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Living in old family home.

  • 24-05-2023 3:19pm
    Registered Users Posts: 1,668 ✭✭✭

    I'm looking for some clarity on an issue that has arisen and we are getting a different opinion on it with every solicitor we go to. Both parents are deceased.

    Sibling No.1 is living in their old childhood home after a divorce, with the consent Siblings No.2 + No.3 + No.4.

    Sibling No. 1 wishes to buyout both of their share of the old family home for a little less than market value and all parties are ok with that. The will states that the property is divided amongst the siblings.

    Every solicitor we have been too has said the home has to be sold... highest bidder/put it on the market etc, and the meetings go no further.

    We can't seem to get an answer as to why sibling no.1 cannot buy out the other parties share. Maybe I'm missing something or can someone shed some light on this as it seems to be dragging out too long.


  • Registered Users Posts: 25,437 ✭✭✭✭coylemj

    If sibs 2,3 and 4 each sell his/her share to sib 1 for less than 25% of the fair market value, the Revenue people could see that as a gift between siblings. Which could attract CAT.

    Your solicitor may be trying to tell you that to avoid tax complications, the place should be put on the market and sib 1 can go and bid for it. Another reason a solicitor might be telling you to put it on the market is because, in financial terms, it is sound advice.

    You've sat in front of a solicitor and outlined a plan which will see you dispose of an asset for less than it's market value. The solicitor is fullfilling his/her professional responsibility in telling you that the place should be sold on the open market. Because sometimes a solicitor has to advise you against a course which is not in your best interests.

    There is nothing in law to stop each of the sibs selling their 25% share to sib 1, just don't expect a solicitor to approve the plan.

  • Registered Users Posts: 1,240 ✭✭✭monseiur

    Nothing complicated about it. Four beneficiaries involved. Solicitor appoints an auctioneer who operates in the general area to valve the said property. Say the value is €200,000. The party who's interested in buying the property lodges the sum of €200k. with solicitor. The solicitor divides the €200k less all fees and expenses etc. 4 ways. The party who buys the house gets his/her equal share like the rest + the property.

  • Registered Users Posts: 5,900 ✭✭✭Princess Calla

    The only issue I can see is the tax implication.

    There are plenty of people living in their childhood home after buying out siblings.

    Obviously the more siblings there are the more awkward it gets.

    I would get the house valued by an estate agent, that way you will have written proof of market value and then sibling 1 can buy out the others at market rate. Once everything is at market rate it shouldn't trigger a tax liability other than the usual stamp duty.

    Once under threshold CAT shouldn't be triggered for siblings 2/3/4 as they are just getting their inheritance as if a stranger was buying the house.

    If sibling 1 needs a mortgage the bank will also look for a valuation from their approved panel. So the sale will have to be market rate.

  • Registered Users Posts: 1,280 ✭✭✭youtheman

    My parents are recently deceased. I have 2 siblings. The total value of my parents assets were assessed (house, shares etc.). I came to an agreement with my siblings that I would get the house and pay both my siblings their share of the estate. House DID NOT have to be sold. I have the deeds now and I am the proud owner of the house.

  • Registered Users Posts: 267 ✭✭Dslatt

    The sibling can of course buy out the others, its been done in my family no issue

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  • Registered Users Posts: 25,437 ✭✭✭✭coylemj

    Nobody is saying it can't be done. The issue is the notional value of the house that will be used. OP says the sale will be for 'a little less than market value'. That is the issue.

    If a solicitor gives the proposed sale his blessing, it would be open to sibs 2,3 and/or 4 to sue for the financial loss that would result. Because, under professional advice, he or she would have sold an asset for less than it's true value.

    Each of the solicitors included in this statement: 'Every solicitor we have been too has said the home has to be sold' is simply covering his/her professional ass.

  • Registered Users Posts: 1,668 ✭✭✭Payton

    I should have said that the house was valued on legal advice and falls under €300k. What is the inheritance tax threshold for siblings?

  • Registered Users Posts: 11,788 ✭✭✭✭BattleCorp

  • Registered Users Posts: 10,632 ✭✭✭✭28064212

    OP, who is currently the legal owner of the house? Is it (A) the deceased parent's estate or (B) siblings 1-4? That is, has the will been executed yet? If it hasn't, then I can certainly see where the solicitors are coming from - siblings 2-4 can not gift something they do not yet own. As part of the distribution of an estate, the only options for a property are joint ownership or sell and split the proceeds.

    If that is the case, you need to proceed with the estate distribution first, meaning the siblings will be liable for CAT. When that is complete, siblings 1-4 can make a new arrangement.

    If option (B) is the case and the siblings are the current legal owners, then you need to investigate why multiple solicitors believe it's not possible. You said you got multiple different opinions, but haven't posted any of them here. It's most certainly possible for a person to gift items to their sibling in a general sense. There are also plenty of specific scenarios where it may not be possible

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  • Registered Users Posts: 26,511 ✭✭✭✭Peregrinus

    What 28024212 said. As I read the OP I was thinking "we're not being given the full picture here — important information is being omitted". What we are not being told is why the multiple solicitors advise that the house must be sold on the open market. OP says "we can't seem to get an answer to that question". But what do the multiple solicitors say when the question is asked? Do they refuse to answer?

    On the facts stated in the OP, what the family want to do is doable. There must be further facts, known to the multiple solicitors but not disclosed in the OP, which lead them to give this advice.

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  • Registered Users Posts: 1,668 ✭✭✭Payton

    What I have posted is the full picture...why the solicitors won't agree are from "no, too complicated" to "it's not doable" when I asked why I'm told it's just not" and I'm shut down. There is nothing complicated, the will states that "the property is to be divided one-fourth share each". There are no shares in companies, There is no issues with the house as regards any planning permission, rental agreements, debt etc.

  • Registered Users Posts: 26,511 ✭✭✭✭Peregrinus

    OK, fair enough. It may be a bit late for me to tell you this, but if I were you I would not be paying the bill of any solicitor who declines to advise, in writing, on why what you want is not possible.

    If the facts are as you have stated, and are only as you have stated, then what you want to do is possible. As others have pointed out, it may have tax consequences and if there is an executor of the estate who is a bit nervous about it all he may want some kind of indemnity, but these things can all be dealt with. Tax can be paid; indemnities can be provided; etc.

    (I'm not suggesting that you are withholding relevant facts. But, by way of example, the kind of facts that might explain why the solicitors would form this view would be things like — one of the beneficiaries who proposes to sell their share at an undervalue is underage, or otherwise lacking in competence or vulnerable to exploitation; some beneficiaries are refusing to get independent advice; the estate is indebted and selling the house is necessary to clear the debts; the sibling who wants to buy the house is also the executor, and so has a conflict of interest.)

  • Registered Users Posts: 10,632 ✭✭✭✭28064212

    You still haven't answered a critical question: who is currently the legal owner of the house?

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  • Registered Users Posts: 1,668 ✭✭✭Payton

    The deceased parents.

  • Registered Users Posts: 10,632 ✭✭✭✭28064212

    Right, so the issue is likely what I said above: siblings 2-4 are attempting to gift something that they do not yet own. Complete the distribution of the will, then engage a solicitor to organise the sale to sibling 1. You can't skip over that part. As Peregrinus pointed out, there could be debts on the estate that may require sale of the house to clear. There could be an as-yet-unknown sibling 5 who only enters the picture at probate. Uncle X could contest the estate distribution. Any of these things and more could drastically change the scenario

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  • Registered Users Posts: 25,437 ✭✭✭✭coylemj

    Has probate been completed on the estate i.e. has the executor been issued with a Grant of Probate? I don't believe it's necessary to register the house in the joint names of the four siblings before the house can be sold. I was the executor for the estate of an aunt of mine. My sister inherited an apartment in the will, she then rented it out for a while but never got it registered in her name. A couple of years later, she sold it and I (as executor) had to visit her solicitor to sign some documents but she was never the registered owner.

    Once probate has been completed, I see no reason why sibs 2, 3 and 4 cannot sell their 25% shares to sib 1.

  • Registered Users Posts: 621 ✭✭✭bureau2009

    Surely it's okay for siblings to agree to the sale of a family home to another sibling at a very slightly discounted price? The siblings don't have the hassle of paying estate agent selling fees (I understand entirely that a professional valuation is required) and it's also a small gesture of goodwill to the sibling who is buying.

    There can be a lot of work clearing and cleaning a house for sale. It's very convenient to all parties if a family member buys out the other siblings' share.

    Any thoughts?

  • Registered Users Posts: 6,236 ✭✭✭Claw Hammer

    The deceased parents are not the owners, even if registered. The e4xecutor is the legal owner. There may be a problem if the sibling who wishes to buy out the others is the executor as there is a conflict of interest. That can be remedied by having him renounce and another executor appointed. Another issue may arise if there are debts to be paid by the estate. There does not seem to be any reason why there cannot be a deed of family arrangement varying the will, if you all agree.

  • Registered Users Posts: 26,511 ✭✭✭✭Peregrinus

    I agree with what Clawhammer says.

    There is a chance, though, that — depending on the value of the property and the amount of the discount being given to the purchasing sibling — between the cost of having a deed of arrangement prepared and executed, getting independent advice for all those involved, dealing with any resulting tax liability, etc, the cost of all this will outweigh the value of the discount, and that simply selling to the sibling concerned at full market value may be the cheapest option; it could be that this is what underlies the advice the family has received so far.

  • Registered Users Posts: 3,997 ✭✭✭3DataModem

    Firstly, you'll need 3-5 solicitors for a deal like this, each beneficiary plus the estate will need to take advice, and that advice will generally need to be independant (perhaps 2/3/4 can be the same solicitor).

    This is absolutely possible. I've seen it happen in my own extended family. The advice you've been given is incorrect.

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  • Registered Users Posts: 18,584 ✭✭✭✭kippy

    You can't state that the advice being given by a number of legal professionals is incorrect without knowing all of the facts. We are slowly seeing some more facts being disclosed but they are in no way the facts a solicitor would need to make a call on something like this.

  • Registered Users Posts: 26,511 ✭✭✭✭Peregrinus

    Indeed. But as a matter of legal principle what the OP wants to do can be done, and if there are facts which may it impossible or impracticable in this case, they have not yet been brought to light. At the very least we can say that, base on what's in the OP, the solicitors who have been consulted have been unable to communicate to their client why it can't be done in this case. It's worth pursuing at least to the point where a clear answer to that question is obtained.

  • Registered Users Posts: 212 ✭✭tom traubert

    Questions for the OP.

    Is the executor one (or more) of the 4 siblings?

    Has probate been applied for or granted yet?

    I ask because I, as executor, extracted probate of my late mother's will as a personal applicant. It was a very straightforward estate, including the family home as the main asset. It was a little time consuming but also a rewarding experience. The beneficiaries were my siblings and myself.

    With the prior agreement of the remaining siblings the house was subsequently sold to the remaining (5th) sibling at a price that could have been regarded as a little below market value. If any questions had arisen with Revenue I was quite confident that I, as executor, could justify the sale price based on the house needing modernisation, and also prices of similar properties in the area gleaned from the Property Price Register.

    Once probate was extracted we had no difficulty with the sale / conveyance of the house from the estate to the 5th sibling.

    There were two solicitors required, one for me as executor and one for the 5th sibling. One poster above suggested 3 to 5 solicitors would be needed. I believe that's not the case as you say all siblings in your instance are in agreement.

    When it came time to close the sale the 5th sibling transmitted 4/5ths of the sale price from his solicitor to mine, along with a formal letter drafted to indicate that the 1/5th not transmitted was his share of the sale proceeds.

    With clear communication, and evidence based assurances that all siblings (beneficiaries) are in agreement, I can see no reason why you shouldn't be able to proceed as above.

  • Registered Users Posts: 3,997 ✭✭✭3DataModem

    Fair comment.

    I think the point I was trying to make was that it is possible generally for one sibling to buyout the others in the situation like this. As you say, the reason for the solicitors' unwillingness must be related to some other nuance or aspect of this situation.