Property sold to 2 siblings, 3rd sibling wants share

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delgirl

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A holiday home and land was sold by a father to 2 siblings, we'll call them Peter and Paul, in 1984 for €60,000, €30k each.

The house wasn't officially valued at the time, but was thought by the father to be worth in the region of €100,000. The transaction at the time was recorded as €60k sale price and the remaining value of the property, €40k, was noted in the transaction as a 'pre-inheritance'.

The 3rd sibling, Luke, wasn't asked if he wanted to buy a share in the property as he had no desire to use the property and always indicated that he had absolutely no interest in it.

Peter and Paul are the registered owners of the property and have looked after it for 30 years, paying insurance, maintenance fees, investing in repairs and renovation, taxes etc.

Paul now wishes to sell his half of the property to Peter, again it has not been officially valued, but he has agreed to accept €75,000.

The father is since deceased and the 3rd sibling Luke is now claiming that he has been deprived of part of his inheritance from his father as the house was sold to Peter and Paul for less than the market value with the remainder being classed as a 'pre-inheritance', even though there was no official valuation.

Luke now feels disgruntled that he wasn't asked if he wanted to buy a share in the property, although he knew that the transaction was taking place and gave no indication at the time that he would like to be included, and now wants to claim a 3rd of the current market value of the property.

Peter and Paul, the registered owners, while they are happy to pay Luke 'something' as they wish to continue to have a good relationship with him, do not feel that he is entitled to a 3rd of the current market value as he has not contributed in any way, physically or financially, towards the purchase and upkeep of the house or land (approx. 4 acres of grass and forest with annual thinning etc.).

Peter and Paul would like to settle the matter amicably without using solicitors or Luke taking the matter to Court.

If an official valuation is carried out and the value is set at e.g. €200,000, which is double what it was 30 years ago, would it be fair for Peter and Paul to calculate their purchase price of €30,000 + inflation + costs as their contribution?

Or should it be €200,000 less 30k each less costs?

What would be the fairest way to resolve the situation?
 
Straight off, what did P& P gain. A one third share for free. In this case 40K of value. It would seem then that that 40K share, at it's current value, should be between 3 brothers, as P & P bought, the other 2/3 share of 60K.

When the father died, did Luke get less than his siblings?

30 years would seem to me to bar Luke from any legal action. Offering something to him, might make him want more. I think it's a bit rich,someone who has known about a transaction for 30 years and agreed with it, now wanting a share of it. What triggered this? A marriage, a wife, a death, envy?

It would be nigh on impossible to prove the property was actually worth 100K 30 years ago. And that's only if the father's 'guess' was correct.

Anyone who hasn't acted for 30 years with full knowledge shouldn't be entitled to anything, in my opinion. Unless there was skulduggery.
 
The father's remaining estate, which comprised of 4 other properties and a substantial amount of cash was split evenly and amicably between the 3 siblings.

Only this holiday property which was 'sold' to Peter and Paul 30 years ago is the current bone of contention and, as there was no official valuation carried out, the actual value in 1984 is unknown and is not recorded or mentioned anywhere.
 
Luke has zero legal entitlement to anything.

Paul is likely to/possibly have a CGT liability on the sale.

The property needs to be valued now for CGT, CAT and stamp duty purposes.

Once that's been done, if there is money to spare and if either P or P want to give Luke a gift of some spare cash, let them do it.

Repeat: Luke has zero legal entitlement to anything.

mf
 
Did Luke receive anything else to compensate, stayed at home for free, education.

It would seem that the father was very fair, leaving everything to the siblings equally. But for some reason, in the mists of time, he did a property transaction with everybody's full knowledge and Luke should leave well enough alone.

If the father, who seems fair, thought otherwise, he would have left more to Luke.

Would Luke be seeking a share if it was in negative equity.
 
A rough calculation suggests 13,333 in 1984 is worth about 30,500 adjusting for inflation. This does not take into account any costs. A fair amount would be 15k but this could get really messy from a tax perspective quickly.
 
mf1 said:
Luke has zero legal entitlement to anything.

Paul is likely to/possibly have a CGT liability on the sale.

The property needs to be valued now for CGT, CAT and stamp duty purposes.

Once that's been done, if there is money to spare and if either P or P want to give Luke a gift of some spare cash, let them do it.

Repeat: Luke has zero legal entitlement to anything.

mf
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Thanks mf1, that's very clear.

Bronte said:
Did Luke receive anything else to compensate, stayed at home for free, education.
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He received help to start a business some 12 - 15 years ago. The amount was unknown, perhaps between €50 - 75k and it was never repaid.

Peter and Paul also received various 'loans', portions of which were repaid and the balance was gifted by the father.

No-one wants to drag up every Euro that was given to each of the siblings over the years to see who got more or less than the other. Definite can of worms! And as the 3 siblings are now in their 60's, they can't remember a lot of what went on 30 or 40 years ago!

The father was a very fair man and treated his children equally in every other way.

Bronte said:
Would Luke be seeking a share if it was in negative equity.
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Very good point, I doubt it.

kmick said:
A rough calculation suggests 13,333 in 1984 is worth about 30,500 adjusting for inflation. This does not take into account any costs. A fair amount would be 15k but this could get really messy from a tax perspective quickly.
Click to expand...
What formula have you used for this calculation? Is there a easy calculator online - had a quick look, but can't find one.

Thanks
 
My personal opinion is that all 3 siblings should draw a line under whatever happened in the past - they all got a substantial inheritance and are all financially very secure.

I don't see any reason to start dragging up 'perceived injustices' that happened 30 years ago which have the potential to damage or destroy their relationship with each other.

Were the father alive, he would be very upset with Luke for trying to stake a claim to a property in which he had absolutely no interest and potentially jeopardising his good relationship with his siblings for the sake of a small amount of money in terms of what he received from his father in his will.
 
"What formula have you used for this calculation? Is there a easy calculator online - had a quick look, but can't find one."

If brothers start using mathematical calculations, they are sort of validating Luke's claim. My advice is to just not go down that route.

I can understand how Luke gets thick, other brothers don't want to fall out, no-one wants to state the patently obvious and it's easier just to give him money. And because Luke wants his position validated, he wants his claim to be acknowledged and accepted as valid rather than as grubby grabbing.

Perhaps a neutral party could intervene?

mf
 
As MF1 has pointed out, Luke has no legal entitlement whatsoever. That is not to say that he could chance his arm claiming that the Executor should have adjusted for the fact that the sons got a gift 30 years ago. I presume that this would get nowhere. It should have been raised with the Executor. The sale of the house today is not relevant.

If I was asked to arbitrate on this issue, this would be my decision based on the information provided so far, and some assumptions.

1) Peter and Paul each received a gift of €20,000, 20 years ago.
2) It was understood, even if it was not written down anywhere, that this was an advance on their inheritance
3) In 2012, the father died leaving each sibling €300k.
4) The will did not take into account the fact that the sons had received an advance.
5) €20k 30 years ago is worth around €35k today. ( I found the CSO CPI very hard to follow, so if this decision is accepted, then the precise calculation would need to be done)

Recommendation
The father split €70k in two giving each person €35k
He should have split it in three, giving each person €23k in today's money.
Peter and Paul should give Luke €12,500 each.

Comments
The value of the property today is irrelevant. The father gave the sons gifts of €20k each 30 years ago.
 
Brendan Burgess said:
Recommendation
The father split €70k in two giving each person €35k
He should have split it in three, giving each person €23k in today's money.
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This is hardly for you to say, Brendan?

The man made a free & conscious decision to dispense his own money as he saw fit.

He later made a will, which specified how he wished his estate to be distributed.

There is no basis now to revisit or nullify either decision.

This type of scenario happens in practically every family.
 
Hi Tommy

This is the OP's actual words:

The transaction at the time was recorded as €60k sale price and the remaining value of the property, €40k, was noted in the transaction as a 'pre-inheritance'.
Click to expand...

I have seen parents giving children "an advance on their inheritance" in the past. The problem is that while it is discussed, it's not usually written down and can give rise to arguments years later.
 
So?

The existence of that transaction didn't bind or commit the father in any way to distribute the remainder of his assets, pre- or post-death, to his children in any particular fashion.

If his will didn't recognise or take account of the supposed "pre-inheritance" (which itself is an oxymoron, btw) its terms cannot legally be varied post-death to retrospectively recognise it.
 
I agree that there is no legal case.

And the father could have left his entire estate to one of the brothers.

But it seems as if they are happy to share it equally, so I have just shown how I would calculate it.
 
I think a lot depends on whether there was a will or not. If there was and it post-dated the transaction (and even if it didn't), it would help a lot - just follow what it says, as any other course of action is almost certain to lead to ongoing bad feeling by some or all of those involved.

If there isn't a will, someone would have to decide on what to do (what exactly does "noted on the transaction as a pre-inheritance" mean, by the way?), so some form of arbitration by an independent 3rd party would seem to be the best option. Get them to do any sums, if necessary. Getting one side to come up with something almost guarantees a confrontation, as would getting solicitors involved.
 
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