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Original poster

fair division of family assets

102 replies

YorkieBarn · 09/03/2022 20:35

Hello

I’m looking for some unbiased thoughts about what would be a fair division of a family business/ property.
My DH is one of 3 brothers who all worked in the family business as children/young adults.
One brother then took over running the business when their parents retired. It was always successful and is now even more so, there are
some stresses associated with the business but also lots of perks. DH and the other brother have worked hard in their jobs and no one is financially hard up, the brother running the business is now extremely well off.
In the past DH and brother have been partly bought out and there are now negotiations about about finalising the splitting of the business. At present DH and brother have both been paid out about 5% of the current value of the business.
Obviously everyone involved has their own views about this. Brother with the business says he works hard and deserves all/most of it. The others think this is unfair as they would have expected at least a 1/3rd share of the value of the business when parents retired with some adjustments for inflation etc.
Any thoughts...........?

OP posts:
Quartz2208 · 10/03/2022 14:21

How much is probably less though - because he still has money to come.

Knittedfairies · 10/03/2022 14:22

I'm wondering what your DH would think if he was the one who'd done all the work to make the business more successful than it was; would he be willing to divide everything equally?

Duchess379 · 10/03/2022 14:24

Your DH is making an assumption that he's 'owed' an inheritance. He isn't. If FIL decides to pass on his 15% to your DH & 2nd brother, he should be grateful. 3rd brother has done all the hard graft for 20yrs now the other 2 brothers want their 'slice' as inheritance. It's absurd! I'd tell DH he'll be lucky to get anything tbh.

VerveClique · 10/03/2022 14:25

You all need legal advice.

Your PILs should have sorted out a sensible shareholding arrangement at the point that they stepped back from the business.

Part of our family has this going on in it (not touching us). IMO there is far too much complacency / emotion from the initial business owners about what may happen in the future (and also a complete tightwad approach to getting the right advice at the right time).

titchy · 10/03/2022 14:28

and in due course would probably have inherited equally.

Probably is doing a lot of heavy lifting in that sentence.... he could have a stroke and spend the next 30 years in a high dependency care home and leave nothing to be inherited. He could be widowed and remarry a 20 year old gold digger who inherits the lot. He could choose to spend the proceeds on round the world cruises champagne and Aston Martin and get through the lot, leaving nothing to be inherited.

titchy · 10/03/2022 14:30

I wonder if the business was in trouble and BIL was hundreds of thousands in debt trying to keep it afloat whether the other brothers would continue to see it as THEIRS and be as keen to remortgage their houses for a third of the debt...?

Hoppinggreen · 10/03/2022 14:36

A friend of mine was in a similar position.
Oldest son given the family Business which he then turned into an even more successful business. The other 2 siblings (girls) given a few shares which pay some DIVIS but not much. My friend did try to work in the Business but couldn’t get along with her brother
So what she did was sell him her shares and use the money to start a Business of her own that’s also very successful rather than complain and try and grab more. Her Dad also goes on cruises and buys nice cars with the money from the share of the original Business he stated but nobody seems to begrudge him that
Your BIL might have inherited the majority of a successful Business but it seems like he has worked to make it even more so and now his brothers are being grabby

Stillfunny · 10/03/2022 14:45

If they were unhappy with the arrangements at the time FIL retired , then they should have said so . BIL basically took over a going business and has enhanced it. Had he lost income or the business , would your DH be ready to support his brother.? Your DH and his other brother sound greedy and begrudging .I bet their Dad is very disappointed in them.

Palavah · 10/03/2022 15:03

Your DH is being unreasonable. It was not his money tied up in the business, but his father's.

ChoiceMummy · 10/03/2022 16:01

[quote YorkieBarn]@Quartz2208
BIL was given the majority of the business and DH hasn’t had any share of the proceeds.
The amount DH received so far is probably less than a 1/3 share of its value at the time BIL took over.
FIL gets paid a dividend and has a very comfortable lifestyle including cruises[/quote]
Then this needed addressing at the time of the division of assets.

These issues always cause bad feeling. But only if you let them.

Quitelikeit · 10/03/2022 16:12

It seems like 20 years ago the two brothers were quite happy with taking what you describe as probably ‘less than a 1/3’ - it appears from your description that at the time all parties were happy and felt it was a fair situation.

Now that the business has grown enormously your husband seems to think he has a right to further financial benefits from this business- absolutely not IMO there is no moral grounds that I can find -

Can I ask what your husband did with his share of the money and what percentage of it he has left?

Quitelikeit · 10/03/2022 16:15

Also the parents offered the business to the three of them to share - that was very fair and generous - two didn’t want to - they took cash instead.

I think it’s very uncouth that you are even mentioning the fact your Pils still go on cruises etc!!!

Did you bring anything financial to this situation or just your generous self?

Original poster
YorkieBarn · 10/03/2022 17:31

Hello to the more recent posters of comments, all very interesting! From my point of view a lot of the current ill feeling relates to the fact that when BIL took over there wasn’t a discussion about how things were going to be divided up, several years later DH and brother were given some assets by PILs with a view to ‘it all being sorted out later’.
I posted this to get a variety of views, not looking for approval of DH’s position on this. He is actually very generous and did offer to remortgage our house should the business run into problems due to Covid, if he had taken on the business years ago then I think he would have been very willing to divide up the profits with the other brothers. He is also very stubborn and convinced that his point of view is correct.

OP posts:
spongedog · 10/03/2022 18:11

@arethereanyleftatall

Sorry, but I think your dh is being completely unreasonable here. I wouldn't be supporting him because his demands are outrageous. Yes, the bil has a multi million pounds business - because he's earned it!! With regards to being 'tied up' - your dh didn't want to take over the business when fil retired. That was his choice - presumably. So, the business would have been sold then. Your dh would only have got what it was worth then. If it's grown since then, that is thanks to, and only to, your bil.
^^ this.

I know a family where 2 out of the 3 siblings worked for the family business. The third sibling did have shares. The business really grew due to the efforts of one of the siblings and it is now a very successful £multi-million valued company. The sibling who chose, like your DH, to do other things has benefited imo far more than they really deserve. That is probably the cost of family peace. I think your DH sounds incredibly greedy - contributed very little long term and expects a lot. Just yuk.

EveryCloudIsGrey · 10/03/2022 18:12

At the time the parents retired who was running the company? If it was the brothers and your parents jointly running the buisness then you could argue that the brother was already entitled to either a 1/3 or 1/2 of the business. It would be the remaining portion that would then need to be split between the 3 brothers. ( Depending on the buisness structure and where the ‘worth’ of the buisness comes from).

I’m not sure I’ve explained that well.

Also your husband has talked about being compensated for ‘his’ money being tied up in the company but the other brother also had his career tied up in the buisness. Just as your husband lost the opportunity to invest ‘his’ money elsewhere the brother lost the opportunity to work or run a company for himself.

MrsSkylerWhite · 10/03/2022 18:13

So, BIL has made the business a great success, your husband and other brothers haven’t been involved, but they expect /13 shares?

How long has your BIL been in sole charge?

ancientgran · 10/03/2022 19:11

FIL gets paid a dividend and has a very comfortable lifestyle including cruises Good for him, hope he's enjoying it.

Harridan1981 · 10/03/2022 19:14

Presumably the brother has been paid for the work he did though, so bas been rewarded in that sense already, well by the sounds of it. The value of the business for inheritance purposes is different, and I would expect more equality.

inheritancetrack · 10/03/2022 19:24

The brother running the business should take more. The other two are CF for wanting so much when they haven't work and built up the business. Of course it depends on who owns the business, who has shares in it and so on

SteakExpectations · 10/03/2022 19:25

This reminds me of my family where one sibling put down the money required to buy the parent’s council house and then, because they had all paid board and therefore contributed towards the sibling being able to buy it so cheaply, expected a share of the sale proceeds when parents died.

Your FIL has a business which one of his sons has chosen to carry on upon his retirement. It is BIL’s effort that has allowed that business to become so successful and it is fair that he is allowed to keep the share that is rightfully his and the other shares owned by FIL are split however FIL sees fit, however that might be.

Fair IMO would be 100% to the son who runs the business and then the other assets split 50/50 between the other 2 brothers.

RedHelenB · 10/03/2022 20:55

[quote YorkieBarn]@Quartz2208
BIL was given the majority of the business and DH hasn’t had any share of the proceeds.
The amount DH received so far is probably less than a 1/3 share of its value at the time BIL took over.
FIL gets paid a dividend and has a very comfortable lifestyle including cruises[/quote]
And so he should, it was his business. Your dh hasn't had anything to do with it. He sounds very greedy the way you've presented it on here.

Harridan1981 · 10/03/2022 21:12

It was always a successful business though, and has provided a livelihood to that brother as well.

Original poster
YorkieBarn · 10/03/2022 22:06

So, at the risk of sounding as greedy as my dreadful husband, are those people who say BIL should get everything/ almost everything are you planning to leave the vast majority of your estate to your favourite child and much less to the others or give all of them much the same?

OP posts:
Quartz2208 · 10/03/2022 22:30

The problem is you are vague as to what exactly has happened for him to have the 85% in his name and what you have received
Do you get dividends for example?

And in answer it is up to the person leaving the assets as to however unfair that is

titchy · 10/03/2022 23:05

@YorkieBarn

So, at the risk of sounding as greedy as my dreadful husband, are those people who say BIL should get everything/ almost everything are you planning to leave the vast majority of your estate to your favourite child and much less to the others or give all of them much the same?
But as I understand it your FIL owns 15% and is planning as far as we know to leave equal proportions when he dies. Confused

Your dh is pissed off that he didn't have a share of the 85% - not seeming to recognise that this 85% is only worth an interesting sum because your BIL has worked for it - your dh hasn't.

Your dh and the other brother made their decision 20 years ago when they decided not to spend their lives working in the family business. And did something else instead.

It's hardly their brother's fault that his decisions were more lucrative than theirs.