Dad is grateful to share his home with your ds and his grandchildren.

He might have changed his will already.

Don't let this drive you apart. Talk.

You can have up to £1 million and not pay IHT if it's made up from a family home being left to decendents and utilising any deceased spouse unused allowances.

Obviously he may have other assests, or no deceased spouse etc but just to correct pp that said £675k will be subject to IHT. It may well not be the case.

Once DF is no longer here you'll be joint owners so DS can't just decide to stay put. If DF goes in a care home I'm not sure of the rules but sometimes LAs wait until the house is sold upon death to be repaid.

He's made a Will sharing his estate equally between his children so your sister won't have a leg to stand on. She sounds very entitled, living rent and bill- free! But she's talking shit saying she can stay in the house. She can't.

@lionsleepstonight From memory when we were in that situation , care homes will give you 6 months grace to sell the house and then pay the bills . I agree this is a situation which needs to be talked about , unfortunately many people don't want to do it. Anyone got a pet ostrich ? 😊

If your Dad also has your Mum’s IHT allowance, then the combined threshold is £1m, as there is an extra allowance for leaving your primary residence to your direct descendants (children / grandchildren).

OP: your Dad has made his will, an equal share to the 3 of you.

I would leave it. Any of the scenarios mentioned by PP could transpire, you and your brother can deal with your sister as circumstances dictate.

If you start a row now your sister might pressurise your Dad to change the Will on her terms. She sounds a CF.

She wouldn’t be homeless: she would have her currently owned house and a third of the value of a £1m house. How ridiculous.

But no point in arguing about it now.

I would talk to your dad privately and say you really don't want to set a cat among pigeons but could he do some thinking and planning about funding for care etc... it will probably start the discussion

It could be sensible to have a discussion about care if he needs it. No discussion to be had about your sister staying in the house when he dies though. The estate will be split equally between all 3 children. Unless the sister wants to buy out her two siblings at market rate she'll have to piss off! @mcdonaldsfortea don't worry, because any attempt to block or delay probate and the distribution of the will could land your sister in serious financial shit.

She sounds money grabbing. Seek advice just incase as sounds like she planning !

Oh I will totally admit to being an ostrich!!!! But v grateful to all the advice. Wasn't aware of the £1mill rule, thought it was £650 (as yes, mum has passed away and her share went to dad) I think I need to have a proper convo about this with dad in the first instance. It's not about the money when he's gone... it's about him being able to have it while he's here, either for care or for a cruise (or a few cruises) or whatever, it's his!

You do have around a year though before things can even be questioned. The executor is allowed time for creditors to come forward or they could be liable for any debts coming to light later.

do you trust your sister o/p? Is there any chance she could get your dad to give her a life interest, or even sign the house over to her/allow her to buy it?

we’ve just found out dh’s brother had plans to transfer pil’s house into his own name. He’s also got away with at least £200k of fil’s money, but because he had power of attorney and was sole executor no one else has access to the his accounts so it can’t be proven.

speaking of- get power of attorney sorted now while your dad is still competent.

@mcdonaldsfortea are all 3 of you siblings executors?