# Inheritance - can family home be "sold" prior to owner's death?



## Macbeth (11 Jan 2012)

I would appreciate some advice regarding an inheritance issue.
The situation is that due to illness, my mother has now had to leave her home to reside in a nursing home.
In her will, the proceeds of the family home are to be divided equally among her six children, after her death.
In advance of that, is it possible for one of the siblings to "buy out" the inheritance rights of any/all of the others,
so that when the inheritance eventually becomes due, he/she has the full ownership of the house?
Are there any potential legal or other difficulties with such an arrangement?
Many Thanks for any comments.


----------



## emeralds (11 Jan 2012)

Has the house been valued? And what happens if the house is worth (for ease of the maths) €600,000 so that each sibling will get €100,000 so the one who wants to buy spends €500,000? And then the house price falls....and falls..
Why would someone want to do it?


----------



## putsch (11 Jan 2012)

Inheritance only comes in to play when a person dies. In this case the mot!her is not dead........so unless she has mental incapacity she can do what she likes.....sell the property to a child for whatever price she likes.....divide the price she receives among children (or not). Its totally up to your mother as the owner of the asset to decide when, to whom and for how much she sells. She can also change her will at any stage.

In general I think that testators should not disclose their wills - many a slip twixt cup and lip


----------



## Macbeth (11 Jan 2012)

_.....so unless she has mental incapacity she can do what she likes.....
_Thanks for the replies. Unfortunately, mental capacity has become an issue, so the will is very unlikely to change.
One of the siblings wants to buy the house and live there but naturally wants some security for the future.
In relation to the house price, the proposal will be that some agreed discount on the current house price will be agreed
and everybody will take then their chances regarding future market price falls/rises.
My main question concerns the legality of making such an arrangement and whether it could 
lead to any problems later. Thanks again.


----------



## Eithneangela (11 Jan 2012)

Unless your mother has granted Enduring Power of Attorney to somebody, the only legal document which matters is the will. Doesn't matter what agreement the siblings arrive at - there will be lots of issues with the relevant authorities when the time comes to process the will. Who is the executor? Can the executor apply for Enduring Power of Authority on behalf of your mother? Very tricky situation - be guided by your legal advisor.


----------



## huskerdu (12 Jan 2012)

I am guessing that one sibling wants to move into the house and  eventually buy it and maybe wants to put  money into the house and  doesn't want to when they don't own it.  Is why do you not want to wait   ?

There is nothing to stop one of the children buying the house from her and then the proceeds become the estate.  However, as with all family / inheritance situations, I would strongly advise that all the siblings are fully informed and happy that the situation is fair. 

Either one child simply buys the house for the full market price or buys the house for 5/6 of the market price and renounces their inheritance rights. 

The risk of this is that your mother needs the money for medical care and spends it and the other 5 siblings get a smaller inheritance that they feel they would have otherwise.

Also, if the house increases in value, the other 5 may think that the sibling who bought got a bargain.


----------



## Harry31 (12 Jan 2012)

Would the house have to be sold to pay for the nursing home?  What are the regulations regarding that situation?


----------



## Macbeth (16 Jan 2012)

Thanks for all the replies.
_...I am guessing that one sibling wants to move into the house and eventually buy it and maybe wants to put money into the house 
and doesn't want to when they don't own it. Is why do you not want to wait?..._
- That's it exactly. At a time of falling house prices,
nobody would want to invest in home improvements if they did not own the property or have a realistic prospect of so doing.

_...There is nothing to stop one of the children buying the house from her and then the proceeds become the estate. 
However, as with all family / inheritance situations, I would strongly advise that all the siblings are fully informed and happy that the situation is fair...
_- They would be fully informed. The problem with selling the house - apart from mental incapacity issue - is that the proceeds
would become part of the estate and could then be eaten up by nursing home care costs.
As long as the house remains in the mother's name, there is a limit to any potentail lien against it, a max. of 15%, I understand.

My real question hinges on the legality/enforceability of an agreement made between the prospective buyer and another sibling.
In exchange for an agreed sum, could the "seller" sibling(s) sign a document relinquishing their inheritance rights in favour of
the "buyer" sibling?


----------



## Brendan Burgess (16 Jan 2012)

Let's say that there are 5 siblings and the house is currently worth €500k. 

It is better for the mother to keep the house as the state will pay her nursing home fees above 15% of the value. 

A wants to move into the house and make it her permanent home. She doesn't want to spend money on it in case she doesn't get the house. 

A could agree a written option to buy each sibling's share of the house from them on the date of death of the mother.  

If the house is left equally. A buys the house from the executor and the executor distributes the money.

If the mother leaves the whole house to B and disinerits the others, it won't matter, as A has a contract with B to buy their share of the house, which happens to be 100%. 

If the mother leaves the house to the cats and dogs home, then the option would be void. 

The main problem I see with this is if the work done by A increases the value of the house.  They would have to agree a variation of the option to cater for that.


----------



## mf1 (17 Jan 2012)

And the main problem I see with this is that the mother does not have capacity! 

I don't believe it is possible to enter into any form of agreement involving the mother unless she is made a Ward of Court. And then any agreement involving the mother would have to have the imprimatur of the High Court. 

By all means the siblings could enter into some form of option agreement but, frankly, given the normal humans capacity to "disremember" important issues when it suits them.............

mf


----------



## Macbeth (17 Jan 2012)

Thanks again...

_A could agree a written option to buy each sibling's share of the house from them on the date of death of the mother. 
_
But can A agree a price with B and pay him/her off* in advance* of the mother's death?


----------



## Vanilla (17 Jan 2012)

The house can only be sold if the mother is made a ward of court, her committee can then sell, subject to approval of the courts. 


Under the Fair Deals scheme any assets disposed of in the 5 years prior to entry into the scheme are also taken into account which is one problem. The other is that even if the mother is made a ward of court and her committee legally sells the house, the proceeds are designated for her care, and cannot be divided out among the other siblings. So one child may get the benefit of her 1/6 'entitlement' immediately but the other 5/6 is subject to nursing home costs or at the very least, the deduction under the fair deal scheme so that too would have to be taken into account.


----------



## Macbeth (17 Jan 2012)

There is no intention to sell the house at this stage - merely the desire on behalf of the intending eventual purchaser to obtain in advance as much security as possible by attempting to buy out the prospective inheritance rights of some or all of other sibling(s).


----------



## Vanilla (17 Jan 2012)

Macbeth said:


> There is no intention to sell the house at this stage - merely the desire on behalf of the intending eventual purchaser to obtain in advance as much security as possible by attempting to buy out the prospective inheritance rights of some or all of other sibling(s).


 
You're contradicting yourself- no intention to sell versus attempting to buy out- it's the same thing.


----------



## putsch (17 Jan 2012)

Ditto to Vanilla and MF........

Either ......
Mum has the capacity to enter into a transaction in which case she must agree to this (please, please realise that a "will" is something that takes effect only when someone dies and has no legal effect whatsoever in advance - you may say it will not be changed and maybe it won't be changed by Mum but if one sibling dies/emigrates/commits a serious crime/divorces things may change legally)
or 
she does not have capacity - in which case as set out (and assuming the absence of enduring powers of attorney) she must be made a Ward of Court with a Committee who will take the decision on her behalf.

For what its worth in my experience this kind of arrangement is extremely dangerous not only for the older person (giving rise to a feeling of  "when will she die.....we need legal title to raise a loan on "our" property?"). But also many, many nasty consequences in sibling relationships many of which cannot be foreseen in advance.


----------



## seantheman (17 Jan 2012)

Macbeth said:


> But can A agree a price with B and pay him/her off* in advance* of the mother's death?


 
Are we working on the basis tha A & B will definately outlive mother?


----------



## terrysgirl33 (18 Jan 2012)

The question of the siblings inheriting the house arises if, and only if, the mother owns the house at the time of her death.  If the house needs to be sold to pay for nursing care, then the sibling who wants it should buy it outright from their mother, and their mother has full use of the money to spend or not as necessary.

The house does not 'belong' to the siblings until their mother dies, and there is no guarantee they will get it then.  Trying to buy out some siblings inheritance now is just gambling.


----------

