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Original poster

Inheritance - My brother wants a property which is worth 110% of his 'share'...

127 replies

quandry · 10/06/2013 22:41

My Dad left everything divided equally between four of us:
Me
My Brother
Grandchild 1 (my child) (in trust until 21)
Grandchild 2 (my child) (in trust until 21)

For the sake of simplicity, let's say the estate is worth £400 K, so we are each entitled to £100K.
There are two properties, and my brother wants one of them, but is is worth £110K.

He has no money to 'buy out' the extra £10k.
He cannot get a mortgage, as has poor credit record and irregular income.
He has said he also 'needs' an extra £5 K to move/ renovate the house etc.

I am happy to 'help' him by 'lending' the extra £15K, but I'm not sure how to do this under the terms of the will/estate?

  • Am worried about how to ensure I get my money back?
  • I don't really want to part-own the property, as I am worried about being linked to him in any way on credit searches etc and being responsible if he defaults on any bills etc.

Should I just set it up as a loan, repayable when he sells the property, of gets more income? What rate of interest should I charge? Could I link it to the growth in value of the property?

I am really going round in circles trying to think this through.

OP posts:
TwasBrillig · 11/06/2013 05:00

You say your brothers possessions are there. Do you think by dividing up the way he has he thought your brother would have the house so that he had somewhere to live, but no money to waste?

It seems odd he'd expect it to be sold when being so generous to your side of the family.

JakeBullet · 11/06/2013 05:12

Well said Coola.

Oscalito · 11/06/2013 05:19

For the sake of simplicity I would just let him have the house. But I understand that you don't want him to have cash on top of that, I think giving him the house is more than generous. He may not see it that way though... good luck.

Madamecastafiore · 11/06/2013 05:20

I don't think you are being grabby bit I think your brother sounds entitled and feckless.

I'd either put a charge on the house with added interest. (Why not, he can't expect free finance?) or get the house sold and just give him his percentage of the proceeds.

If dad had wanted him to have a guaranteed roof over his head he would have just left him a house.

Oscalito · 11/06/2013 05:22

Also agree with others that losing 10K will be better than lawyers, stress, arguments, having to wait on him to pay you back. The price he pays for that 10K is that the matter is closed.

Chubfuddler · 11/06/2013 05:47

I may have misread the op but I don't think the op is actually interested in or asking for opinions about whether or not she should execute the terms of her fathers will as he wrote it (which she has a legal obligation to do if she accepts the task of executor). Presumably he had good reason for the bequests he has made.

Op lend him the 15k and register a charge as outlined above. It will cost a couple of hundred pounds and prevent any argument. If he doesn't want it done like that he can't have the house he wants. Simple as that.

Chubfuddler · 11/06/2013 05:52

YY to coola

Lavenderloves · 11/06/2013 06:11

I can see why your dad split his estate this way. ( your brothers demands say it all)
I can also see why your brother is agrieved. He should be angry with your dad though not you.

Let your brother have the house. The shortfall amount is written in a deed of trust that whatever happens you get your 10kback ( plus interest if you want it at a % of value increase)

As for the rest no sorry he has to be a grown up and sort himself out. He's taking your money otherwise. Putting the grand childrens money to oneside ( it's not yours) your dad would not have wanted you to give your money to him. This way you help him, the money is still yours and you have kept to your fathers wishes.

Fwiw i have a sil like your bro and she's fucking irritating. Always draining cash off pil. Always failing to be a grown up. They buy her a house she can't manage it. They loan her money she wastes it. Don't facilitate it he's a big boy.

BlueSkySoftSand · 11/06/2013 06:12

Absolutely agree with Coola

BeckAndCall · 11/06/2013 06:21

quandry - your figures are illustrative so I suspect the numbers could be much larger and so the differential more substantial.

But, my question is this, have you factored inheritance tax into this? By the time you've taken 40% off, the proportions will look much different and the idea of just giving your brother more than his share will be much more costly. If its the £400k we're talking about, this would only leave you and your children £50k each, not £100k. A very different situation from just gifting your brother £10k.

princesssmartypantss · 11/06/2013 06:57

Dh is a solicitor (not property, but general legal opinion) suggests that your db has house and put a charge on the property for 10/15k which is like you giving him a mortgage, that in itself is generous as your money won't increase in value but if you are able to do this it means he gets to keep the house but you don't totally lose out. My opinion is that your df said what he wanted to happen in his will and i always think its tricky when someone dies that the 'fallout' of their wishes always seems to create problems!

BranchingOut · 11/06/2013 07:05

Surely once the property is his, he can then raise a small mortgage to renovate etc?

Ladyflip · 11/06/2013 07:21

OP it sounds like you have had good legal advice. I'm a probate lawyer. Ignore those who say you are grabby, I know plenty of people who would be peeved at getting a quarter share of an estate even if their own children had inherited half.
I would jointly own property with brother, with a declaration of trust giving him 90% and you 10%. That way your capital sum will increase or decrease with property market and he will be unable to mortgage it etc without your consent. You may then have to make a contribution to capital outlay eg new roof etc but you do protect your share.

ExcuseTypos · 11/06/2013 07:29

Lady, the OP has said she doesn't want to be tied to anything to do with her brother. I agree with her, she needs some kind of clean break solipution, so she isn't liable for any future costs.

MoreBeta · 11/06/2013 07:43

The only truely fair way to resolve this is to put the property on the market and sell it along with all the other assets and then having cashed in all the assets you divide what is left over after fees and taxes between the four beneficiaries.

Your brother will get his fair share and no arguements. Taxes and fees need to be taken onto acocunt though. Who wil pay the inhertiance tax on your brothers share if it is a house? If he has no cash how could he pay the ineritance tax? He may have to sell it anyway?

ExcuseTypos · 11/06/2013 07:48

There isn't any inheritance tax More. Also the Op has said, he rbrother will make steeling the property very difficult.

ExcuseTypos · 11/06/2013 07:48

Selling

DoodleAlley · 11/06/2013 07:57

Sorry if this has already been suggested but you could ask
A lawyer about you and your brother owning the property in identifiable shares as tenants in common.

The only problem with this is that with ownership might come responsibilities and liabilities that you do not have the practical power or ability to control before they bite you.

SoupDragon · 11/06/2013 07:58

OP has not inherited 75%, she cannot touch the money left to her children, it is not hers.

This.

As it stands, she and her brother have each inherited £100k. Two other people have each inherited £100k which they will access when they turn 21.

I would probably go down the route of letting him have the house and having a charge on the property for the £10k. I would not include the £5k he "needs" to pay off debts and renovate.

ssd · 11/06/2013 08:23

I'd give him it

be the bigger person

CreatureRetorts · 11/06/2013 09:04

Quite honestly, the OP's father decided to set up the will this way.

Why should the OP do it any differently? Her father didn't leave the money to her family, he left it to individuals in his family in a way he saw fit.

Your brother sounds incredibly entitled. He knows where the bank is if he wants more. He's getting £100k FFS!

IsThisAGoodIdea · 11/06/2013 12:20

Fgs, give him the house and move on with your lives. It's not worth the drama.

In your position, I'd feel a bit embarrassed that myself and my children had bagged three-quarters of the inheritance. Not your doing, I know, but still.

As for the extra £5k, that's just trying it on. Don't give him that. He's got the house, he saves for anything he needs to do to it.

Angelodelighto · 11/06/2013 12:35

CoolaSchmoola Very well put.

I read this thread last night but had to step away as it was becoming very hard reading.

Please can people remember this is not AIBU.

The OP has posted a genuine question in money matters , if you have no legal/financial advice to give then don't post!

How horrendous that people feel the need to post such nasty comments when the OP's father has died & she is carrying out his wishes as he instructed in his will. Sad

Also I took it that the figures the OP was using were examples not actual figures- For the sake of simplicity, let's say the estate is worth £400 K, so we are each entitled to £100K. in which case OP may be looking at more than a £10k loss...

Why on earth do some posters think the OP should receive less than her DB? Confused

Xenia · 11/06/2013 13:11

It's rather unfair. The brother may go on to have 6 children and they will not get a penny.
However iti s what it is and registering a charge of £10k (do not give him £5k more) over the property for when he sells is one route. A cleaner route is that he borrows £10k over say 5 years and pays that loan to the poster. As hisl oan is a tiny & of equity he can probably get equity release even if he cannot get a traditional loan

AdoraBell · 11/06/2013 13:13

Angelodelughto

I don't think the OP should get less, what I was trying to say was what Coola came along and said properly.

I do, however, think that the OP might be better off not being tied into a property with a relative who sounds entitled and maybe disgruntled. That's why I would just let him house the house and move on. I watched my siblings squabble over my father's modest estate. Some if them were practically frothing at the mouth.

OP could save herself a lot of stress in the future by not being involved in the property, if the will allows for this.

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