Inheriting house together with sibling...who wants to move in - WWYD?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sibling needs to buy you out, but at a good deal. Maybe not market. At least half of what parents bought it for, adjusted for inflation, plus half of what money parents put in.

Why not at market? Why should A lose money on the deal?

I agree with other PPs, if B can't fully buy out A, then they should sell. The only compromise I would possibly consider is to allow B to pay A rent (half of market value) for a period of time (2 years) to save money to buy.

Technically, she is not losing money on the deal. She did not put money into the house and has no sunk costs. It is all windfall for her (taxes is another issue). So she has not lost money but perhaps would not make as much money off the house as she could have.

If it were me, I might let sibling have the house if I could get similar value from other parts of the inheritance. For example, Sibling could have the house if I got a bigger chunk of the other parts of the estate - hopefully cash or annuity

This approach makes sense if it is possible. If the parents meant for the estate to be split into even parts, then that's what should happen. If it was a case where one sibling was in financial distress and the others were well off, I'd be sympathetic to providing for that needy sibling (unless all the money would go for drugs or gambling). But in this case, I think it would be strange to just give an expensive house to a sibling.

Do people bother reading OP's posts? The rest of the estate is not worth anything close to the house.

Pro-tip - if a person begins a sentence with "If it were me," that is a pretty good clue that the rest of the sentence is hypothetical. But since I was not clear, let me edit "If it were me, I might let sibling have the house ONLY if I could get similar value from other parts of the inheritance." Here, as you point out, that value will not be coming from the rest of the estate. So....in my hypothetical, Sibling does not get the house.

[Anonymous]

OP, your sister will still inherit 1.5 million or so with the sale of the house. That is enough to buy a really nice house anywhere she wants, cash down, no mortgage, so she can still send her future (imagined) kids to private school. Seriously, that, in and of itself, is really amazing. The fact that she "has" to have a 3 million $ house instead of a 1.5 one doesn't make the second scenario any less attractive. Sure, a 3 mil house is better, bigger and nicer than a 1.5 mil house but a 1.5 mil house is still pretty great, especially for a 20 something, single person without a high paying job.

[Anonymous]

OP - If there are trusts with substantial assets, sister B may have access to some very low cost finance depending on the terms of the trust that could be used to buy Sister A out.

If sister B proposes a private mortgage, be very careful. Assuming Sister A is not willing to foreclose on Sister B and family, then it isn't a mortgage, it's a unsecured loan.