How can we stop my brother in law scuppering our house buying?

[PainintheLaw]

My DHs mother lives in USA and is comfortably well off. Not hugely so as she has lost a bit of money in the housing/shares dip in the USA, but still doing ok. She has some money in the UK, as a result of selling a property when DHs father died. It is just sitting there doing nothing (well, apart from earning interest!).

She has offered to give us a sum of money as a deposit on a house - half the money in the UK to be precise. We live in a flat in the city and she wants us to have a garden for our DD, and more room, so she can have space when she comes to stay in UK. Of course we want this too, however, it is important to emphasise that MIL offered this money to us after we visited her in the USA.

After DHs father died, DHs brother has sort of taken control of the 'family' finances, so to speak. MIL has authority, but takes counsel from BIL, as he lives in USA. Far enough. When DHs father first died, MIL was going to lend us some money to buy a property, not a lot, but enough for a deposit. A reservation of hers at the time was that we were not married and she wanted to protected her family assets. Fair enough again, I understand that completely, so we offered to right a clause, or have her part own it. DHs brother talked her out of it, saying it was not a good idea to lend us money, we are rubbish with it blah blah blah.

He told us we should make do with what he does, which is a little place.

BIL lives in a largish apartment in a crappy part of NY, earns a lot of money spends little and 'makes do'. Hates spending money for the sake of it. He does not see why we would want to move house, we are fine where we are surely? Like he is.

So, we have not told him about the offer of the money for a house. And now we have put our place on the market, and are worried about telling him in case he tries to persuade MIL to change her mind. She is vulnerable, not as astute as her husband was financially and relies on BIL for guidance.

Any ideas how to tell him? Other than this, DH and I have great relationship with him, he is a good bloke, but very stuck in his ways and quitte devious when he wants to be.

BTW, the other half of this sum of money is going to him, as he is hoping to move here next year. He does not want it now, he has already told his mother he does not need any money from her, so he does not know she has offered this to us.

Come on Mners - someone must have an opinion on how to handle this?

I am relying on you to give me some tactful suggestions err did I just say that?!!

why does he need to know about this? surely she's going to tell him anyway?

Can I suggest your (or your DH) speak to your MIL about what happened last time and that you are worried about it happening again esp now you have put the house on the market.

Sorry can't be much more help, but never been in the situation where money was offered

So basically your MIL has offered to lend you a large sume of money, her other son does not know about this and you are worried about what will happen nif he finds out?

Are you feeling that you have amoral obligation to tell him, you mentio that your MIL is 'vulnerable' financially, is are you feeling on some level that you might be taking advantage of her (just trying to get the full picture).

Only you know whether it is 'ok' to take the money. FWIW I don't think you have a moral obligation to tell your BIL, and unless she mentions it why would you want to. On the other hand, as frustrating as it may be, if she is going to allow herself to be 'talked out of it' then there is not much you can do. When will she give you the money? At exchange? What sort of clause is it going to be. i personally think it is a very very bad idea to have a relative 'own' a stake in your home, it can get messy (i have seen it- believe me!) can you instead get a 'deed of trust' drawn up or a simple contract stating what you have borrowed and under what circumstances you would be liable to repay?

It sounds as though your BIL will inevitably find out

It also sounds as though he will disapprove

It doesn't sound as though he will disapprove because he is greedy or is exercising undue influence

So his disapproval boils down to one of the following

(i) He thinks his mother cannot really spare the money, or

(ii) He thinks you should make your own way

Both of those might be valid points of view.

Why can't you earn your own money for a house?

Advice - no not that we are taking advantage of her, not at all. We did not ask for the money, and it makes financial sense for her to invest it in a property that she will use rather than just sat there. She has no intention of taking to over to USA. What I mean by 'vulnerable' is that she takes guidance from BIL about how to manage her money as she has less idea than her husband did.

Its not really a question of taking the money, and there is absolutely no question of not telling him. Its more that he has the ability to change MIL mind. And now, really we are at the stage of feeling we should tell him. DH always talks to his brother about things and I think, not to tell him could damage his relationship with him.

The clause was last time - to show her we were serious. This time there is no claus. It is DH getting some of his inheritance early. Last time, we were not married and no children. This time we are married, with a child, and she wants to help us now. It is a big thing for her (generation perhaps?) that we are married.

I just dont want BIL to try to persaude MIL because he would not want to use the money. If she did not want to give us it, we would never have asked her for it, but if she wants to help us out, then I think thats fine.

Quattro - he is not greedy, absolutely not.
He does think we should earn our own money. And we do, we work really hard and have made it on our own so far.

And will continue to do so. Should this money not be available, we will continue with our plans as we were, and we will get our own house eventually (are in a flat that we own already, with equity in it, so this combined with the money given, plus a little more on our mortgage would give us enough for a house).

This remark is disingenuous

"it makes financial sense for her to invest it in a property that she will use rather than just sat there."

How can it make any kind of financial sense for your MIL to invest in your property? That simply can't be true unless you were planning to pay a market rent to her

I think you should take some legal advice about the best way of doing it and putting it in writing (either as an advance on inheritance, a gift or a loan). Because if you can show the BIL legal documents that demonstrate clearly that your MIL is not being ripped off by you, and that it is all formal and correctly done, then he may well be happy to accept it. And frankly for anything over a few 100 even between family members there should always be an agreement in writing about how much and whether it's a gift, a loan or an investment.

I think all you can do is be very honest with.

say something like...we are extremely grateful for your offer and it seems to make sense for you and us, however we need to know you are absolutely sure that you won't be changing your mind, as we are now at the stage of placing our house on market and will soon be incurring legal fees etc. We know that (BIL-name) has guided you in the past and are abit concerned that given his different values he may want you to change your mind.....how do you think we can get around that.....

not as formal as that but thats the gist.

I dont think you can 'stop' BIL from trying to 'scupper' things, if he has very different values etc (does he have afamily etc?) the he won't suddenlt change his perspective. Its all down to the MIL really.

good luck with house purchase!!

I don't think it is up tp you to tell him and if your MIL doesn't lend you the money, or is it a gift?, because of what he says, there is nothing you can do about it really.

well firstly, i think your dh should speak to your bil about it, and have a very good argument prepared for your bil's objections. i would also have your dh speak to mil and ask her about last time - being talked out of it by bil, and whether she feels similarly this time.

i agree that everything should be put in a legal, binding document and bil can peruse it too. but ultimately, it's not actually his business. it's between you, dh and mil.

Quattro I think your remarks are a bit disingenous!

have you seen the prices of houses lately?!
People need all the blooming help they can get!!

If the MIL has money to spare, and has expressed the desire to support her family to make a bettr life then why not, as long as she is of sound mind lol!!

I got the impression from the OP that the MIL was planning on visiting them in the new, slightly larger house, hence it would make more sense to invest for these two reasons rather than just in any old property.

just my thoughts

agree with madamez -your mother in law needs some advice (not least as there may be gift tax implications for her).

I am also slightly confused - is this a gift (ie early inheritance) or an investment for your mother in law. Either way its your mil decision but there are slightly different consequences for her and she probably needs proper advice.

Quattro - what I mean by that is that she spends 3-4 months over here per year, and either stays with us or rents somewhere. If the money is in a place we own, she gets to use the additional space.

I do not know much about finances at all, not really, so I cant say whether it does or not, you are right. perhaps what I should have said was 'it makes logistical sense?' or something like that? Its one of her own incentives for offering the money.

Madamez- i think you might be right, and we have discussed this, me, DH and MIL, and neither DH or MIL think this is important, as BIL can have the other half of the money any time he wants?

How, please are my comments disingenuous?

Parting with a large capital sum cannot be said to be in the MIL's financial interest at all. She may derive a minor benefit from it in that she saves on hotel bills when she comes over, but it simply cannot be said to be in her financial interest. If you tot up the capital and the interest foregone, I would imagine they'd pay for a few stays in some choice hotels. That's what I was objecting to.

The brusquenss is due to a conversation with my daughter yesterday. She is 10. She said that after university (which she expects us to fund, and we probably will) she would like us to buy her a house. Just a little one. So I had a slightly exasperated conversation about self-reliance and independence and making her own way in life.

Quattro - i do understand what you are saying, I get where you are coming from. DH and I have always stood on our own two feet, we have worked hard, went to uni, with no family help, bought a flat, and worked hard to stay on top of finances with a new LO.

We are doing well, but not well enough to move into a house, as advicepleasemums rightly said.

It is not a formal investment by MIL, it is a 'gift' or early inheritance, or which BIL which get the same amount should he choose to take it.

Last year MIL started the processes of buying over here, but decided that spending money on a property which meant bringing money from USA here, just for her to stay in for 3 months of the year was not a great investment. So I disagree with that part Quattro - I think this is a better use of her money, which will give her space whenever she pleases, rather than bringing money from USA in current market.

I agree with legal documents tho, will try to get DH to see this.

Quattro

People have incentives other than purely financial, people part with large capital sumsfor all sorts of reasons, money is after all made to purchase things of value to an individual.

My Dp and i are very very lucky that we own a home, whilst i was toiling away at university in professional training, thank god my DP had bought a small flat which over the years meant he could buy a house then when we met each other allowed us to buy a bigger house. My toil at university was worth not a jot as even on a professional salary I could never have afforded a property in the current climate!!

My Dp and I a long term savings plan to specifically help our Ds buy a house, because FFS he wont ever be able to unless we give him a leg up (well maybe he will be incredibly talented and will keep us in a style we have yet to become accustomed to but i doubt it lol!)

Its good to expect our kids to make their own way but the road is pretty rocky out there and i just think it makes sense for those that have to help those that haven't a little bit, if that is what they want to do.

And surely 4 months ayear in a hotel is going to cost more that the interest on even a reasonable sum of money?

and advicepleasemums thanks a bit of backup appreciated!

I agree that people have all sorts of motives for doing things, and that it is natural to want to help one's children, and equally one should not condemn those children for wanting to be helped. But I have to say I didn't like to see it dressed up as being in the MIL's own financial interest.

I don't know what sums are involved. Say £200k? Interest on that alone would be £12k - enough to rent a property in the UK for a 3-month stay without touching the capital ...

DH and MIL attitude is what is the point of having money if it not used? otherwise it is just numbers on a bit of paper/computer, it does not actually exist. DHs father and BIL on the other hand like 'figures'. They like the mathematical side of it. Money is not there to be used, its there to multiply, for no other reason that because it can be done, and is difficult. Different perspectives, and I dont think either is wrong.

Quattro god no, not that kind of money? I wish! much much much much less than that! We could buy an entire house where we live for that much money!

Lets say tens, rather than hundreds.

I didnt get the feeling it was £200K!!!!

But maybe I am wrong.

Unfortunately i live in a world where I will never see such a princely sum although I know it may not be much for some....

I suppose you could ascertain the extact amount then do the sums and see if it is strictly financially beneficial, but maybe the OP's MIL would actually prefer to stay with her family, even if it is a less attractive option financially.

I guess I did not make it clear enough. She is not giving us money to buy the house, but enough to put down a larger deposit that we will have with equity from our flat.

We will still have a mortgage to pay, and continue making our own way, and it will definitely be cheaper than MIL renting a property in UK for 3 months. Maybe not instantly but it will recoup.

"DH and MIL attitude is what is the point of having money if it not used? otherwise it is just numbers on a bit of paper/computer, it does not actually exist."

I am beginning to have a lot of sympathy for BIL

You do need to tell him and make sure it is all done legally and properly.

Good luck with the househunting.