When the estate breaks the family

[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.

[Anonymous]

Anonymous wrote:What was the agreement when your parents gave the sibling the money? Was it a gift? Loan?

The estate is on the deed. It was a co-ownership of the house.

[Anonymous]

The current value of the house is half the House Sibling’s, half the estate’s. So if the house was bought for $1 million and your parents contributed $500,000 toward that price, the estate’s share is now $1 million. The House Sibling gets an equal share of that estate amount, so if there are three siblings, the House Sibling gets $1.333 million and each of the other two siblings gets $333,000. That’s what’s fair. The parents obviously meant for half the value of the house to become part of the estate, or they would’ve handled the whole thing very differently and they would have invested that $500,000 or whatever it is and some other way that would have increased in over time as an investment.

If there’s some wrinkle like capital improvements (ex. House Sibling put in $100,000 for renovations, which in turn increased the house value), House Sibling should be reimbursed for that.

Why does House Sibling think the other two should just sign away their share of the house?

[Anonymous]

Greed and a sense they can wear the others down, probably, PP.

[Anonymous]

Maybe House Sibling is way overextended and freaking out that they aren’t able to buy out the estate right now, high earning or not. Can the other sibs work out some kind of payment plan, keeping up with market interest rates?

But definitely don’t let them bully tens/hundreds of thousands of dollars out of your hands that are rightfully yours!

[Anonymous]

Why do people write these posts without complete sentences? Your post is too hard to follow.

[Anonymous]

Anonymous wrote: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.

This. I would just follow the law.

[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

[Anonymous]

Current value shouldn’t matter. David the amount of the original loan (if it was a loan) by the number of sibling shares. Subtract the one share for the sibling that lives there from this amount. The remaining share amount is the value to be covered by liquidated estate assets. For example if they paid 100k then in order for the sibling living in the house to inherit $$ the estate needs to be paying over $75k per sibling.

[Anonymous]

Sorry OP back here. We have plenty of lawyers now and in creating this mess including one parent (set up will and trust), siblings and spouses of siblings. Other real estate was part of will which was either directly addressed in will or has been sold.

The entire estate can't be closed out until agreement is reached on what to do with the home. The sibling residing in the home has rejected all offers to settle including owning the house outright but not getting share of the cash (equity in home is 5x what split cash would be). They are demanding home outright and equal split of cash. This has infuriated some of the siblings so to partition we go.

We actually used to all be very close.

Hot mess. It is a good reminder to all that making one of your kids your executor could be a terrible move.

[Anonymous]

Anonymous wrote:Sorry OP back here. We have plenty of lawyers now and in creating this mess including one parent (set up will and trust), siblings and spouses of siblings. Other real estate was part of will which was either directly addressed in will or has been sold.

The entire estate can't be closed out until agreement is reached on what to do with the home. The sibling residing in the home has rejected all offers to settle including owning the house outright but not getting share of the cash (equity in home is 5x what split cash would be). They are demanding home outright and equal split of cash. This has infuriated some of the siblings so to partition we go.

We actually used to all be very close.

Hot mess. It is a good reminder to all that making one of your kids your executor could be a terrible move.

Settle with how ever much the parents gave to that child for the house and then each sibling gets 1/2 that amount from the estate and then everything else is divided. If they don't agree to that let a judge decide.