Family home inheritance question

Courtesy Flush

I hope this is the right forum for my question

My elderly father in law is currently living alone in the family home in South County Dublin and is becoming quite incapacitated. The house is old and large and is not ideally suited to his needs but he is insistent on staying there. My wife would like to move back home to care for her father so we are proposing that we sell our own house, which is bcomming too small anyway for our 3 kids and move back and care for her father, which he seems happy enough about. My wife has two brothers who also live in Dublin and do their share for their father, staying with him as much as possible but cannot offer the full time care he is starting to require. The house is willed equally among the three siblings
Obviously my father in law would be getting full time care he needs and we would be benefitting from having a much bigger house for the kids.

My question is, will we be compelled to leave the home if my father in law passes so the will can be executed? This could be a year from now or 15 years who can say but there is no other arangement between the siblings in this regard

camphor

Courtesy Flush wrote: »

My question is, will we be compelled to leave the home if my father in law passes so the will can be executed? This could be a year from now or 15 years who can say but there is no other arangement between the siblings in this regard

It is up to your wife's siblings. You could buy them out. Alternatively you could swap houses with your father in law and he could will your present house to the siblings so you can stay on in his present house after his death.

amen

Alternatively you could swap houses with your father in law and he could will your present house to the siblings so you can stay on in his present house after his death.

Could there be a capital gains issue here ?

What happens if the ops house is worth less then the ops fathers house?
Could the siblings chase the op for the difference in that the op got a bigger equal share?

camphor

amen wrote: »

Could there be a capital gains issue here ?

What happens if the ops house is worth less then the ops fathers house?

The price difference would be a gift or it could be done at the will stage so it would be an inheritance. The o/p's father in law would change to will to read that the ops wife gets the house subject to transferring her own house to her siblings.

amen wrote: »

Could the siblings chase the op for the difference in that the op got a bigger equal share?

They can only insist on getting what they are entitled to from the will which will have to change if the o/p and his father in law made an arrangement.

Courtesy Flush

camphor wrote: »

It is up to your wife's siblings. You could buy them out. Alternatively you could swap houses with your father in law and he could will your present house to the siblings so you can stay on in his present house after his death.

Thanks for the advice
To be honest the value of father in laws house would be far above our own current house. I guess when the time comes we will have to either buy out the other two (unlikely) or more likely that father in laws house be liquidated and divided up

Gatling

What do the other siblings actually think on the subject ,
I'd personally be worried if similar happens with my family and the parents home ,ie an inlaw making a suggestion of setting up the plan mentioned where your dads/inlaw house then becomes your family home ,

Op not that your actually thinking like that I've read various and seen similar situations on here and off line that cause riots

Courtesy Flush

Gatling wrote: »

What do the other siblings actually think on the subject ,
I'd personally be worried if similar happens with my family and the parents home ,ie an inlaw making a suggestion of setting up the plan mentioned where your dads/inlaw house then becomes your family home ,

Op not that your actually thinking like that I've read various and seen similar situations on here and off line that cause riots

Just to be clear I am not making this suggestion at all, it is my wifes wishes to look after her father and avoid him going into care, I am just asking about what the future implications may be
In regard to the other siblings ... they dont have an issue with our family moving in to look after their father while he is alive. But obviously the house is partly their inheritance too
Perhaps some sort of legal advice is needed, maybe an agreement between all parties to avoid problems later on ?

Synyster Shadow

Would the sale of your own house be worth 2 thirds of your father in laws house? If it was then ye move to that house signing your to the father in law and only her siblings would get money from your old home. She will have gotten her share by gettin the family home. But I'd make sure it was sorted before selling and moving. Specially with kids anything can happen

camphor

The whole situation is risky. You don't know what state the market will be in when FIL dies. You don't know what your accommodation needs will be when FIL dies. You don't know if he will need full time care in a nursing home at some stage nor for how long such care might be needed. The FIL may need to go into the Fare Deal scheme or some other means of releasing equity.
The least risky option would be to rent out your own house and move in with FIL. At least there is somewhere to go if you have to leave FILs house. There may be CGT implications if you eventually sell your own house but at least there owuld be some security. It would be disastrous if you sold your house, spent the money, maybe on improving FIL's house only for you to be turfed out of FIls house with nothing at siome stage.

barman linen

This could be very tricky down the line and you may not be getting the other sibling's real point of view while their father is alive.

To be fair to all I think you should draw up an agreement that you will buy out the other two siblings at market value when FIL passes on.

In the meantime you should be planning to save/invest the proceeds of your current home to build to a sum to pay off the siblings.

You will benefit from 'free rent' during the period your FIL is alive so this should be added to the capital sum to ensure you have the funds available to buy out the siblings.

If you cant get to 2/3 value at the time then it should be reasonably simple to take a mortgage on the FIL house to supplement the proceeds you have built up.

Far better to make the agreement now - even putting the funds in escrow - rather than come to the inevitable row that could build up.

Best of luck....

Gatling

Courtesy Flush wrote: »

Just to be clear I am not making this suggestion at all, it is my wifes wishes to look after her father and avoid him going into care, I am just asking about what the future implications may be
In regard to the other siblings ... they dont have an issue with our family moving in to look after their father while he is alive. But obviously the house is partly their inheritance too
Perhaps some sort of legal advice is needed, maybe an agreement between all parties to avoid problems later on ?

No no wasn't suggesting that you were as a lot of people find out when an inheritance is on the line what may seem a great gesture of good will on the behalf of your wife and yourself (which I hugely respect) at the time could turn nasty and bitter depending on the other siblings when ever in the future your father in law passes ,

If i remember correct a similar thread possibly on this forum a farm had been inherited by several family members now a cousin who helped on the farm for a number of years was gifted a plot of land for a house or given a house on the land to live as a thank you ,everyone happy at some stage wife of one sibling comes along and decides she either wants rent or the cousin out so she can sell the house or land with her husband consent ,
If the above is true it shows how things can change rather quick when it comes to inherited land /property

Courtesy Flush

Gatling wrote: »

No no wasn't suggesting that you were as a lot of people find out when an inheritance is on the line what may seem a great gesture of good will on the behalf of your wife and yourself (which I hugely respect) at the time could turn nasty and bitter depending on the other siblings when ever in the future your father in law passes ,

If i remember correct a similar thread possibly on this forum a farm had been inherited by several family members now a cousin who helped on the farm for a number of years was gifted a plot of land for a house or given a house on the land to live as a thank you ,everyone happy at some stage wife of one sibling comes along and decides she either wants rent or the cousin out so she can sell the house or land with her husband consent ,
If the above is true it shows how things can change rather quick when it comes to inherited land /property

No worries. I totally understand what you mean regarding the rows that can take place over inheritance and land, its a real shame. Hoping to avoid such similar problems !

Courtesy Flush

camphor wrote: »

The whole situation is risky. You don't know what state the market will be in when FIL dies. You don't know what your accommodation needs will be when FIL dies. You don't know if he will need full time care in a nursing home at some stage nor for how long such care might be needed. The FIL may need to go into the Fare Deal scheme or some other means of releasing equity.
The least risky option would be to rent out your own house and move in with FIL. At least there is somewhere to go if you have to leave FILs house. There may be CGT implications if you eventually sell your own house but at least there owuld be some security. It would be disastrous if you sold your house, spent the money, maybe on improving FIL's house only for you to be turfed out of FIls house with nothing at siome stage.

This does seem to make the most sense. As you said there are so many unknowns in this situation and we wont own the FIL house outright at any stage unless at some stage in the future we can afford to buy them out

huskerdu

Courtesy Flush wrote: »

This does seem to make the most sense. As you said there are so many unknowns in this situation and we wont own the FIL house outright at any stage unless at some stage in the future we can afford to buy them out

I agree that selling your house would be a mistake as you could find yourself with no home for a number of reasons in the future.

The answer to your original question
"will we be compelled to leave the home if my father in law passes so the will can be executed? ", the answer is yes, you possibly will.

Also, if any member of your in-laws did get upset that you were trying to get the house and do them out of an inheritance, the fact that you had sold your home would potentially inflame this as it might sound as if you have no intention of leaving your FILs house when he dies as you have no other house.

Pro Hoc Vice

The simple solution is to sell your own house, and use that money to but 2/3 share in FIL's house, on the basis the FIL gifts the remaining 1/3 share. The FIL can then either keep the cash or gift the remaing children. Of course this is on the basis that all siblings agree.

Courtesy Flush

infosys wrote: »

The simple solution is to sell your own house, and use that money to but 2/3 share in FIL's house, on the basis the FIL gifts the remaining 1/3 share. The FIL can then either keep the cash or gift the remaing children. Of course this is on the basis that all siblings agree.

To be honest the sale of our house, after CGT and expenses would not be close to buying out the shares in FIL's house

Pro Hoc Vice

Courtesy Flush wrote: »

To be honest the sale of our house, after CGT and expenses would not be close to buying out the shares in FIL's house

There is no CGT on the sale of principle private residence, there is also the option of mortgage. Or another option is you FIL to give 1/3 share of the house to each child with a life estate to your wife. To do this correctly all siblings need to sit down and come up with a solution they all agree on.

Courtesy Flush

infosys wrote: »

There is no CGT on the sale of principle private residence, there is also the option of mortgage. Or another option is you FIL to give 1/3 share of the house to each child with a life estate to your wife. To do this correctly all siblings need to sit down and come up with a solution they all agree on.

So does this mean that each child would own 1/3 of the house but my wife would have a lifetime right to live there, without actually owning the house ?

Pro Hoc Vice

Courtesy Flush wrote: »

So does this mean that each child would own 1/3 of the house but my wife would have a lifetime right to live there, without actually owning the house ?

Yes, if all siblings agreed and it was draw up correctly with proper legal advice for everyone that's exactly what it means.

jackthetrader

Slight variation on this but what would happen in a situation where a parent died and there are 2 children, who both inherit the house. One child lives in the house and the other doesnt, has a family home elsewhere. The child who lives in the house wants to stay there, the other wants to sell the house to release the monetary value that can be divided up equally. If they both own it equally can one compel the other to sell, or not ?

Pro Hoc Vice

jackthetrader wrote: »

Slight variation on this but what would happen in a situation where a parent died and there are 2 children, who both inherit the house. One child lives in the house and the other doesnt, has a family home elsewhere. The child who lives in the house wants to stay there, the other wants to sell the house to release the monetary value that can be divided up equally. If they both own it equally can one compel the other to sell, or not ?

One can try, the courts would decide.

jackthetrader

infosys wrote: »

One can try, the courts would decide.

Forgive my ignorance but how would the court decide this and what factors would come into play. Assuming this situation happens often in reality

Pro Hoc Vice

jackthetrader wrote: »

Forgive my ignorance but how would the court decide this and what factors would come into play. Assuming this situation happens often in reality

The way the courts would decide any other division of property issue. The courts do this everyday in divorce situations, so why not between siblings. The courts will look at the relevant strengths of each party at an extreme take the following example.

Mr. A has two children Bill and Bob, bob is a little slow, has lived at home all his life and his only income is social welfare. His brother bill has been to university and has a very good job, paying him very well, he lives in a nice house with his family and is very comfortable. The house is worth €40k after sales costs, so €20k each. It is proven that it would be difficult to buy a suitable house for bob for €20k.

But each case must stand on its own facts.

Courtesy Flush

^
Thats interesting and I can see why each case would merrit its own facts to base on

You could equally say in the above example that Mr A leaves his house to two sons. Bill has gone to university , done well and has a good job, he has a mortgage to pay and a family. Bob has always lived at home, is not slow, just lazy and on the welfare. Its perhaps unfair that a court would award Bob the house on that basis

camphor

infosys wrote: »

The way the courts would decide any other division of property issue. The courts do this everyday in divorce situations, so why not between siblings. The courts will look at the relevant strengths of each party at an extreme take the following example.

Mr. A has two children Bill and Bob, bob is a little slow, has lived at home all his life and his only income is social welfare. His brother bill has been to university and has a very good job, paying him very well, he lives in a nice house with his family and is very comfortable. The house is worth €40k after sales costs, so €20k each. It is proven that it would be difficult to buy a suitable house for bob for €20k.

But each case must stand on its own facts.

This can only happen in a section 117 case. Normally the courts just enforce the terms of the will. In a successful section 117 the costs would come from the estate so the house could end up being sold to pay the legal bills. The division of assets in an estate is completely different to the division of assets in a separation or divorce case.

The o/p in this case should not contemplate selling his house and relying on a potential Section 117 application to house him in the future.
In any case what if the FIL has to go into a nursing home and sell the house to pay his medical bills? The estate could well be insolvent when he dies and there will be no assets to divvy up.

Pro Hoc Vice

camphor wrote: »

This can only happen in a section 117 case. Normally the courts just enforce the terms of the will. In a successful section 117 the costs would come from the estate so the house could end up being sold to pay the legal bills. The division of assets in an estate is completely different to the division of assets in a separation or divorce case.

The o/p in this case should not contemplate selling his house and relying on a potential Section 117 application to house him in the future.
In any case what if the FIL has to go into a nursing home and sell the house to pay his medical bills? The estate could well be insolvent when he dies and there will be no assets to divvy up.

No it can also happen where bill and bob own the house in equal share, say given a gift 10 years earlier, then one brother can seek to force the sale if they can't agree. No where in my example did I say the brothers inherited the house so s117 would not apply.

If the father now gifts, or sells the property there is nothing to inherit, and sorts out the issues now rather than later.

Courtesy Flush

camphor wrote: »

This can only happen in a section 117 case. Normally the courts just enforce the terms of the will. In a successful section 117 the costs would come from the estate so the house could end up being sold to pay the legal bills. The division of assets in an estate is completely different to the division of assets in a separation or divorce case.

The o/p in this case should not contemplate selling his house and relying on a potential Section 117 application to house him in the future.
In any case what if the FIL has to go into a nursing home and sell the house to pay his medical bills? The estate could well be insolvent when he dies and there will be no assets to divvy up.

In the scenario where Bill and Bob inherit the house. The court will enforce the terms of the will ie: divide the house up equally. As a house cannot be divided in two, I assume that means liquidating it ?

camphor

infosys wrote: »

No it can also happen where bill and bob own the house in equal share, say given a gift 10 years earlier, then one brother can seek to force the sale if they can't agree. No where in my example did I say the brothers inherited the house so s117 would not apply.

If the father now gifts, or sells the property there is nothing to inherit, and sorts out the issues now rather than later.

If there is a gift there is no question whatsoever of the courts having any discretion. Your example is straight from a S117 scenario. One co-owner can force a sale. It used to be done in a partition suit, now replaced by the Land & Conveyancing Act 2009. The FIL may not be happy gifting a house while he is alive either. If he needs his equity for medical care or sheltered housing he won't want to find his children unwilling to stump up.

Pro Hoc Vice

camphor wrote: »

If there is a gift there is no question whatsoever of the courts having any discretion. Your example is straight from a S117 scenario. One co-owner can force a sale. It used to be done in a partition suit, now replaced by the Land & Conveyancing Act 2009. The FIL may not be happy gifting a house while he is alive either. If he needs his equity for medical care or sheltered housing he won't want to find his children unwilling to stump up.

Read the question I was answering, that gives context to my answer. The person asked a question off topic, which was if two people own a house equally, can one of them force a sale, I said yes but it would be fact specific. I gave a outlandish example of where a court may not force a partition and sale. That is all it was a out there example.

Back on the OP, In relation to the father not waiting to gift the house now because if future medical care or sheltered housing, the sheltered housing would be provided by the OP medical care in ireland there is a scheme for such care, if the father has no assets then no issue, if father retains home then only a certain % can be lost due to long term care needs. But of course proper legal and financial advice should be got.

camphor

infosys wrote: »

Read the question I was answering, that gives context to my answer. The person asked a question off topic, which was if two people own a house equally, can one of them force a sale, I said yes but it would be fact specific. I gave a outlandish example of where a court may not force a partition and sale. That is all it was a out there example.

You gave an outlandish example and a result which has no basis in law. The courts do not inquire in a partition suit as to the relative strengths of the parties. can you cite a single reported case where this has been done or attempted to be done? The relative strengths are only considered in a S117.

infosys wrote: »

Back on the OP, In relation to the father not waiting to gift the house now because if future medical care or sheltered housing, the sheltered housing would be provided by the OP medical care in ireland there is a scheme for such care, if the father has no assets then no issue, if father retains home then only a certain % can be lost due to long term care needs. But of course proper legal and financial advice should be got.

Schemes can disappear. just because there is a scheme now does not mean there will be one in 5 or 10 years time. Many elderly people have lost medical cards in the last 5 years. Many are paying household taxes which did not exist 5 years ago. many have had their pensions cut.
The o/p needs to be sensible. He can't afford to buy out the BIls. He cant count on a share of the FIL's house until FIL dies and the estate is distributed. He would be quite foolish imo not to have the security of having a house of his own.

Pro Hoc Vice

camphor wrote: »

You gave an outlandish example and a result which has no basis in law. The courts do not inquire in a partition suit as to the relative strengths of the parties. can you cite a single reported case where this has been done or attempted to be done? The relative strengths are only considered in a S117.

Schemes can disappear. just because there is a scheme now does not mean there will be one in 5 or 10 years time. Many elderly people have lost medical cards in the last 5 years. Many are paying household taxes which did not exist 5 years ago. many have had their pensions cut.
The o/p needs to be sensible. He can't afford to buy out the BIls. He cant count on a share of the FIL's house until FIL dies and the estate is distributed. He would be quite foolish imo not to have the security of having a house of his own.

If you read I never said the court would refuse a partition suit, I only gave an outlandish example where the court may. It was an off topic issue. The person asked can a person be forced to to sell I said yes, the person asked what would the court consider I gave a example of things that might weigh on its mind. It was no more than a throw away comment on a question.

Yes I agree that schemes can be withdrawn, hence why I said they OP and the other siblings and FIL should take legal and Financial advice. Any solution will have its good and bad points.