Inheritance

[wonderstuff]

I’m not sure what to do. My father died suddenly about 18 months ago, my brother and I were listed as inheriting his estate 50/50. Significant part of the estate is a house, my brother and his son were living with my dad when he died, so made sense for him to have the house and me to have cash equivalent. Some pension funds have paid out to us both when that happened I warned my brother that he would need some of that money to buy me out of the house. I overestimated the amount so he wasn’t in difficultly later. He now has spent all that money and is surprised he can’t raise a mortgage on the house until it’s in his name which should happen after he’s transferred me what is owed to even the asset distribution. He’s called me for advice. I’ve bitten my tongue and not said I bloody told you you’d need to give me x money months ago. I really don’t want to fall out with him. I don’t really know who to talk to about it. My go to on money matters was always my dad, he’s frittered away thousands of pounds and I’m annoyed with him, but I don’t want to fall out over money.

My solicitor has advised that transferring the house before getting the money would effectively be gifting him my share. She will look into his options but at a cost naturally. I’m going to give him a day to see if he can come up with any ideas himself before instructing her. I guess that transferring the house into joint names to allow him to raise a mortgage then putting it into his name will be an option.

It’s only really 10% of the property because of other assets I think rent on that would be petty, but it is too much to risk losing.

Your brother needs to sell an asset to raise the money, as he’s spent the cash he had. Alternatively he works to pay it of

Do you have children? Don’t give their inheritance to your nephew

But no-one owns a house before they get a mortgage. Normally you apply for a mortgage in order to buy a house, and both the mortgage and the transfer of property take place at the same time.
Who is saying he can't raise a mortgage untill it's in his name?
I speak as a former property solicitor.

If a conveyancing solicitor handles this, then they will take the money from the mortgage lender and hold it. If your brother needs to pay you more than the mortgage amount, then he'll need to give the extra to the conveyancing solicitor.

Once the conveyancing solicitor is holding the amount you're expecting in return for signing the house over to your brother, then the conveyancing solicitor will complete the deeds transfer (including adding the mortgage company) and release your money to you.

To do it informally is madness. There are land registry things to do, fees to be paid. It is worth spending a small amount (relatively) on a proper conveyancing solicitor.

I doubt the mortgage company is really expecting the house to be in your brothers name before they lend him the money to enable him to buy it. The system can't work like that!

We are using a conveyancing solicitor to do the deeds transfer, land registry etc.

The mortgage adviser he spoke to said that he couldn't raise a mortgage against the house until deeds were in his name. I guess because he isn't buying it as such but borrowing against it's value? I'm not sure why he can't treat it like a sale but that is what he is saying to me. Maybe he needs to speak to a different mortgage adviser?

There must be another way to do this before transferring the property solely to his name before receiving your share. Unfortunately I have seen first hand what an inheritance can do to people and greed takes over. I’m glad you’ve got your own solicitor

I agree with Delphinium blue. It's no different from when you buy a house. You don't get it transferred to you until you hand over the cash. It all happens simultaneously on completion. I'm a probate and property lawyer. He needs a better mortgage advisor!

But the house is currently in the father's name - it's not a purchase, it's a transfer. He is not buying the house. He only has a 50% share of it.

OP, you are making slightly heavy weather of this tbh. Do not transfer your share of the property. It's up to him to come up with the money - end of. His problem, not yours. Honestly, give him a deadline or the property is sold.

Depends on how you want to structure it. But it's an assent subject to payment of half to buy out the OP. Solicitor for brother acts for mortgagee, undertakes searches and checks title. Solicitor for estate deduces title. Brother's sol orders funds and estate solicitor gives necessary undertaking for completion. Op signs paperwork. Mortgage funds arrive. Funds delivered to op's solicitor in exchange for signed documents giving title to brother. Much the same as a transfer of equity when a couple divorce and one has a new mortgage to buy out the other's share. It's perfectly possible and saves brother finding the money twice which it is unreasonable to expect him to do.

You really need to leave it to him, don't let him take advantage of you.

FFS don't instruct your solicitor to do work for your brother - you'll end up paying for that as well.

Like everyone else says, if you need the money now, give him a deadline to pay up or put the house on the market. NOT YOUR PROBLEM how he raises the funds. He had enough money; he squandered it. He can sell his flat or sell a kidney or however he wants to raise it. If he can't / won't raise it then the house must be sold.

If he starts dragging his heels on any of it then you should charge him rent. It may only be a small amount and it may seem petty but it will concentrate his mind.

Oh and remember you are the executor so you have the power to do this. Plus you ARE NOT BEING UNREASONABLE.

Stop being so soft about your nephew. If the house ends up having to be sold then that is NOT YOUR FAULT it is the child's own father who is doing that. He had the money to secure his child's future and he blew it.

He needs to speak to a different mortgage broker. It can be done as a remortgage to raise funds to do a transfer of equity.

It’s the same when one party buys the other out after separation.

Let me guess, your brother has always been financially irresponsible and your father has been bailing him out all his adult life. The reason your brother and nephew were living in the house with your father is because he cannot or will not live like most adults and support his own family. I have seen this before. My BIL is the same.

I will also guess that you have always been the responsible one, have earned a living and supported yourself like most adults do. Your father clearly recognised this as he appointed you executor in his will.

Your brother is taking advantage of you. Why is he coming to you now for financial advice? You advised him to hold onto the cash from the pension funds and he ignored you. As you said, he has frittered away thousands of pounds.

He could speak to a different mortgage advisor. He could sell the flat to raise the money. There are probably other things he could do. He is not doing any of them, just asking you to bail him out. Don't do it.

The main problem is that he is entirely financially irresponsible. That is his problem, don't make it yours.

Have you spoken with your Brother yet @wonderstuff?

How did it go?

I would take some proper legal advice. If the value of the estate falls over the IHT rate there will be tax to pay so the house may need to be sold anyway. The tax position on property ownership has become a lot more complicated, if he does buy you out that could raise a CGT liability as you are no longer inheriting but selling your share in the property.
As for how he raises the money to buy your share it could be that takes out a further loan on his rental property but that will depend on the equity in the property and may then become uneconomic for him to keep- he may be better selling it, although he will pay CGT as he is not living in it.
I appreciate you don't wish to fall out over money but I assume the money could make a significant difference to your life, you may be able to work less hours or invest for the future so you can retire earlier. My brother and I recently had quite a fallout over something not dissimilar and to be honest I think he was relying on me to "not kick up a fuss" , it sounds to me as though you wouldn't treat your brother as he is treating you. Honestly you sound like a really lovely person but please don't let your brother take advantage.

If you or your brother already own a property. Then both or one of you want to own your Dad's property, do you need to pay stamp duty, because you won't be first time buyers ?

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