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

[quandry]

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.

And yes, of course, late DF wrote his will the way he did for a reason, but I doubt that reason was for the OP the become her DB's fincanier and prop. He quite possibly thought he was making DB stand on his own two feet.

Sorry for your loss OP.

I agree with Adora - if it were me, I would 'give' the brother the house and walk away.

It's not really right, it's not what DF wanted, but I would then be free of the stress of being tied to my troublesome, financially irresponsible man-child of a brother.

Xenia, if this is the same family as the previous thread then it seems unlikely that the brother will ever have children and also the father had cogent and well-thought-out reasons for leaving his property the way he did. And it's quite possible that the same reasons apply even if it isn't the same family. Although if it isn't then there seems to be an epidemic of entitled wastrel brothers around.

The brother may go on to have 6 children and they will not get a penny

That is irrelevant as they will not have met their grandfather.

If you can afford to lose the 10% i would let him have the house, losing the 10% from your share (there is no issue doing this, it's your inheritance you can give it to who you want).

I have two totally feckless brothers and this is what i would do. You can then have a clean break having given him a roof over his head (what happens in future is not your problem).

Could you sell the second property? If it would raise enough to pay your brother his share, do so. Give him his share of the estate. Using this as security, he can then borrow the rest of the money he needs in order to buy and renovate the house he wants from the estate.

That way, you are not involved in supporting him financially. He sounds feckless and entitled, and I'd be reluctant to give him any more than his share of the estate.

Yes, monkeychops, I advocated the variation & taking a short hit, for the sake of a clean break. There's apparently bad feeling between brother and sister; the ongoing ties implicated in a share or charge on the property would no doubt protract an awkward situation.

OP's father presumably intended a roof over brother's head. The executors are allowed - some might say expected - to fulfil the will's intention as well as the letter. She has already ascertained that she can effect a variation of this nature.

OP posted that inheritance tax is not an issue.

Sorry to hear of your father.

Lending to family is very rarely a good idea.

For this reason, I would be fairly uncertain regarding the 10k but would consider it via a legal agreement through solicitors if it made your life easier (accepting to myself I'm unlikely to ever see it again) but absolutely no way would I consider the additional 5k on principle. I probably shouldn't say this but I think your brother is wanting to have his cake and eat it too.

I have no idea what to do legally, but I think people are being a bit unfair to the OP. A will is a legal document, yes she could 'gift' her brother that 10% but she would be going against her fathers wishes. If her children's share is going into a Trust until they are older it would have to come out of her 25% share so she would miss out. Her father chose to split the money that way and unless you know the entire back story I don't think people should be questioning that.

Thank you for all the very constructive and helpful posts, and to the greedy and grabby accusations.
It's not really relevant to go through all the history, but yes, it was me who posted previously under my usual name last year when Dad was beginning to get really frail and went into a care home. He died earlier this year.
I did all the organising & caring for my Dad for many years. I have no doubt that he constructed his will the way he did for very good reason - he as good as told me that my DB had had ' more than his fair share' over the years. I think if DF had wanted to specifically make sure my DB had the house he would have left it to him directly.

However I don't have a problem with letting my DB have the house, as I have no interest in it, and would prefer not have to go through the process of forcing my brother to sell it. It is all DB's stuff it is full of by the way. I would almost certainly end up having to get bailiffs in and change locks etc, and my DB and I would probably never speak again.

My question was really about how I could legally distribute the estate differently to the will, and I think various posters have answered that - thank you.
I also wanted to get a sense check on whether it seemed reasonable for my DB to be asking for me for more money. I feel rather blackmailed, as he is saying he 'can't move' unless he has £5k-£10k in the bank

He has credit card debts, and says he couldn't get a mortgage due to his credit record. (Is that true - if he owned a property, couldn't he get a mortgage against that?)

Personally I think he needs to apply himself more - he just faffs around, says he ' runs his own freelance business' but doesn't make any money and spends lots of time distracted by his hobbies.

I don't really see why I should lend him anything. He just seems to think that because I have the money that I can 'afford' to give it to him!
He will end up completely owning a house, but DH & I still have a mortgage!?

Thanks for 'talking this through' with me - really helps. I'm finding it hard to separate the executor 'hat' from the family member/ beneficiary hat...

It may well be true that he couldn't get a "normal" mortgage if he has a dodgy credit record - however, if he owns a property he should be able to get a modest loan, secured against that property. If he's all that feckless he would probably end up defaulting and losing the house though!

It certainly isn't reasonable for your DB to be asking you for more money. You are perfectly reasonable to decline that.

This is certainly showing me why it is often advised not to make the executor a beneficiary!

NB if you put a charge on the property as Previous Posters have suggested, this would not affect things like credit searches, responsibility for debts etc.

Nope, give him the property (you'll never get the money back anyway), and he can sell it and buy something smaller if he wants, so having the money to move that way.

Just to clarify by the way, my DB is not currently living in the house he wants - it was a second property my DF owned as a holiday home. My DF used to go there for 6-8 weeks a year. DB currently has a council house.

Could you suggest that he rents the property out for a while to get the cash together that he needs?
He'll have to get his act together and sort his stuff out first but at least he'll get the message that you are not going to fund his move.

Antshouse - I know that sounds like a really sensible solution, but it just would never happen. My DB is too emotionally attached to all his stuff and could never empty it to rent - wouldn't be able afford storage either.
It's also not furnished to a high enough standard to rent out.
In my previous post I meant to say my DB spends 6-8 weeks a year at the house ( not my DF).

I just think my brother should get a job of some sort if his own business isn't paying his way. He has a degree and is talented in his own particular field, but doesn't seem to get on with people in a work setting.
He is very self- centred and only really sees things from his point of view.

If the house were rented out before the estate had been settled, then any benefit of rent would belong to the estate, not to the brother who just happens to want that house.

I've moved without 5-10K in the bank, and I know a lot of people who have done the same. I do appreciate that removal costs and insurances etc can add up, but his belongings are already in the house so all he has to do is decide to move in. That's not your problema or responsiblity. I wouldn't lend or give and money.

It's not her 'family' that are inheriting 75% of the estate.

The money for the OP's DC's is held in trust until they are 21, so adults themselves, and will be 'families' in their own right.

The OP gets 25%. The Brother gets 25%. The other 50% isn't able to be counted as the OP's, as it will be received by two adults, not the OP herself.

My DGrandad has a will that is even more harsh than this - my Uncle will get the house he is living in (which is owned by my Grandad). My Mother will get 40% of his estate that is left, I have been told that I will get a 20% share, my Dbro 20%, and the remaining 20% will be split between my 4 DC's, put in trust until they are 25.

The reason my Uncle gets nothing but the (small) house he is currently living in? Because my DGrandad has spent the last 35 years paying out his share of the estate to him - so he will have HAD the equivalent amount if money, but whilst his dad is still alive.

My DGrandad doesn't think it right that he should benefit from twice the amount if money my Mother has, and he wishes to make some provision for me, my Dbro, and my DC's. (My Dbro does not want any DC's. Or a girlfriend. Or a boyfriend...)

Surely the wishes of the person who wrote the will should be the wishes taken into account?

In my view, the house should be sold, to allow the brother to get his £100k, fair and square according to the terms of the will.

Or he gets a loan to pay the extra £10k back to the estate, buying out the remainder or the OP's share.

It's not the OP who chose the terms of the will, why should she go against the wishes her dad had when he wrote the will?!

After reading that you still have a mortgage yourself i would take a harder
Line with him. Sell the house or he raises the cash.

He's just like my sil she expects everyone to pay for her because were so much richer than her. Moans that were so lucky...ignoring the hard work.

I think the mortgage or lack of is a bit of a red herring. Might be galling to OP but if 110% gets feckless sibling mortgage free and 90% doesn't get the sensible sibling (the OP) who is presumably paying her mortgage and had a deposit then her house must be worth more.

Since you quite reasonably don't want financial ties to your db you need to decide if you are happy to gift him the 10% or fight for it just because in principal it should be yours. The path of less hassle for you is certainly give it to him, but make it clear there is no more cash from you ever.

Have you sold the other house? If not I would wait until you have done that, as you may end up with more or less than you think. The numbers might then fall out to a small enough difference that you just don't care, or big enough that it is worth doing something.

I would then get the property your brother wants valued, but also get quotes for house clearance and shipping your brothers stuff to his permenant address (storage is not your problem). Might be a good time to change the locks. By the time you have included in estate agents fees, home owners energy certificate etc work out how much money you will actually get. If it doesn't seem worth the upset caused, simply split the estate so that initially you get 10% of his house, but immediately draw up some sort of document gifting him the 10%. No changes to will and you are not tied to him. It's then up to him what he does with the house. If he really can't afford to move there it will be his problem to empty the house and sell it.

If you do decide to sell, I would simply tell your brother that you will arrange for his possessions to be delivered on a certain date, and will deduct the cost from his share of the estate. Or you will dispose of his items and the estate overall will pay (since you will need to give vacant possession of the house) if you were feeling generous you could just make him pay the difference between disposal and delivery.

Hopefully he could be forced out of the council house (why should we subsidise his housing as tax payers now he has inherited a whole house of his own?

If you want him to keep the £10k difference and not make him seek a loan for that or sell to pay you that then that's up to you and you can easily do that but not from the children's share. Better to secure a charge over the property for £10k though instead with a written loan agreement for the sum or ask the brother to mortgage to release that amount although lenders I think would refuse him any loans if his record is poor. They can be quite fussy. The charge sounds the better option. you could offer to do all the work for that - say yes you can have the house but we just need this interest free loan and charge which will provide he must not mortgage the property or sel it without your consent/you getting your share.

I'm sorry for your loss OP, and sorry that on top of the stress of caring for your ill father, you now have to tread through the minefield of executing his will.

I just wanted to add that I'm pretty sure my DMum has a similar will which splits her estate evenly between me, DSis, and all grandchildren. She mentioned this to me years ago when I had no children and my DSis had 3, (so 20% each). It never occurred to me that this was in any way unfair, and I would certainly have never considered asking any of them for some of their share! But I guess everyone is different.

Your DB is being cheeky and you should execute the will as your father intended. That said, there is a legal way to change the will to give him the house if you wanted to do that (can't remember what it's called now). Meet with a solicitor and chat through your options.

Good luck OP. Tough times ahead I fear!

It is possible there is inheritance tax to pay as the estate is worth over £325 (unless there was also a spouse with an unused allowance so £325,000 x 2). If there is tax to pay your brothers share will be reduced.

Who has valued the property at £110,000? Is your valuation merely a free valuation letter from an estate agent or is it a formal valuation you have paid for, a "red book" valuation for inheritance tax purposes? There is likely to be a difference between the two. If your brother takes the property as his share of the estate You will save on solicitors fees, estate agents fees, council tax and house and garden clearance costs. It would be reasonable to give him a discount.

The very least you can do is obtain a red book valuation for the property and deduct likely estate agents costs say 2% ? from the valuation figure, he is doing you a favour in speeding up the process of liquidating assists from the estate.

Sorry about your father, OP. I think varying the will so that your db gets the house is very sensible and generous of you. FWIW, my brother and I are executors of our father's estate. The main asset is his house, which was in a terrible state. Emptying it was a time consuming and upsetting task, it's been burgled twice and is now on the market. Whilst I appreciate how fortunate I am to (eventually) have my share of the proceeds of sale, at the moment it's a bit of a nightmare. We're having to pay council tax, keep an eye on it (and I'm too scared, after the burglaries, to go there), deal with estate agents etc. We've twice had to clean up after burglars and paid to improve the security. If you can make your father's holiday house your brother's "problem" and not have to have deal with clearing it out and selling it, and also avoid having further financial dealings with your brother, you can get on with the administration of the estate in a much less stressful way.

I think legal advice from the ops solo tor is absolutely essential.
There are four beneficiaries in the estate and therefore it is highly likely that all four of them are joint owners of this property; so it is not up to just the op and her brother to decide on what to do with it; the children's trustees will have a say. In my experience, where trustees are involved their role is to protect the assets for their wards; they may want to sell.