Our mother passed away in 2013 leaving the estate to be divided between siblings.
My brother, his wife and family lived with our mother and all siblings have allowed them to live there since she died.
The time now has come where we feel that it is time to sell. Unfortunately my brother is unable to buy the property as he is the only breadwinner and wouldn’t be able to afford a large mortgage.
Inheritance dilemma: Brother and family live in mother’s old house, but the other siblings want to sell (Stock image)
All siblings have agreed he can stay in the property for the time being having made it clear that he has to find another property.
As the executor how can we make this legal without losing our individual share of the estate?
Paul Handford, wills and probate lawyer at Which? Legal, replies: On the face of it, it is a simple matter of asking your brother to leave, selling the house and dividing the net proceeds between your siblings.
In practice, it is very far from simple and often consumes a lot of emotion, time and expense.
As executor, you have the prime responsibility for sorting this out, so I’ll run through your options and some of the challenges you might come up against.Â
Can your brother buy the property by private arrangement?
You mention that your brother doesn’t have access to the finance to buy the house in full from all other siblings.
However, there could be an opportunity for a private arrangement where your brother buys the house from the estate over a set period of time.
Paul Handford: ‘As executor, you are under a duty to act impartially, which means you must do what is in the best interest of all the parties’
You could agree on a value of the property and he could pay you each monthly instalments, plus interest, until he owns it outright.
You would all receive some extra (taxable) income without having to uproot your brother and his family.
However you must take independent legal advice when setting up such an arrangement to review the land law and tax consequences.Â
Can you force your brother’s family out of the property?
It is unlikely your brother will make himself and his family voluntarily homeless, especially if all his siblings are already housed.
His share of the house may not be sufficient to buy another property and his income may not be sufficient for him to bridge the gap with a mortgage to buy something.
Nor does he have to move without the estate having obtained a court order evicting him.
If he makes himself voluntarily homeless there is no legal obligation on the local authority to rehouse him.
So, if you fail to reach agreement and your brother refuses to leave the property, it is likely that this will end in the executors having to take court action.
The court generally will grant an order for sale where one legal owner wants to force the sale under the Trusts of Land and Appointment of Trustees Act 1996, but if there are children under the age of 18 living in the property this is not automatic, as the court has to consider what will happen to the children.Â
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What has your brother contributed to the property while living there?
It is possible that some sort of promise was given to your brother by you or your siblings upon which he has relied to the effect that he can stay in the property indefinitely provided he repairs, insures and maintains it.
This could lead to him raising the defence of ‘estoppel’, which in layman’s terms means preventing you and your siblings going back on your word.
In a nutshell, that would mean the court would only grant an order to sale consistent with the promises given to him and may not grant an order for sale at all.
As executor you will need to explore what promises or commitments, if any, were given to your brother or his wife and by whom.
If he has paid anything towards a mortgage or carried out improvements that have increased the value of the house then he would be entitled to an enhanced share of the proceeds of sale to reflect any increase in value.
Likewise if you and your other siblings shared out the rest of the estate without him, that would have to be taken into account.Â
Does your brother have a case to sue your mother’s estate?
As the executor, you might be confronted by your mother’s estate being sued by your brother and his family under the Inheritance (Provisions for Family and dependants) Act 1975.
The basis of the claim would be that your late mother did not make reasonable provision from her estate for them.
However such a claim must be made within six months of the Grant of Probate. Thereafter permission of the court is required to bring a claim.
Your brother may have lost the opportunity to make an Inheritance Act claim, which could have resulted in his share of your mother’s estate being increased substantially.
His wife may also have had a potential claim as a dependent, and his children may well be able to pursue claim against the estate for reasonable provision in the circumstances, if the court can be persuaded to grant them leave to apply out of time.
This is something you must take legal advice upon before you do anything else.Â
Whose name is the house in now?
If the house was transferred into all the names of residuary beneficiaries as tenants-in-common sometime after the Grant of Probate, then their interests would be protected as legal owners.
But more likely the title will show the house is still in the estate, or possibly the names of the executors as trustees, and this has some capital gains tax implications, as the estate’s capital gains tax allowances are lost after three years.Â
What role should you as executor play?
All in all, this is a minefield for all the parties involved. But as executor, you are under a duty to act impartially, which means you must do what is in the best interest of all the parties.
If a private agreement cannot be reached then it would be wise for each party to get independent legal advice and then see if the matter can be resolved amicably or by mediation.
Litigation would be the last resort and on the information provided it is impossible to suggest what the outcome of that might be other than that all of you may be getting a lot less than they might have otherwise received.
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