Is there a fair way to split this money or is it going to cause a fall out?

[Sourwitch]

A couple get together in 2000, let’s call them Harry & Sally and they got married (both in their early 70’s now)

Harry moved in to Sallys house

Harry has two adult daughters from a previous relationship and Sally has two adult sons.

Grandchildren on both sides.

Both worked until about 2012 and took early retirement.

In about 2012, Harry came in to some money (inheritance) that was worth more than the value of Sallys house, say £150,000 and they used that money to upgrade the house (new kitchen, bathroom and roof) buy a brand new car each, go on expensive holidays, such as the Caribbean several times, cruises, Las Vegas, Dubai and staying in expensive hotels and basically enjoining their retirement and spending the money he (they) came in to. It enabled them to take early retirement too.

There is no capital left now as it’s been spent over the years on the above.

If they were doing their wills, should the house go to Sally’s sons and nothing for Harry’s daughters, because the house was hers to begin with and only in her name and she’d paid off a lot of the mortgage before they met.

Or should it be split between both Harry and Sallys adult children, because Harry brought more money in to the relationship than Sally, but because it wasn’t in bricks and motor it was all spent on their joint pleasure. Sally absolutely benefited from the lump sum and the hosue was upgraded.

I think the house will be earmarked for Sallys children, however I think Harry’s children will have something to say about it. I can see a family feud brewing…..

(I’m none of the above)

What would you suggest is the solution?

Split it equally 4 ways. Undoubtedly noone will be happy but 20 years later Harry will have paid his way as far as the house is concerned. Sally has also benefited from the inheritance and they both will have benefitted from each others pensions.

If noone likes it tough.

All this talk of splitting teh inheritance seems to think that the married oldies will die at the same time. But time is a critical part of all of this. Things will be more complex if one outlives the other, especially if medical bills, house moves, care home fees, new relationships etc etc.
Marriage means the surviving spouse will need reasonable provision from the estate of the deceased, irrespective of the will and house deeds.

So the parents need to do some scenario planning. Very few people want to be the landlord to their MIL or FIL. It's a nightmare.
Perhaps they could sell the house and rent? Or (shudder) equity release? They could invest the money elsewhere in a way that is easier to distribute how they might like.

Exactly- Who knows…. I don’t know the ins and outs and even if I was one of the children (I’m not, nor a partner, so it doesn’t impact me financially one iota) I still wouldn’t know as everything is shrouded in secrecy, which seems to be a common theme in these situations. Then when the inevitable happens there is all sorts of questions/problems.

Perhaps they could sell the house and rent? Or (shudder) equity release?

Er, no thanks! Your home is your home, not your DC's future inheritance! There may be nothing left anyway if care is needed.

They also may not stay there either given it has been the house for years, they may downsize together or get eaten up in care

@Sourwitch we know the children’s views what are Harry and Sallys

With that contribution we could ask “why answer”!

OP I think as mentioned many times this is one of those situations where someone will be unhappy.

Harry and Sally need to decide and be sure about their reasons and why. But Is certainly make sure whatever Will states Harry can live there if Sally dies first until his death or sold for care home fees.

It should be shared equally so all 4 children see that they are being treated equally as if they were siblings

If Harry is arguing the toss he may end up divorcing her, in which case I reckon it will be 50:50.

I am on the side of an equal split, this is not a new relationship. They may also be arguing over nothing as that could easily be eaten up by care home fees.

No my point is how can it be proved?

Sorry I don’t understand? How do you “prove” how much you spent on putting in a new kitchen???? You look at the invoice or at your bank account if you don’t keep records. These are big ticket items not “we bought new mugs in 2005”.

The point I’m trying to make is that this is all stuff that has to be proved a long time after purchase. Sounds like in a potentially hostile environment so likely to be disputed. I very much doubt Harry’s kept receipts of everything since 2012 or whenever he started paying for stuff . Holiday costs impossible to prove I reckon .

No one knows…..

Harry may have been very clear from the start that he wanted no claim on the house. (He may not think his kids deserve any inheritance which is why he blew a load on nice holidays and cars!)

If that’s the case Harry needs to put his big boy pants on and tell the kids this before he dies. Because they will understandably take it very amiss if Sally says “oh yes your dad did mention to me you shouldn’t have any money and I should have it all to do what I want with”.