# 5 children inherit a house - one wants to buy but can't get mortgage



## Pinoy adventure (19 May 2021)

How does a charge on a house work if siblings are involved ? 

The case involves 5 kids & family home (4 who have there own homes) and 1 who doesn't but lives in the family home.
The will states house can be sold too any member of family with the sale money divided equally between all 5.
The value of the house is about €300,000.
The child who lives in the house would not qualify for a mortgage as she was a carer for the mother who passed away (but has a good bit of savings roughly €160,000).

In this case how would a lean on the house work if she was too buy out the other 4 siblings with all her savings ???

What options would she have in acquiring the home.
Any advise would be great.
Thanks


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## Brendan Burgess (19 May 2021)

So each person gets €60k 
She needs to find €240k.
she has €160k.
She can buy out two siblings completely for €120k which leaves her with €40k
She can owe one of them €20k and the other €60k. 

If she gets on well with only one of her siblings who does not need the money, then she can buy the house.

No need for a lien if the family trust each other. 

But if not,  the occupier and her helpful sibling can buy the house together so her name would be on the deeds. 

Has the occupier any chance of repaying the loan. 

If she has saved €160k , presumably she has income in excess of her expenditure.

Can she rent a room to help her repay the loan? 

Brendan


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## Pinoy adventure (20 May 2021)

Thanks for your reply Brendan.
Occupier has a chance of repaying the balance within a few years time frame.she also has income in excess of her expenditure.

Would it be better too pay  option 1 -4 x €40,000 or  option2- 2 x €60,000 + 1 € 40,000 with a balance of €60,000+€20,000.

The 5 would not be on great terms so too speak as the family home is a touchy subject since the parents passed away.

Too try sweeten the deal if going with option 1 would a 10% interest on the balance €20,000 (payable let's say in 10 years time,this is where the lean comes in ) be advisable or a total non runner ? 

Would there be any tax issues here if she pays siblings directly or forgoes her 20% share of the property ? 

Thanks


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## Brendan Burgess (20 May 2021)

Pinoy adventure said:


> Would it be better too pay option 1 -4 x €40,000 or option2- 2 x €60,000 + 1 € 40,000 with a balance of €60,000+€20,000.



This doesn't make any difference.  It's what the siblings agree among themselves. 

If one person insists on her share now, she has to be paid the €60k.  If one is prepared to wait, then she "lends" the occupier the €60k. 

Nobody is forgoing any share and nobody should.  She is buying them out but deferring payment to two or more of them.  

The best strategy would be to try to pay off the most difficult and problematic ones in full, so she is dealing with only two.  Then over time "repay" the €20k , so she is dealing with only one person. 

She should not build up savings for ten years and then pay it off. She should start paying asap and try to get rid of these loans. 

10% interest is very high. If she owes €80,000 , it would cost her €8,000 a year.  The recipients would be taxed on it as income. 

It might be simpler for her to go to the Credit Union and ask for €80k. But their rates are very high.

Or alternatively, owe the €80k and pay it off as quickly as possible.  If the two cooperative siblings need the money before it's paid off, she could then go to the Credit Union.

Brendan


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## Pinoy adventure (20 May 2021)

Thanks again Brendan.

Would setting up a account with the 2 she would borrow from be a good idea and start paying into the account weekly/fortnight/monthly ? 
Would you think the loan should have a contract and interest applied  ?


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## Brendan Burgess (20 May 2021)

She will have two loans - A and B.
She does not need an account. She just needs to set up a standing order and pay €x per month to whomever it is agreed she should pay first.

The property will need to be officially conveyed by a solicitor to the occupant.  
I presume that the solicitor will note the deferred payment of the purchase price.

So yes, there has to be an agreement. 

It really is up to them whether they want to charge interest or not.  I would think that they should try to facilitate their sibling and get the deferred amount paid as quickly as possible.

Brendan


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## AlbacoreA (20 May 2021)

I assume the person was out, or mostly out of the workforce for sometime.
Is there any risk of them not being able to maintain a loan in the future.
It would seem in no ones interest to leave them with a big loan (relative to income) and vulnerable to default in the future.

If it were me I would hope to leave them financially independent from their siblings.
I could see any financially dependency has a the potential to be problematic in the future. People can grow resentful.


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## Brendan Burgess (20 May 2021)

AlbacoreA said:


> It would seem in no ones interest to leave them with a big loan (relative to income) and vulnerable to default in the future.
> 
> If it were me I would hope to leave them financially independent from their siblings.
> I could see any financially dependency has a the potential to be problematic in the future.



The occupier wants to continue living in the home.  

It would be great if she could write a cheque and pay off all the siblings and be independent. 

But she can't.  

She has a problem _now _which she can solve with a bit of cooperation. She should not dismiss this solution just in case of _potential _problems _in the future_. These problems might not come to pass. 

If it turns out that she can't repay her loan of €80k, then she can sell the house, trade down and repay the loan. 

But for the moment, she should try to stay in the house as it's nearly within reach.

Brendan


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## Pinoy adventure (20 May 2021)

AlbacoreA said:


> I assume the person was out, or mostly out of the workforce for sometime.
> Is there any risk of them not being able to maintain a loan in the future.
> It would seem in no ones interest to leave them with a big loan (relative to income) and vulnerable to default in the future.
> 
> ...



You are correct she was  out of the work force since becoming a care giver for her mother for the last 4 years.(it was agreed she would become the carer when her father passed away ) while the siblings all have full time jobs.

She will rejoin the work force pretty soon which will make paying off the loan sumwhat easier,with a salary of about €2000-€2500 monthly.

Most of the siblings would like too keep the family home within the family (this part can become tricky once money/feelings are involved).


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## Gordon Gekko (20 May 2021)

Can half the money (i.e. €120,000) not be paid to everyone now with a view to the person rejoining the workforce and then getting a mortgage for the other €120,000 to take everyone out?


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## Sue Ellen (21 May 2021)

Pinoy adventure said:


> You are correct she was  out of the work force since becoming a care giver for her mother for the last 4 years.(it was agreed she would become the carer when her father passed away ) while the siblings all have full time jobs.
> 
> Most of the siblings would like too keep the family home within the family (this part can become tricky once money/feelings are involved).



Was any financial allowance made within the family for her giving up her job?  If no allowance was made financially for her being the full-time carer for 4 years it would appear a bit rich now for others to think '(this part can become tricky once money/feelings are involved)'.

Another thing that rings alarm bells for me is when I read 'Most of the siblings would like to keep the family home within the family' especially if she is having to buy them out.  I often feel that it is best to let the family home go and people in this lady's situation get their own home because even though it will be her home other family members sometimes feel that they still have a right to make use of it.


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## presidenttttt (21 May 2021)

It does sound like the other siblings want the best of both worlds- full market value and the family home staying in the family. And that’s ignoring the career sacrifices made.

Sadly that’s why these things so often end in a row, a combination of emotion and greed. Often when the solution is obvious, stares everyone in the face, and requires the most minimal of flexibility.

If things do get sticky, a perhaps curve ball option would be to engage someone everyone respects to hear all the interests and desired solutions, and have them arbitrate a fair outcome - then people accept it or they don’t.  Of course someone refusing ultimately means the place needs to be sold- so it will become clear fairly quickly whether people have the appetite to find compromise and keep the family home in the family and to show appreciation to their sister, or whether nailing money comes first.

For everyone’s sake, especially those who do get on well and want to keep it that way, everything should go in writing, via a solicitor once agreed.


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## Brendan Burgess (21 May 2021)

A lot of you are missing the point. 




Pinoy adventure said:


> The will states house can be sold too any member of family with the sale money divided equally between all 5.





Brendan Burgess said:


> She needs to find €240k.
> she has €160k.


So she can pay off two in full immediately.
She needs to get two to cooperate by deferring part or all of the payment.  

That should be her first objective. If she can get that, then she buys the house and the first two can do nothing about it. 

If three refuse to cooperate in any way, she needs to raise €20k to buy out three of them in full. 

No need for family mediation on this unless none of them will agree to a full deferral while some combination will agree to a partial deferral.

Brendan


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## Pinoy adventure (21 May 2021)

Gordon Gekko said:


> Can half the money (i.e. €120,000) not be paid to everyone now with a view to the person rejoining the workforce and then getting a mortgage for the other €120,000 to take everyone out?



Gordon I'm only assuming that it would take a a few months (6-12) too build a good solid savings history too qualify for a mortgage.
She was receiving carers allowance for the 4 years of caring and has now switch of too jobseekers unemployment payment.


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## Pinoy adventure (21 May 2021)

Sue Ellen said:


> Was any financial allowance made within the family for her giving up her job?  If no allowance was made financially for her being the full-time carer for 4 years it would appear a bit rich now for others to think '(this part can become tricky once money/feelings are involved)'.
> 
> Another thing that rings alarm bells for me is when I read 'Most of the siblings would like to keep the family home within the family' especially if she is having to buy them out.  I often feel that it is best to let the family home go and people in this lady's situation get their own home because even though it will be her home other family members sometimes feel that they still have a right to make use of it.


 
Sue - no financial allowance was made apart from her receiving carers allowance in respect of the care she provided + living in the family home (she paid the bills + grocerys )
I was also thinking along the same lines that if they did sell the home she would receive her 20% share which she could put too whatever she has saved and buy a cheaper place.
The family home is in central Dublin so even with her xx savings + 20% she might find it difficult buying a place too her max value.


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## Gordon Gekko (21 May 2021)

Pinoy adventure said:


> Gordon I'm only assuming that it would take a a few months (6-12) too build a good solid savings history too qualify for a mortgage.
> She was receiving carers allowance for the 4 years of caring and has now switch of too jobseekers unemployment payment.


Yes, being made permanent basically, so probably 6-12 months.

Less than the time it takes for probate basically.

I’d pay them each €30k when the time comes and then get a mortgage for the other €120k. And make it all legally robust obviously.


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## Sue Ellen (21 May 2021)

presidenttttt said:


> It does sound like the other siblings want the best of both worlds- full market value and the family home staying in the family. And that’s ignoring the career sacrifices made.





Pinoy adventure said:


> Sue - no financial allowance was made apart from her receiving carers allowance in respect of the care she provided + living in the family home (she paid the bills + grocerys )



Good God, talk about Irish style and akin to stuff like The Field.

She gave up her career for 4 years and possibly saved them a fortune in looking after their mother, she paid the bills and groceries and the now the situation is tricky because of feelings/money involved   She should run a mile because as I said already there is a reason why they want the house kept in the family.

I know one young couple who took out a mortgage and paid the parents the value of the house and they live there but the parents have since died.  Family who live abroad think nothing of imposing on them when they come home on holiday and others don't see any problem in calling in uninvited on a weekly basis for meals etc.  Brass neck springs to mind.


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## misemoi (21 May 2021)

Not only did she save them financially, she saved them emotionally.  Her siblings knew that their parents were in the care of a close family member, potentially able to stay in their own home because of her presence.  This is unquantifiable in peace of mind terms and they should count themselves lucky that they had her to do this.  I really hope that they understand the value of this!  While I know it is a very common thing that families fall out or become greedy over inheritances, it makes me slightly queasy.  It can be a very complicated and messy situation, but in cases like this I really feel like the carer sibling deserved more than a straight split in her inheritance.  I hope it all works out amicably.


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## Brendan Burgess (21 May 2021)

But it was up to the mother to make allowance in her will for the care her daughter gave her.

I agree that she should have left the house or, at least, a greater share of it, to the daughter, but she chose not to. 

I am not sure that arguing this now will get her anywhere. 

If one of the siblings feel like that, they can gift her their share.

Brendan


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## Clamball (21 May 2021)

Brendan is right, she only needs €80K.  So give to siblings €60K each, hopefully the two she gets on least with.  Then give the other two €20K each, and she will owe them €40K each.  She gets a job, and in 6 months gets a mortgage for €80K and pays off the last two siblings.

Every sibling gets €60K inheritance and she gets a home with a relatively small mortgage.  Maybe the house is worth more than €300K and the costs of buying add some extra costs but maybe the siblings will be happy with the €60K each.


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## Pinoy adventure (22 May 2021)

Thanks for the input all.
We have spoken again today,would there be any Tax issues if she pays the siblings either 60k or 40k each ? 

How would the stamp duty be split ? Would she only pay 80% of the total amount due as she inherited 20% value of the house ? 

Thanks again


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## Pinoy adventure (27 May 2021)

A little update on this case.
1 of the siblings has offered too sell there share too the sibling living in the house.
The price is fair and both sides are happy too proceed.
The sibling wants a quick sale (cash deal outside of will ) what would be the best way too proceed ???

Would there be any taxes/stamp duty due on the 20% share ???

Would a contract signed up and witnessed by the executors/all parties involved be enough or would a solicitor need too be involved ? 
Thanks


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## Brendan Burgess (27 May 2021)

Pinoy adventure said:


> would a solicitor need too be involved ?



Not at all.

Just go to the pub. Have a few pints. Chat about it. And shake hands on whatever you agree.

It's not as if it's about something serious. It's only her home and it's only €60k.

And as it's family, they are very unlikely to ever fall out over it.


Brendan


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## ClubMan (27 May 2021)

Pinoy adventure said:


> A little update on this case.
> 1 of the siblings has offered too sell there share too the sibling living in the house.
> The price is fair and both sides are happy too proceed.
> The sibling wants a quick sale (cash deal outside of will ) what would be the best way too proceed ???
> ...



Isn't your mother's will going to have to go to probate before anything else happens?

By saying that one sibling has agreed to sell their share are you perhaps implying that the others are holding out or may not want at all to sell to the resident sibling?

If all siblings are not likely to agree and cooperate on the sale of the house to the resident sibling then I think that the questions in your original post may be moot.


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## Pinoy adventure (27 May 2021)

ClubMan said:


> Isn't your mother's will going to have to go to probate before anything else happens?
> 
> By saying that one sibling has agreed to sell their share are you perhaps implying that the others are holding out or may not want at all to sell to the resident sibling?
> 
> If all siblings are not likely to agree and cooperate on the sale of the house to the resident sibling then I think that the questions in your original post may be moot.


 
She has spoken too 2 siblings and both have agreed too sell (well 1 approached the subject quite quickly looking to sell) so she discuses with the other who agreed too sell also.

My guessing sooner or later the other 2 will have too decide what they want too do with there share of the home once the sibling living in the house has a chat with them in due course.


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## ClubMan (27 May 2021)

Ok, but my other point about the mother's will needing to go to probate still stands and that could be the time to talk to the solicitor about putting any agreement to buy out the siblings' shares in the house on a formal footing.


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## Pinoy adventure (27 May 2021)

ClubMan said:


> Ok, but my other point about the mother's will needing to go to probate still stands and that could be the time to talk to the solicitor about putting any agreement to buy out the siblings' shares in the house on a formal footing.



Yes your correct on probate.i believe the gathering of information is ongoing.


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## Clamball (27 May 2021)

Who is the executor?  They need to be made aware of the sale of one fifth to a sibling.  It is all probably most straightforward if the solicitor doing probate organises everything.

The sibling either sells their share for (let’s say €50K) to the daughter or gives up their part of the inheritance in favour of the daughter and gets a gift of €50K from the daughter.  The solicitor can probably organise it in the most efficient and tax effective manner.  IANAL but putting the house into the ownership of the 5 siblings and then selling portions probably brings on stamp duty and 2 sets of transaction costs, but giving up the inheritance in favour of the daughter and the her gifting her sibling €50K probably means gift tax.  I am sure solicitors organise this type of thing all the time so will assist in the best way to proceed.  Handing over €50K cash now is probably not a good idea.  Probate takes time.

Are these the two siblings she is friendliest with or the two most difficult ones?  I would use the cash she has to deal with the most difficult ones first.


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## jpd (27 May 2021)

You can not disclaim your part of an inheritance in favour of a third party. 
If you disclaim your inheritance, it falls into the residue of the estate and it distributed according to the will.


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## Pinoy adventure (28 May 2021)

Clamball said:


> Who is the executor?  They need to be made aware of the sale of one fifth to a sibling.  It is all probably most straightforward if the solicitor doing probate organises everything.
> 
> The sibling either sells their share for (let’s say €50K) to the daughter or gives up their part of the inheritance in favour of the daughter and gets a gift of €50K from the daughter.  The solicitor can probably organise it in the most efficient and tax effective manner.  IANAL but putting the house into the ownership of the 5 siblings and then selling portions probably brings on stamp duty and 2 sets of transaction costs, but giving up the inheritance in favour of the daughter and the her gifting her sibling €50K probably means gift tax.  I am sure solicitors organise this type of thing all the time so will assist in the best way to proceed.  Handing over €50K cash now is probably not a good idea.  Probate takes time.
> 
> Are these the two siblings she is friendliest with or the two most difficult ones?  I would use the cash she has to deal with the most difficult ones first.



2 of the siblings are the executors and are fully aware & agree too the sale. The sibling who offered the quick cash sale was/is (well they thought she was the worst too deal with but turned out the easiest ) too deal with.

I don't think the gifting of let's say 50k would work as the Gift tax limit for siblings is €32,500 (well unless she added in the small gift €3000 per person per year ).

The person living in the house is getting is due too get legal advise as the best way too proceed.


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## Brendan Burgess (28 May 2021)

So where do they all stand at the moment? 
1) Is it agreed that the price/value is €300k ? 
2) Is it agreed that the occupant can buy it at that price? 
3) What is actually agreed and what is in dispute? 

The best approach to any issue like this is to agree what you want amongst yourselves and then tell a solicitor to  implement it. 

If you do a side deal with one sibling, the others may resent it.

If you go to a solicitor now to find out the best way to proceed, there is a real risk that a gung-ho solicitor will fire off a legal letter and force everyone into a fixed position.



Brendan


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## Pinoy adventure (28 May 2021)

Brendan Burgess said:


> So where do they all stand at the moment?
> 1) Is it agreed that the price/value is €300k ?
> 2) Is it agreed that the occupant can buy it at that price?
> 3) What is actually agreed and what is in dispute?
> ...



#1 they will get a estate agent too put a value on the property (letting the EA know that 1 sibling wants too buy the others out & keep it in the family ) 

#2 once value is put on it by the EA they will then begin the horse trading. Let's say it's 300k that's 60k a head so I would guess offers in the region of 40-45k would be made for each of the shares,with a bit of horse trading this may raise too 50k a share but won't go much beyond that figure going by house prices on the likes of daft etc 

#3 nothing is agreed and nothing is in dispute,they are just in the talking stage too see what everybody thinks of the idea.


The deal will be the same for all parties,price put on house by EA,split 5 ways and offers made in respect of the 4 who hold 20% each.once figures are agreed amoung all parties they will get a solicitor involved too proceed with the sale of the house and probate of the will.


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## Bilbo1 (28 May 2021)

Would it make more sense to pay for a valuator, who will look at recent house sales in the area, rather than a state agent who has a vested interest to get the highest possible price?


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## Pinoy adventure (28 May 2021)

Bilbo1 said:


> Would it make more sense to pay for a valuator, who will look at recent house sales in the area, rather than a state agent who has a vested interest to get the highest possible price?



Yes you could be correct.i though the estate agents puts a value on property.
The situation would be clearly explained too whom ever it is doing the valuation.


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## Brendan Burgess (28 May 2021)

Pinoy adventure said:


> #2 once value is put on it by the EA they will then begin the horse trading.



Just thinking about this.

If you get someone to value the house on behalf of the 5 of you for the purposes of a deal, then that value should stand.  There should be no horse trading. 

If you are going to horse trade, then you don't need a valuer. Make an offer and see what happens.

The alternative is that the buyer appoints a valuer for themselves to negotiate with a valuer for the sellers.

Brendan


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## Pinoy adventure (28 May 2021)

Brendan thanks once again for your input.If they did choose the horse trading way and made an offer (slightly under the rough market price as nobody wants too short change anybody )how would it work ? 
Would it matter too revenue if the house was undersold or sold undervalued too 1 of the siblings ? Would revenue see that as a gift ? 

What I'm thinking is if a value of between 250k (being cheap) and 300k (being about right) would there be any concern with revenue if they sold there 80% share for €180 k when it could easily reach €200k or more on the open market ? 

Thanks again


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## Brendan Burgess (28 May 2021)

Revenue is not interested in small differences like that. They genuinely have higher priorities to deal with.

The executors have to get a valuation at the date of death ( I think). 

A subsequent transaction 20% more or less than that is unlikely to be of any concern to Revenue.

If you value it for Probate at €100k and sell it 6 months later for €300k, Revenue might be interested.

Brendan


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## ClubMan (29 May 2021)

Bilbo1 said:


> Would it make more sense to pay for a valuator, who will look at recent house sales in the area, rather than a state agent who has a vested interest to get the highest possible price?


An estate agent will give a low or high valuation (within reason) depending on your needs.

Even apart from any potential agreement between the siblings to allow the resident sibling to buy them out, the house is almost certainly going to have to be valued for probate anyway so there's almost certainly no choice about doing this.


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## ClubMan (29 May 2021)

Brendan Burgess said:


> The executors have to get a valuation at the date of death ( I think).


That's correct.


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## SPC100 (30 May 2021)

I know it's not your direct question. But, how did the family look after the carer? From the details here it seems the carer got a raw deal. I think you said they lived in the house paid all bills and cared.

Fair deal would have eaten a significant amount.

Paid home help costs money.


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## Pinoy adventure (30 May 2021)

SPC100 said:


> I know it's not your direct question. But, how did the family look after the carer? From the details here it seems the carer got a raw deal. I think you said they lived in the house paid all bills and cared.
> 
> Fair deal would have eaten a significant amount.
> 
> Paid home help costs money.



The siblings didn't treat her well tbh and that caused a bit of friction within the family.
There was zero help with the up keep of the family home amoung the siblings.the kinda took the mickey over the last couple of years.

The mother got I think 2hrs of home help 5 days a week but no help from siblings.


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## Sue Ellen (30 May 2021)

SPC100 said:


> I know it's not your direct question. But, how did the family look after the carer? From the details here it seems the carer got a raw deal. I think you said they lived in the house paid all bills and cared.
> 
> Fair deal would have eaten a significant amount.
> 
> Paid home help costs money.



and took a break of 4 years in their career and now has to secure a new job straight after Covid.  As mentioned in a previous post she also paid for the groceries.  She did receive carer's allowance but that would still pale into insignificance when compared as you say to either Fair Deal or if they had to pay for further home help hours.


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## SPC100 (31 May 2021)

Carer got free accommodation but also paid for all utilities and groceries bills. I would call that about even. (They get free accommodation but didn't have full freedom in the accommodation, and paid bills).


on the caring front. I don't know actual costs or hours the sibling was available. But imo it is probably worth min 12k per month. And likely more like 20. So rather than low balling offers id prefer to see min 50-80 coming off the total inheritance of the other siblings.

I see that as the minimum.
if the parent was difficult, even more
if nobody else wanted to do it even more
if they had good earning potential even more.


The person presumably did benefit from a closer relationship with their parent, and hopefully good memories and bonding and insight into life. But given the alternative costs and it being strangers I feel like 50-80 is the minimum deserved.

Is careers allowance about 250p.w.?

I accept it might be very hard and full of friction to come agreement on that though.


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## Sue Ellen (31 May 2021)

SPC100 said:


> I accept it might be very hard and full of friction to come agreement on that though.



The extremely annoying part of this arrangement though is that the siblings despite having, as we can all see quite clearly, taken advantage of this person, they would appear not be giving any reduction in the current market value whilst at the same time laying down the law.




Pinoy adventure said:


> Most of the siblings would like too keep the family home within the family (this part can become tricky once money/feelings are involved).


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## peemac (3 Jun 2021)

There is a simpler way.

Let's say they agree €50,000 each - the sibling they get on with could get this across the line.

Person has circa 160k, but needs a buffer.

So €35k immediate payment and €180/month to each of the 4 from Jan 1st 2022 for 7 years. (1% interest)

Avoids banks and credit union, keeps house in family and in a way gives a bit of thanks to the person who cared for the mother and mend some of the broken bridges


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