Inheritance

[FlipFlops4Me]

My MIL has just died and DS and I are the executors of her estate. The estate goes 50:50 to DH and DS (our only child). There will be about £85k cash and the proceeds of sale of a nice semi-det bungalow with gardens, garage etc.

DS and DIL very much want to let the property. We don't. DH and I had always said that we would use our share of the estate to bring our own house fully up to spec (will cost a good £65k) and to have a nice cushion. We are retired, DH is housebound and I am his carer. DS says we can have some of his share of the cash to put towards house repairs so that they get done anyway.

However DH pointed out to me, quite rightly, that if we let the house then he will get share of rent but he doesn't have a great life expectancy so realistically he will not exactly get the benefit of the investment. I see his point of view totally.

DS says he doesn't want a lump sum sitting in the bank when he could have a share of an investment property. I feel he's being selfish but I see where he's coming from.

If it comes to it, can I force a sale. The will states the assets should be sold and funds distributed but reserves power to delay sale if the executors wish. One does wish, one doesn't!

Anyone got any advice? I don't want to fall out with my DS over money but DH and I had so counted on this money to make our old age more comfortable.

What does the Will say? If not instruction, yes you can force a sale

Let your DS buy your half of the house, he can use the cash and raise funding by way of a small buy to let mortgage .
You really don't want the hassle of a rental property maintenance issues and tax returns every year.

@dontcallmethatyoucunt and @alwayscheery Thanks - yes, I'd ask him to buy me out but he went self employed this year and doesn't have enough accounts to get any sort of a mortgage yet. I think he should see an IFA and invest his share for three years, then use it as a deposit on his own home. But naturally that's up to him.

All I know is my DH is 74, has had one severe stroke already and isn't that well - any rent he does get won't exactly benefit him for all that long. And you're right, I really don't want the hassle of tax returns!

I'm going to ask the solicitor if I can force a sale. Also I will tell DS that I will refuse to sign any tenancy agreement and the house can sit there empty if we don't sell it. There will be an almighty row which horrifies me, but this is for DH and I'll stand my ground for him.

What is the value of the property ?
It might be worth him seeing a mortgage advisor . Does he rent or is he a homeowner?

He rents with his long term girlfriend (who I always think of as my DIL).

The house is worth about £285000, or it was a couple of years ago on a Probate valuation when my FIL died. I suppose that's increased now.

He wants to own an investment properly but he only owns 50% of this one. And the other owners - you - don’t want to do that.

So he needs to sell up, invest and buy his own property.

I’m in a similar situation at the moment my DB and I had different ideas about what to do with our late parents’ house. It’s not pleasant but one doesn’t get to trump the other.

You should also engage your own solicitor and have him engage one too. Then the solicitors can deal with it and you have a sort of firewall between you, which helps to protect the relationship.

That’s what we’re doing in my situation.

If the house is sold, then surely after the taxes and costs are paid, it will leave both your DH and DS with at least c £140/150, 000 each? With that your DS can invest in a BTL property? Maybe not the ‘nice semi-detached bungalow’ but a property. The trouble seems to be DS wants a BTL he can’t afford to buy and thinks your DH should subsidise him in this desire?

We managed to get a mortgage on one years accounts when my H went self employed. It was a ballache and a niche product but we did it. It was based in his contract with the client.

The options are you sell and split the money. Or he buys you out in a BTL mortgage. Which as it's an investment he may well get as hell have 50% equity.

If they're letting it out surley that will greatly increase their ability to get a mortgage? Assuming they buy you out they'll have the full retal income but only 1/2 value mortgage. If you let all toghether it he'll only have 1/2 of the rental income.

Depending on what the properly value is and what mortgage he can get I don't think he'll be in avery differnet position either way. Buying from you will probably make him a bit worse off in the short run but better in the long the long as the value increses, and especially once it's paid off.

Also you may need to have difficult conversations if you keep 1/2 each and rent it out. For example what about when it needs a new boiler - might 1 of you want to go cheap and cheerful and the other want to go for something more likely to last?

You either sell the property and he can invest elsewhere or he buys you out at market value and he can do what he likes with the house

if your son gets his 50% of the cash and the property, he can buy his own buy to let property if he chooses and you get to spend your money on what you want. Either that or the house is properly valued and can and house value added together and you get all the cash plus ownership of percentage of the house and you get that proportion of the rent going forward which will also give you extra income

We're having a discussion the afternoon. Neither of us is shouty or bad tempered, so I'm hopeful I can put my DH's position clearly. I'll also listen to DS carefully.

I like the idea of each engaging our own solicitor but I'd hope that we can negotiate between us; it's how we always resolved difficulties in the past, even during his teenage years we negotiated things, gave and took, and worked things out.

We have major, mega repairs needed to our own home. I don't want an investment property. DH is 74 - he has no need of a long term investment - he's had one major stroke - we want money to make our lives comfortable and easy. Neither of us trusts rental income - especially in this day and age.

Bang on! And this I will point out to him. And yes, at the end of the day if the property is sold and added to the cash pot then it's a minimum £180k each after costs.

Exactly this. Your DS is being a bit unreasonable expecting you to subsidence him being able to own an investment property he can't actually afford.

Isn't it also a bit short sighted to be thinking about investment properties rather than somewhere for him to live himself rather than renting?

Please don't both get solicitors, they are not mediators they will just being looking after your individual interests and costing a lot of money.

I'm going to put the point about the expectation that we should subsidise him in a BTL he can't afford, and that's it's very selfish given that as older people what we need is available cash so that we can be comfortable.

If we sell, he'll have enough to buy a cheap flat that he can let if he wants. As you say he'd be better putting it by until he can't get a mortgage and then use it towards a home of his own.

I'd be very surprised if a semi-detatched bungalow with gardens was the sort of property that would give you the best return as a buy to let. Think about the maintenance too. Your DS should do some research on the likely return on the bungalow versus a compact property in a popular city and he might change his mind. But in the end half that bungalow belongs to your DH and your DS cannot tell you what to do with the capital.

I assume the £85k cash is split in 2 so £42.5k each?

You can keep the cash or at least £65k of it and own a smaller percentage of the house.

Your son and his partner will have a larger percentage of the property but less or no cash

If your DH is already 74 then he has waited an extremely long time for an inheritance from his parents and you should absolutely use it to make his life more comfortable, not to line your son's pockets.

@losingit31 - both my MIL and FIL were in their late 90's when they died. I do feel my DH has a right to feel as comfortable as possible in his old age. He is disabled and isn't going to get any better. We are pensioners and don't want long term investments.

I feel my DS is being selfish and just this once is going to have to consider someone else as well as himself.

It doesn't make sense financially for you and your DH to be going into a Investment property, based on your life expectancy.

I would point this out very clearly to your DS. To be honest I am sure he is aware of this already. Apologies to put it bluntly, but it does appear he is feathering his own nest long-term!

@bjrce - I couldn't agree more! I have type 1 diabetes and tonic clonic epilepsy; my DH had a fairly severe stroke and has cognitive and physical problems. I'm also a survivor of bowel and pancreatic cancer. Neither of us is a great bet for very old age! As my own long deceased DF put it "I don't even buy green bananas!"

I will point it out to DS in very blunt terms, together with my opinion that he is being more than a bit selfish.

OP, the issue that your son could face is that it's very very difficult to raise money for a BTL mortgage unless you own a principle property. You effectively can't get borrowing. Regardless of his accounts, he really needs to take the money and invest it in a property he lives in. If he looks at the yields on BTL, he'll see that the capital growth is where the difference lies and you can live in a property and get that!

I hope your DH is OK, that sort of money could really make the difference to the rest of his life.

@dontcallmethatyoucunt - my DS rents his home. And as you say, he can't get borrowing yet. All he can do is see an IFA and invest his share on the best terms he can get. He'll get this house when we die, and in the meantime it will have been done up beautifully with a fortune's worth of work. He'll just have to bide his time.