How best to manage inheritance issue

[MissisBee]

My parents recently died, my sister and I inherit the estate (house and sum of money) equally split. My sister wants to stay in the house. The house is where we were both born and grew up.
Background to give context - sister has lived there with our parents most of her adult life. She contributed to household bills, but parents never really charged her rent, so as she could save for a deposit. I'm not sure how much she has saved. Last year, she and mum went on 3 holidays, they went out for dinner fairly frequently. It's a big house in a lovely area, worth around £400k. She has a dog, single, has no children.
I live with my husband and children. We have a house, and a mortgage with 10 years (£100k) left. House is probably worth £300k. Husband and I both work, our individual salaries are a bit more than my sister's, we have childcare bills. We never go out for dinner, 1 holiday a year.
The money from our parents works out at about £100k each.
More than happy for my sister to stay in the house, it's been her home most of her life but I don't want to keep my half, I don't see what advantage there is for me to do that. She says she can't afford to buy me out and pay the bills. She said "I don't want you to bankrupt me and I don't want to sell the house". I'm not putting her under any pressure, we've discussed options - she gets a mortgage to buy me out; she pays rent but I retain my share; she buys me out herself in installments; all of which seems feasible for her, but she may have to modify her lifestyle a bit. My husband feels the second two options aren't reasonable. But, the way I see it, if she can't afford to live there, we have no option but to sell. Am I wrong? Is there a way to manage this I've missed? I don't want to fall out with her over this, she's making me feel like I'm grabby. Am I being grabby?

You're not being grabby. She needs to consider ways of funding your share of your inheritance. She could rent out a room. Is there some garden/land that a neighbour might want to buy?

Surely she can afford to buy you out if she is working? She can give you her £100k cash inheritance and whatever money she was saving for a deposit and get a small mortgage for the rest. I agree there is no benefit to you holding on to your half of the house so she either needs to buy you out or sell up.

Hi
You say that your sister has been living in the house with your parents. During this time she’s not been paying rent so surely she has been saving for a mortgage.
You say the house is worth £300K - that would be £150K each. You also say that there is £100K money for each of you.
The way I see it is that sister would need to find £150K to buy your share of the house. She can give you her £100K. That leaves her to find £50K. She should surely have some savings and the rest she should be able to raise via a mortgage.
If you sister wants to remain in the house then I think that’s the only sensible way to arrange it.
Hope you can sort it out.

IANAL, but morally it's completely reasonable to expect her to buy you out if she wants to stay there. A mortgage of £100k for a £400k house is a good position for her to be in. She's the one who's grabby if she expects you to just give her £200k because she doesn't want to move.

Sorry, I’ve just seen that the house is worth £400K. So those calculations aren’t quite right. But maybe you can go along those lines. You could retain a quarter share in the house - then this could be paid to you if your sister does ever sell. Or it can remain until your sister dies then will come to you or your children. This would need setting up by a solicitor.

You’re being perfectly reasonable. Can she get a mortgage?

Yes, you are being completely reasonable and not at all grabby. She is, if anyone is.
She either uses her inheritance/savings/mortgage to buy you out completely, or she moves out and buys elsewhere that she can afford. This is how the world works in these sorts of situations.

If she gives you the cash, she only needs a mortgage for 100k to buy you out of your share. She could keep whatever savings she has. That’s 100k on a house with 75% equity. I don’t imagine this is going to be nearly as difficult as she thinks it is.

why not start with the two of you at least meeting with a mortgage broker to discuss options and get some hard facts

She should remortgage and give you your share of the house in cash or you should both should sell the property and split the proceeds in accordance with the will.

Not sure what she expects here. Dems the rules.

Thank you for the responses. I've looked at online mortgage calculators with what I know of her finances and she could reasonably expect to get a mortgage that, along with the inheritance money, would cover my half. Monthly payments look like they should be affordable. I don't think there are any credit score problems that would prevent her getting a mortgage. I have suggested going to see a mortgage person.

OP, sounds like a plan. Seeing an independent third party will take some of the emotion out of it. Hope she manages to see the light.

Appreciate you are both grieving as well. A lot to deal with.

I was going to suggest going to see a mortgage advisor with her. Unfortunately her easy ride life has come to an end and she’s going to have to fund her own way now. She’s in a very lucky position that she can give you her £100k and get a mortgage for the remaining £100k. If it stretches her financially she could rent a room out or something. But SHE is being grabby expecting you and your family to sacrifice your benefits from your inheritance so that she can sit there stress free in the house. Life isn’t like that. She’s already had thousands more than you in free accommodation over the years. It’s not your fault she didn’t save enough. Don’t be a push over here.

Is there still a mortgage to pay off on your parents house? If not and it's worth 400k, surely you're set to get more than 100k, like double that?

They should get £100k each in cash plus half of the £400k house each.

All that stuff about your finances is not relevant, though I suppose if you were comfortable you could just take the cash bit and have her live there and on her death the property reverts to you (or your kids if you predecease her). Otherwise the options are: sell and divide the proceeds or she buys you out. It's up to her how to figure out how to do this, but giving you the cash goes some way.
This is a legal issue (who are the executors?). Any kind of agreement that is along the lines you suggest needs to be put in a contract.

If neither of you are executrixes, then they should be carrying out your parents' wishes as per the wils.
Even if you and your sister are executrixes, you should still be carrying out your parent's' wishes. If that means the house is to be sold and the proceeds split , then either the house is sold, or your sister buys you out, and all other assets split.

The executor's duty is to the estate, not to the beneficiaries (even if the executor might be one or both of the beneficiaries). The executor's duty is to realise the assets for the best price (i.e. sell the house) and distribute the proceeds and assets in accordance with the will.

Which the OP's sister does not want to do re: the house. It is the OP's sister that who wants to change things legally that she has no right to.

Unfortunately your sister is too used to paying no rent or mortgage and having virtually her entire salary to spend on anything she wants for her entire life. She is so out of touch she thinks paying a modest mortgage is you trying to bankrupt her. I wonder if she has saved any deposit money at all or just assumed that she would have a free lifetime tenancy at your parents' house.

You each stand to inherit 300- if she gives you her 100, and mortgages the property for the other 200, then you get your share. Anything else- rent, etc inconveniences you, and you're not oblidges to keep her like your parents did. She has had it pretty easy up until now, and should have a hefty sum saved. If she doesn't that is her issue, not yours and I'd go ahead with selling if she can't/ won't do that.

The only fair way is for your sister to buy you out of the house. As has been said with her receiving £100k cash she should easily be able to get and cover a mortgage of approximately £200k.

However, do make sure you get several property valuations to ensure that you receive the full market rate for your share.

I'm glad most responses are in line with what I thought. I genuinely think her expectation was that she'd just carry on living there for nothing. An expectation that was set by our parents' generosity to her. With the total inheritance value, she could easily purchase a smaller house within walking distance of this one and not even need a mortgage. Plus, a smaller house would be cheaper to run than this one she'd be rattling around in on her own, so she wouldn't be at risk of bankruptcy. I do concede that her living there would save a lot of hassle of clearing and selling the house. But I don't want to be essentially subsidising her having a better lifestyle than me.
She thinks that because I already own a house, and there's two of us paying the mortgage, that she's entitled to this one and its unfair that she should get a mortgage on her own.

She will be thinking of it very emotionally. Your plan is sensible. Could you suggest both going to a solicitor together to discuss options? That 3rd party might be helpful.

It's a very emotional situation all round, and I think a neutral third party is what we need here.
Someone asked about executors - it's quite a complicated situation as mum and dad died very close together. My husband is executor of mum's will. Dad had my uncle as executor, but he died before him, so solicitor is applying for my sister and me to be joint executors.

She buys you out.

If she can't afford to this is not your issue and the property is sold.

Please get tax and legal advice about any scenario where she doesn't buy you out within a certain time scale or by instalments. You could end up stuffed on this front.

Who is executor?

You aren't being grabby

She is being unreasonable.

The estate is £600k (£400k of house and £200k cash) so you are each entitled to £300k of value. She wants a thing with a value of £400k. She cannot have that without an appropriate arrangement to acknowledge that £100k of that value is yours.

You should get 100% of the £200k cash available.

Your ownership of the house is 25% of its £400k value so if she keeps the house she should pay you 25% of a reasonable rent to live there. If she can't afford that then the house will have to be sold and she can buy a £300k property that she can afford.

Taking that which she isn't entitled to is a horrible thing to do and a decent person wouldn't dream of doing so to her own sister. If she's actually so nasty as to want to grab more than her fair share it's not in any way mean or unreasonable to resort to the law to uphold your rights. You can apply for a court order for the house to be sold if all else fails.

Alternatively is there some portion of the house that could be reasonably turned into a flat that could be rented out and the rent comes to you?