How to split this fairly (inheritance)!

[chickencuddles]

My mum died, unexpectedly, earlier in the year. She left no will. Estate will be divided between myself and brother. There is a house and some cash assets. Brother currently lives in the house, is unemployed, mid-thirties. He has no intention of selling in the near future. There is no mortgage on the house, and it is a large detached family home.

My question is, what happens now? Do we split the cash between us now, and then one day when/if he decides to sell the house, split that between us? Or do I take all the cash now, and then balance this out with the house at a later date when/if it gets sold, as he currently benefits from living rent/mortgage free in a large house?

Other issue is that he hasn’t been looking after the house over the last 6 months (my mum was in hospital for this time), so it is already falling into disrepair, effectively devaluing my share of the property. If the property is sold now, he has enough money to buy a property more suitable to his needs and own it outright. Technically I don’t ‘need’ the money as I had never factored inheritance into my financial plans, assuming it would be eaten up by care-home fees. I can’t work out what the right/fair thing to do is, as I’m obviously heavily involved in it, so I need a fresh perspective.

If the house was worth very little and he wouldn’t be able to afford a new property with his share of the estate, I would feel inclined to just say nothing as it would be unfair to suggest selling when he wouldn’t be able to afford a place of his own, but the fact is that his share would be enough for him to start afresh in a new property.

As is often the case, we get on OK but not brilliantly; there have been issues in the past between us, and I don’t want to be the ‘horrible’ sibling in this situation. We haven’t spoken about any options because he gets very defensive and aggressive when sensitive topics are brought up (he has some ongoing mental health issues), so I think I need to come up with a couple of scenarios of how to split this estate fairly before I address this with him.

I just wondered if anyone had been through something similar and had any advice for me?

I’ve been through similar in that my brother and I inherited a family property, and I lived in it due to caring responsibilities. I used my share of the cash and got a mortgage and bought him out. There was no question of me living in the house rent free. I’d keep it all above board and speak to a solicitor - inheritances can bring out the very worst in people, as I discovered. My brother contested the price, my motives etc. I just had to keep my temper and put what my mum and dad would have wanted me to do right at the front, which was to ensure the deal was absolutely fair between the pair of us.

Sort it out now as things can get messy as life moves on . The house needs selling if he has no means to buy out your share .

You get the house valued asap , he pays you 50% of the value by either his portion of the assets or takes out a mortgage to pay.

Well the first question would be, is the estate below the IHT threshold…because if not the house might have to be sold anyway. But, once the IHT situation is sorted, and assuming that you and your brother are the only beneficiaries, the rules for intestacy are quite clear and the estate should be split equally, which would mean a sale of the house. It sounds as if it might be too big for him to run/heat/maintain going forward anyway?

He needs to get on and sell. It will probably be better for him in the long run to have a fresh start anyway, but no sense him rattling around in a large house and letting it go to ruin. If he's determined to do that, better he does it with his own property rather than a joint one.

Unless you’re willing to never see your share of the house, you need to sell up now.
If the house is worth, eg £300k and there’s a further £50k in cash, so £350k in total, that equates to £175K each. If you had the cash now and he stayed in the house, he’s benefitting by £250k.
If it’s a large detached home, he should easily be able to buy himself his own house with his half of the estate.
He can refuse so then you could force the sale and the costs of doing so would be taken from his share. So would be against his best interests.

@Tryingtokeepgoing

Well the first question would be, is the estate below the IHT threshold…because if not the house might have to be sold anyway. But, once the IHT situation is sorted, and assuming that you and your brother are the only beneficiaries, the rules for intestacy are quite clear and the estate should be split equally, which would mean a sale of the house. It sounds as if it might be too big for him to run/heat/maintain going forward anyway?

Yes we are below the threshold as both parents have sadly passed away so we have both allowances - have had this verified by a solicitor as wasn't sure. Given the utilities estimate we've just had for the coming year you're absolutely right, he may not be able to afford to run the house anyway! I can see him going down the route of 'all you care about is money' to me, and suggesting that I lead a charmed life etc and I don't understand etc. I just wasn't sure if I was being unreasonable in thinking that he would probably need to sell the property, and if I should make some allowances for his situation, given that he has anxiety/depression issues. Things like this seem very complicated when you're stuck in the middle. Thank you for all the advice so far.

I assume (sorry) that the cash he’s going to receive won’t be enough to give you half of the house value?
If that’s the case, then you need to seek sound legal advice. I’m sorry for your loss x.

Oh, and the cash wouldn't be enough for him to buy me out of my half of the house, and I doubt he would get a mortgage for that amount (he is currently out of work so zero chance at the moment).

In fairness to your DB, it has only been a few months. And if she had a fairly lengthy illness, he is probably feeling pretty dreadful. My mum died six months ago and until about two weeks ago I couldn’t even think about selling the house. I don’t live there, but being in the house, with all my mum’s things around me is simultaneously very comforting and very upsetting. The idea of selling - of letting go, removing her things - it has been hard to contemplate. The idea of losing a home shared with a beloved mum, maybe it’s just too much for your DB and he is frightened to let the conversation start because he’s knows where it ends.

My perspective is: what’s the rush? You don’t need the money, you said. Spend the rest of the year supporting your brother emotionally, and when he’s ready, help him to start thinking about moving on. You’ll know when the time is right. Don’t rush to make a decision. You talk about fairness, and I agree an equal split of the assets is legally fair, but this is your brother - you have some family responsibility to try and make sure he’s ok about what happens.

I would never have forgiven my db if he had started talking and pressurising me to deal with my mum’s estate before I felt ready to. As it is, he’s been so lovely, I have actually got there quicker than I expected I would. House is valued and will be on the market by end of August. If I lived in the house I would find it harder to simply sell up and throw everything my mum owned away.

@LollyLol

In fairness to your DB, it has only been a few months. And if she had a fairly lengthy illness, he is probably feeling pretty dreadful. My mum died six months ago and until about two weeks ago I couldn’t even think about selling the house. I don’t live there, but being in the house, with all my mum’s things around me is simultaneously very comforting and very upsetting. The idea of selling - of letting go, removing her things - it has been hard to contemplate. The idea of losing a home shared with a beloved mum, maybe it’s just too much for your DB and he is frightened to let the conversation start because he’s knows where it ends.

My perspective is: what’s the rush? You don’t need the money, you said. Spend the rest of the year supporting your brother emotionally, and when he’s ready, help him to start thinking about moving on. You’ll know when the time is right. Don’t rush to make a decision. You talk about fairness, and I agree an equal split of the assets is legally fair, but this is your brother - you have some family responsibility to try and make sure he’s ok about what happens.

I would never have forgiven my db if he had started talking and pressurising me to deal with my mum’s estate before I felt ready to. As it is, he’s been so lovely, I have actually got there quicker than I expected I would. House is valued and will be on the market by end of August. If I lived in the house I would find it harder to simply sell up and throw everything my mum owned away.

Very good points as well, I'm not in a rush per se, but I am of the mind that if this continues for a year or more, complacency will set in and we may get to a point where nothing happens for ages. I don't think it is healthy for him to stay there for too long, and I honestly don't think he can afford to run the house.

In the meantime, what should be done with the chunk of money from the cash assets? It's over 6 figures so a sizeable amount.

He seems to be recovering fairly well from the loss and I think is actually coping better than I am in many ways. He didn't visit her in hospital at all so he never saw her at her worst. I was with her every day so watched the decline and am still traumatised by it. I am doing my best to support him but it is very much a one-way relationship, I give support, but never get support back.

Tbh OP I would push to finalise everything now, for your brothers sake as well as your own. I'd ask when is convenient to sit down and discuss,.make a plan for listing the property and frame it that 'you will have the cash to move on, know how difficult this must be'.

I also would be looking to get it settled in one go. Basically if he can't buy you out the house needs to be sold. Your parents asked for it to be split 50/50 so that's what you should do. Morally and legally that's what is fair. He will be able to buy his one place so he is in a great position. Are you the only executor? Or are you both executors?

The simplest and fairest thing is for the house to be sold and all the assets divided equally between you. Your brother can’t afford to buy you out, there’s no guarantee that he will maintain the house or won’t move a partner in. Too many variables to make it worth the risk.

is there no executor?

When my mother died suddenly, one thing that went brilliantly with my brother (who I am not close to & don't have contact with now) was dividing the estate. We worked well together on that with no disagreements. I will always be grateful about this. I strongly recommend you divide the entire estate asap , OP. Don't let him linger residing in a property you part own & he can't look after. Gently tell him that you both need this division to have a fair & honest relationship going forward and not a relationship where either of you is dependent on or beholden to the other one.

House prices are so stupidly high now -- with cost of living crisis they could crash, now is a decent time to cash in & make sure he has true security in a property he can own outright.

You need to insist it's sold and he buys something he can afford to maintain and run - this is key. If he is adamant he wants to stay then he pays rent at commercial rates on your 50% and he pays for 50% of all maintenance and repair as a fellow owner.

Long term he will be better off financially selling up and moving so regardless of bad feelings you are doing him a favour forcing the issue.

Sell the house, split the proceeds and the cash 50/50. It’s the only fair way.
Your mum left no will indicating that he had a right to live in the house for the rest of his life.

If you can, I would wrap up the estate together. House proceeds and cash, then distributed at the end. Some of the cash may be needed as fees for the house sale anyway.
If your brother receives a significant chunk of cash whilst still living in the house you may struggle to get him to proceed with the move.

Sadly, I agree with the last 3 PP. The best solution is to sell the house, before it deteriorates further and to split the cash equally.
You already think he won't be able to afford the gas/electricity bills and you don't want the house to be subjected to any charges against him for non payment of bills.
I also think it might be worth talking it through with a solicitor if you think that he is going to be difficult.

If, to save an unpleasant family fallout, you took all the money and left him the house, would you feel comfortable with that or hard done by? Obviously it wouldn't be 'fair' but it would save any rancour.

@Candleabra

Sell the house, split the proceeds and the cash 50/50. It’s the only fair way. Your mum left no will indicating that he had a right to live in the house for the rest of his life.

If you can, I would wrap up the estate together. House proceeds and cash, then distributed at the end. Some of the cash may be needed as fees for the house sale anyway.
If your brother receives a significant chunk of cash whilst still living in the house you may struggle to get him to proceed with the move.

I agree. If your Mum wanted him to be able to stay, she should have requested that in a Will. Whilst I don't think you should be expecting it immediately, I'd certainly be sitting your brother down and working out a plan to get the house on the market as soon as it comfortable.

I think the longer he's there, the harder it'll become.

Is there any other relative or family friend that could get involved and manage spitting the assets. Might your brother be more likely to listen to someone who isn't you?

How about looking for some properties that your brother could afford and letting him know the type of place he could afford along with costs and the amount of cash he might end up with? Might you be able to tempt him out of his inertia.

He sounds extremely annoying but I guess that it's difficult if he has mental health issues.

Id imagine that the sooner you get this sorted the better for you and your brother.

I think you need to quietly take legal advice about the scenario of if he refuses to agree to move out of and sell the house. The fairest way is split everything 50/50 and if there's not enough cash to get your half of the estate from then either you compromise (I wouldn't) or he needs to see sense and do the right thing and agree to sell.

I would do this sooner rather than later.

Approximately, what is the house itself likely to be worth?

Depending on where he would want to live, would 50% of that, plus 50% of the other money in the estate, allow him to buy himself a property outright?

If so, might that appeal to him? Could he furnish it with stuff from your mum's home so he felt comfortable with the change of surroundings?

As the house will need to be sold to settle the estate, he is classed as being made homeless, he needs to go to the council and register this. He won’t be high priority, but, once accepted onto the register, it will give him access to shared ownership schemes in your area.

The cash and whatever share your brother will have from the sale of the property, could mean that he can afford to buy say a 75% share with social housing buying the remaining 25%.

In return for living rent free, yiur brother needs to maintain the property so that it is reasonably fit for resale. Keeping the garden tidy, and the paint fresh etc.

Have you applied for probate? You’ll need letters of administration in order to deal with the estate.
www.gov.uk/applying-for-probate/if-theres-not-a-will