When the estate breaks the family

[Anonymous]

Anonymous wrote:I have to tell you, I wouldn’t care about this at all. If it’s a house that is the home of my sibling, but my parents helped pay for it, I would want to transfer it to them in the easiest way that satisfies the legal requirements of probate or whatever.

I don’t care at all about me and my siblings getting an equal inheritance. I think if people are at the point where they want someone to move to a new house over that, the family was already “broken.”

The sib does not need to move, they can buy out the estate's interest in the home at fair market value, following state law and/or the direction of the probate court, if agreement cannot be reached.

The parents did not just help pay, they are joint owners. That is the difference. It was not a gift at the time and ownership was never changed, thus the estate co-owns the property.

If the parents co-owned a business with a child or friend, would be analogous, interest would pass to estate and co-owner could buy out. Sib and spouse are high earners. They already benefitted by purchasing an interest in a property that they otherwise could not have afforded and that has appreciated. The parent did not gift that one sib the home. The sib is way out of line in demanding it now. They can reach an agreement or the court will direct disposition. It is them creating this situation and trying to subvert the will of the deceased.

[Anonymous]

Anonymous wrote:OP, get advice from a lawyer in the relevant state. Did the will address the house?

If not, and if agreement cannot be reached, partition may be the only answer.

I would personally not agree to a quit claim in this situation with an equal cash split. The house is a valuable asset of the estate.

Unfortunately the family relationships are likely permanently damaged no matter what. Your parent and the sib could have addressed this when the sib's financial situation changed, buying out and refinancing, but did not. Thus, it's part of your parent's estate. The sib can continue to live there but not without making the estate whole. How would it be fair for them to get an expensive gift posthumously that was not given when your parent was alive?

If this happened in my family and it seemed like it was meant to be a gift but they did it a weird way for whatever reason, I wouldn’t stress about the estate element. This just sounds like sloppy estate planning to me. It wouldn’t be worth going to war with my sibling over it.

Like unless the parents had told me at the time, “hey, we’re buying this house for your sister but we’re making sure it’s co-tenant so that when we die you get part of the equity” I wouldn’t be trying to fight about it, personally.

[Anonymous]

The family is already broken so may as well have the $ divided as parent wished. What the parent did not gift in life should not be extorted from their heirs after death. It was the parent's wish to be a part owner of the house and for assets to be divided equally. The sib can reach a fair agreement with the estate or sell. Probate puts some checks on the process.

That the sib would even demand this is beyond greedy. They already benefitted and rather than be grateful for that are willing to blow up the family despite being high earners. When people show you who they are, believe them.

[Anonymous]

So for easy math:
House Originally cost $500K
Parents paid $250K
If house sold now would sell for $1M
Parent invest worth $500K

Sibling who lives in the house wants the house not to be a part of the estate calculation (the $250 was a gift)

A sibling who does not live in the house thinks the $500K should be divided among all. (The logic being if the $ was not in the house, it would have been in another investment and grown anyway)

[Anonymous]

Anonymous wrote:So for easy math:
House Originally cost $500K
Parents paid $250K
If house sold now would sell for $1M
Parent invest worth $500K

Sibling who lives in the house wants the house not to be a part of the estate calculation (the $250 was a gift)

A sibling who does not live in the house thinks the $500K should be divided among all. (The logic being if the $ was not in the house, it would have been in another investment and grown anyway)

What do the other sibling think? What is the value of the rest of the estate? What, if anything, did the parents say about the initial gift/loan to all siblings?

[Anonymous]

Hire a good attorney letting all the siblings know in advance. If selling the house is an option, take it off the table because that will blow up with the sibling who lives there. There is a solution but you need an expert opinion. It will cost a decent amount of money but it will prevent a sibling war. Greed can be an awful thing and an attorney can help you avoid it. When my parents died two of my siblings were trustees and the rest of us said do what you think is fair and what you believe mom and dad wanted. There was never an argument.

[Anonymous]

Anonymous wrote:So for easy math:
House Originally cost $500K
Parents paid $250K
If house sold now would sell for $1M
Parent invest worth $500K

Sibling who lives in the house wants the house not to be a part of the estate calculation (the $250 was a gift)

A sibling who does not live in the house thinks the $500K should be divided among all. (The logic being if the $ was not in the house, it would have been in another investment and grown anyway)

If it was a gift the estate would not likely be a tenant in common. And, if it was a gift your parents would have filed a gift tax return even though a tax didn’t need to be paid.

[Anonymous]

Anonymous wrote:The law probably lays out how to deal with it. This is a property and estate law issue.

You guys should follow the law and the estate plan and the deed.

Consult a good estate attorney and follow what he advises.

If the sibling owns the house, he's under no obligation to gift you guys money from his share of liquid assets of inheritance.

If he doesn't own it, he needs to pay the estate for its share. Siblings are under no obligation to quit claim.

This is probably a simple legal issue. Figure out what the right legal answer is and follow it. No one needs to gift anyone anything on either side.

-Attorney

That’s correct. The law knows how to solve it and you need to follow the law. Does not sound like a lot of ambiguity is possible here. Do it at arms length and maintain your dignitity. Any sibling who gets angry is making their own choice to do so.

[Anonymous]

Anonymous wrote:I have to tell you, I wouldn’t care about this at all. If it’s a house that is the home of my sibling, but my parents helped pay for it, I would want to transfer it to them in the easiest way that satisfies the legal requirements of probate or whatever.

I don’t care at all about me and my siblings getting an equal inheritance. I think if people are at the point where they want someone to move to a new house over that, the family was already “broken.”

Strong disagree. The best way to handle this is to just follow the law. Even if it results in the sibling having to move.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, get advice from a lawyer in the relevant state. Did the will address the house?

If not, and if agreement cannot be reached, partition may be the only answer.

I would personally not agree to a quit claim in this situation with an equal cash split. The house is a valuable asset of the estate.

Unfortunately the family relationships are likely permanently damaged no matter what. Your parent and the sib could have addressed this when the sib's financial situation changed, buying out and refinancing, but did not. Thus, it's part of your parent's estate. The sib can continue to live there but not without making the estate whole. How would it be fair for them to get an expensive gift posthumously that was not given when your parent was alive?

If this happened in my family and it seemed like it was meant to be a gift but they did it a weird way for whatever reason, I wouldn’t stress about the estate element. This just sounds like sloppy estate planning to me. It wouldn’t be worth going to war with my sibling over it.

Like unless the parents had told me at the time, “hey, we’re buying this house for your sister but we’re making sure it’s co-tenant so that when we die you get part of the equity” I wouldn’t be trying to fight about it, personally.

Easy for you to say … especially if the siblings in the house are better off financially than the other siblings. It actually takes effort to get yourself on the deed as the tenant in common, more effort than just wiring the downpayment as a gift.

[Anonymous]

Anonymous wrote:So for easy math:
House Originally cost $500K
Parents paid $250K
If house sold now would sell for $1M
Parent invest worth $500K

Sibling who lives in the house wants the house not to be a part of the estate calculation (the $250 was a gift)

A sibling who does not live in the house thinks the $500K should be divided among all. (The logic being if the $ was not in the house, it would have been in another investment and grown anyway)

sure but it’s not “logic.” this isn’t some kind of logic puzzle or ethics connundrum. 50% of the house belongs to the estate and the law & will decide what happens to it.

[Anonymous]

Anonymous wrote:I reread your OP and it sounds like your parents did some weird stuff with the deed rather than gifting the down payment money outright.

That was their mistake.

Siblings should shut up and back off. If they wanted down payment help, they could have asked, too. They didn’t.

But clearly the “weird stuff with the deed” means that the parents didn’t think it would be fair to just gift that down payment money to that one sibling, in an inheritance context, no? Maybe there was an agreement that the sibling was supposed to eventually “pay it back” by buying out the estate’s share, and they never did it

[Anonymous]

What's written is all that's important. Written, documented, and legal. Opinions, guesses about intent --- none of that matters. None of that should be taken into consideration. The executor hires an estate attorney to determine the outcome. Legal is legal.

[Anonymous]

Anonymous wrote:I have to tell you, I wouldn’t care about this at all. If it’s a house that is the home of my sibling, but my parents helped pay for it, I would want to transfer it to them in the easiest way that satisfies the legal requirements of probate or whatever.

I don’t care at all about me and my siblings getting an equal inheritance. I think if people are at the point where they want someone to move to a new house over that, the family was already “broken.”

I agree that it’s sad that the other sibs want to force the sale of a family’s home to get their hands on a little bit more money. But the parents structured the ownership of the house the way they did, and it’s weird that the sib who lives in the house isn’t even willing to forego their share of the cash inheritance in exchange for getting to keep the house. Just seems so grasping. Maybe the best thing to do is everyone just wait it out until the sib eventually downsizes or otherwise decides they’d like to sell, and everyone gets their fair distribution then? Just thinking about it in terms of interpersonal fairness - I don’t pretend to know how this stuff works legally. So obviously yes consult an atty to see if there are any pitfalls and make sure sib doesn’t do anything dumb, like accidentally put a tax lien on the house or something.

[Anonymous]

The sib does not have to move, they can buy out the estate's interest and get a clear deed. Then that money goes into the kitty to be divided per the will or state law.

If they choose not to do so then a court may order the house sold and $ divided.

They are trying to get an equal share of cash plus 1/2 of their house free and clear. That is NOT what the parents intended.

Leaving the situation to linger for years helps no one.

OP, the estate needs to consult a lawyer.