Implications of allowing brother to remain in Family home after Mother's passing

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Cath Ann

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Mother (88yrs) (father deceased) has a Will splitting her estate equally between me and my two siblings (all in our 50's) and states the house is to be sold. My brother (unmarried, no dependants) currently lives with her and is her carer. He wants to continue to live there after Mum's passing and is willing to allow the remaining liquid assets to be split between me and my sister. The house is worth half the estate (€500k, no mortgage), he has insufficient savings to buy out the house but could offer a few thousand only (he is not working and is on disability). Mum thinks he won't look after the house properly and should live in an apartment (but she might possibly listen to a rational to allow him to stay) . My sister and I are considering allowing him to reside there til his death as he has been a devoted carer and is upset about having to move out. The psoblme is to release to remaining liquid assets.

1/ After Mum's passing, if brother remains living there without us selling the house will The Probate Office release the liquid assets? Or will they insist the house is sold first? I am sole executor , is it permissable for me to split these assets any way I see fit? This liquid asset split would not bring me or sis over the inheritance threshold.

2/ Should brother make a will whereby he agrees to leave his share of the house to me ad my sister /our estate(s)? Or can he just simply stay there with no legal doc.

3/ If all assets are tied up until the house is sold should we suggest to Mum a rewording of the Will so he can stay there include a split the liquid assets just between me and sister?

4/ Should I get Tax advice or Inheritance advice on this and where to source the right advisor please?

Thank you
 
IANAL & I think you need advice so that you all get what you want.

Something along the lines that the house is left solely to siblings a & b, with a life interest & sole residency to sibling c.

The remaining cash assets to be divided as your parent wishes.

To be honest however, this board is full of posts where these arrangements fell apart & caused untold grief.

Selling everything is the cleanest solution.
 
Just to be clear, the Probate Office doesn't hold or release any assets. The assets are gathered and distributed to the beneficiaries by the executor(s). The Probate Office's role is to ensure all the necessary documents are lodged correctly and then they issue the actual grant. After the issue they don't have any role in the actual distribution.

Secondly arrangements are routinely made between beneficiaries during estate administration that adhere to the letter while departing from the spirit of the will. Including in my own mother's estate where my siblings were quite generous to me.

It's important to note that "sold" doesn't necessarily mean "sold at the best obtainable price on the open market". In the current housing crisis probably about half of the properties changing hands in my estate are Probate sales, with most of these being on the market at a reasonable but conservative price for about 3 minutes on a Tuesday morning before being purchased by a house-hunting relative. Which is fully compliant with a requirement in the will that a property be sold.

Assuming the estate is being equally split 3 ways you and your siblings could buy the house from the estate and your brother could continue to live there. It'd involve some legal shuffling but you and your sister would end up with €85k cash each and your brother the other €330k.

Or all 3 of you could buy the house from the estate, with your brother holding one sixth as joint tenant with each of you and your sister. This would effectively leave everyone with one third of the liquid assets.

There's a few other potential approaches that'd work too. You'd probably want to sit down when the time comes and work out exactly what way you want to do it. But it's certainly doable.

No real idea about tax.

- edit: it's true that selling all the assets and distributing is the cleanest solution, but life is messy and cleanest isn't necessarily the best. I'd consider the best solution is the one all three of you are happy with, no matter how untidy it is. It sounds like you all get on well and it's terrible (but common unfortunately) to see relationships fall apart over inheritances
- edit 2: no matter what you do in life there's a chance it'll go horribly wrong for you. Risk can't be eliminated just mitigated.
 
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Do you and your sister want or need 1/3 of the estate? It seems to me that if you are willing to wait until your brother dies before your 1/3 value works it way into you or your estates possession, then you don’t have a need. Your brother on the other hand does have a need for housing.

I am a firm believer that the dead should make their will as straightforward as possible so the unlikely scenario of you say dying tragically in the next 10 years and your brother living to be 100 would mean that the estate is not fully settled for another 30-40 years if you went with your option 2.

House€550K
Liquid Assets€550K
Total€1.1 mil
Inheritance€367K each

If the brother retains the house - the two daughters get €92K less than expected each from the will. And your brother essentially gets a gift of €183K from his siblings. He will have the house but no savings and a very small disposable income.

The simplest solution would be to get your mum to leave the house to your brother with everything else split 50:50 beaten the two daughters.

But as you say she has issues with that so the next simplest thing is have your brother “buy” the house from the estate. Your solicitor will advise you of the easiest, legally compliant method of doing this. Perhaps you and your sister relinquish your interest in the house or some other way. If you “give” him 92K then he has substantial group B gift tax liability, which he cannot afford as he has no cash.

Best of luck.
 
Cath Ann said:
Mother (88yrs) (father deceased) has a Will splitting her estate equally between me and my two siblings (all in our 50's) and states the house is to be sold. My brother (unmarried, no dependants) currently lives with her and is her carer.
Mum thinks he won't look after the house properly and should live in an apartment (but she might possibly listen to a rational to allow him to stay) . My sister and I are considering allowing him to reside there til his death as he has been a devoted carer and is upset about having to move out.
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It is your mother's estate to do with what she wishes. She is clearly trying to be fair to you all. She is also cognisant of the unique needs of her son the carer. Summed up as:

- his housing need, disability and incapability of managing a house

He wants to stay where he is (understandable but not wise, I would defer to your mother's experience of him here)

You the siblings want:

- your share, your brother to be ok, your mother to be happy

Based on what you've posted I would recommend that the family home be sold on death, that an apartment suitable to your brothers unique needs be purchased and he has a life interest in it. Then the balance to you his siblings on his death (and grandchildren in the event of your death - called child of a predeceased child).

If your brother is incapable of managing an apartment, and or money, than somehow some money should be set aside to pay him an income that will not affect his disability allowance, this money to be used to pay for a housekeeper/someone to oversee him.

There should also be a clause that if your brother ends up in residential care the house can be sold then.

Legal advice is urgently needed in order to make an informed decision on what to do.
 
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DannyBoyD said:
To be honest however, this board is full of posts where these arrangements fell apart & caused untold grief.

Selling everything is the cleanest solution.
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This board like others is for problem cases, we don't hear about the ones that worked out. My grandparent left a property to her incapable child as a life interest and to all her children equally, so the housing need was addressed, upon that child's death I along with my siblings (children of pre deceased child) inherited part of the house sale proceeds long after the death of my grandparent. (plus grandparents living children).

If planned correctly legally, with an eye on taxation and disability allowances there is no reason why this cannot be managed.
 
Hello,

Why not downsize, that way freeing some equity from the existing house, for distribution, while also providing for your brother?

The new property could be co-owned between the siblings, in an appropriate ratio.

As a rule, I'm against family arrangements, that result in some people being able to receive their inheritance, due to other family members. I've heard of far too many problems occur.

That said, I do appreciate that some people have certain long term care needs, or there are other special considerations.

Your brother only needs a one bedroom apartment, so that's what I would be considering.
 
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Cath Ann said:
My sister and I are considering allowing him to reside there til his death as he has been a devoted carer and is upset about having to move out.
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Do you think he’ll be upset to the point where he would refuse to move out or obstruct a sale?

The simplest thing is everything sold and a three-way split. But if you doubt that your brother will allow a sale you’ll have to be creative. Something advice further up the thread.

Bear in mind statistically if three siblings are in your 50s now there’s a good chance at least one of you will still be alive in 35 years.

Is this a situation you want to bequeath to the next generation? I doubt it. Personally I’m glad my deceased grandparents’ houses were sold immediately and proceeds divided equally.
 
You also need to consider the issue of CGT.

When probate is being applied for, you’ll have to provide an estimate of the value of the house. If there’s a value of say 500,000 at the time of probate application, CGT would be payable on any amount in excess of this that’s realised at the point of sale.

So if you hang on to the house for say 10 years and it increases in value by 400,000 you’ll have to pay CGT at 33% on the excess 400,000.
 
Cath Ann said:
My sister and I are considering allowing him to reside there til his death as he has been a devoted carer and is upset about having to move out
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None of us know you brother so all we are saying is speculative. But it would seem that he and your mother are very close. There will be a big emptiness in his life when she has gone. Are there friends and good neighbours around him and mum now? If he moves out of the area would he be losing more than the house? Given he is not working how will he develop a social life or a social network if he moves?

Another thing to consider is whether he might link up with a companion or partner in the future (as I say, purely speculative)? Is this something to consider if thinking about a lifetime right of residence? Or getting his own place?
 
Another tax related aspect to consider.

If your brother were to inherit the house in full he would not be liable for inheritance tax as he has resided in the house for several years and (presumably) does not own any other property.

However, if the full estate is split three ways and you subsequently “gift” him the 100,000 required to own the property outright, he would probably be liable to tax on this amount.

If the house is to be his therefore, it’s better that this be achieved through your mother’s will rather than through some subsequent arrangement.
 
Salvadore said:
.

However, if the full estate is split three ways and you subsequently “gift” him the 100,000 required to own the property outright, he would probably be liable to tax on this amount.

If the house is to be his therefore, it’s better that this be achieved through your mother’s will rather than through some subsequent arrangement.
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How sure are you that this is correct?

Wouldn't a Deed of Family Arrangement easily suffice here if the beneficiaries can agree to one?
 
Cath Ann said:
Mother (88yrs) (father deceased) has a Will splitting her estate equally between me and my two siblings (all in our 50's) and states the house is to be sold. My brother (unmarried, no dependants) currently lives with her and is her carer. He wants to continue to live there after Mum's passing and is willing to allow the remaining liquid assets to be split between me and my sister. The house is worth half the estate (€500k, no mortgage), he has insufficient savings to buy out the house but could offer a few thousand only (he is not working and is on disability). Mum thinks he won't look after the house properly and should live in an apartment (but she might possibly listen to a rational to allow him to stay) . My sister and I are considering allowing him to reside there til his death as he has been a devoted carer and is upset about having to move out. The psoblme is to release to remaining liquid assets.

1/ After Mum's passing, if brother remains living there without us selling the house will The Probate Office release the liquid assets? Or will they insist the house is sold first? I am sole executor , is it permissable for me to split these assets any way I see fit? This liquid asset split would not bring me or sis over the inheritance threshold.

2/ Should brother make a will whereby he agrees to leave his share of the house to me ad my sister /our estate(s)? Or can he just simply stay there with no legal doc.

3/ If all assets are tied up until the house is sold should we suggest to Mum a rewording of the Will so he can stay there include a split the liquid assets just between me and sister?

4/ Should I get Tax advice or Inheritance advice on this and where to source the right advisor please?

Thank you
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Technically the will is based on the intention and request of the deceased, not the whims and desires of those inheriting. I would feel you would be in a better position, both legally and otherwise, to respect the instruction that your mother gives in her will. If the will instructs that the house is to be sold, then the house should be sold.

That said, if your mother is still around and compus mentis, its also possible to change the will to address the problem that other posters above have posted with regard to means testing. If the house is half the estate, then he could inherit it, and everything else is split between your siblings.

Lastly, and this is another option mind, you can also have a 3 way split leaving your brother with 2/3 ownership of the house, with yourself and the other sibling retaining 1/6 each. Meaning that if he subsequently sells or dies you retain the 1/3 of the ownership whatever else he decides to do with the house. If he has nobody else it would end up being passed to you anyway.
 
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