Dear Moneyist,
My mom, brother and I bought a single-family house for $60,000 in 1979. Mom put down $20,000 and paid 22% of the mortgage. My brother paid 45% of the mortgage and I paid 33%. We paid it off in 1988. I married and moved out in 1992, but paid the monthly maintenance until 1994. That year, my brother and his wife and daughter moved in. A year later, he had a son.
In 2016, after a health scare, my mom changed the deed from joint tenant to life estate. She passed away this year. During the 26 years that my mom, my brother and his family lived there, I contributed 33% of house maintenance (new windows, roof, boiler, oil tank, garage door, electrical panel, painting, concrete fixes, etc., as well as house insurance).
The Moneyist:I got a promotion and a raise, but my colleagues undermine me. How do I balance work and my happiness?
I did not contribute to real-estate taxes, in lieu of not living there. When my mom died without a will, my brother figured out that if mom’s part of the house were distributed by half, he would end up with 54% and I with 46% of the value of the house, which is obviously worth several multiples of what we paid for it. His math seems correct, and I was happy to agree to that.
I just heard that my sister-in-law and her two children feel that I have “played” my brother and that it seems “fishy” that I didn’t push to sell the house long ago. I never thought that it was my place to ask my mom or brother to sell the house. I thought they would just tell me. During these years my brother started his own business, and subsequently went bankrupt and had difficulty finding a job.
I lost my mom 2 months ago and I’m still in a fog. They want to save on interest, and they are not sure if they would qualify for a mortgage as they co- signed their son’s student loan a little over $100,00 still left, and also have a car loan to pay. They do have good FICO FICO, +1.05% scores.
My brother has had many health issues over his lifetime and presently he is still being treated for cancer. I would appreciate your clarity in this situation. My sister-in-law feels my brother’s share of the house should be greater than 54%. Does his math seem right or should it be more?
May I please have your thoughts? And do you think the division of the house is fair?
I want to keep the peace.
Trying to Do the Right Thing
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Dear Trying,
You will never be able to keep the peace. You only ever need to be at peace with your own decision. That is true both for this situation, and for life.
Your brother and his wife moved into your mother’s home. His children grew up there. It was their home; at least it felt like their home. However, they were living in a property owned by you, your brother and your late mother. When they say it’s “fishy” that you didn’t sell the house long ago, what they really mean is they’re annoyed that they did not buy you out of the house a long time ago, before it increased in multiples of its original value.
“ Do not make any decisions that result in less than the previously agree 46% at this time. To use their loans as leverage is unseemly, and should not play a role in selling up or buying you out. ”
They could have owned all of it for a fraction of the price, and they should have thought of that then, and they would have done so had they realized they’d be in a position to own all of the home instead of just over 50%. It’s a classic case of coulda-shoulda-woulda. Who are they going to hold accountable for their own inaction and lack of foresight — themselves? Not on your nelly. Why on earth would they do something as obvious as that when they can blame you instead?
If you sign over this house now to keep the peace and/or to secure the friendship and love and loyalty of your brother and his family, you will only end up resenting them and resenting yourself. It won’t change who they are, and they will likely find another reason to hold other people responsible for opportunities they did or did not take in their own lives. You can’t solve that problem by signing over your inheritance to your brother and his family. So don’t try.
You upheld your end of the agreement. They probably saved far more money by living there without having to pay a full mortgage/rent. Your brother calculated how much you both contributed, and he came up with a 54/46 split. Ignore any reported comments from your in-laws, and tell whoever told you those comments that you’d rather hear from them directly or not at all. If they express this to you directly, tell them what I told you: “Take responsibility for your own actions.”
“ If your sister-in-law insists on you giving up more, she risks creating more disturbance at a time when she might do better showing you support for the loss of your mother. ”
To nickel and dime over percentages at this point is a fool’s errand. Your brother’s split is an estimate, and any other figure will also be an estimate at this point, as tracing back the money they saved by living there and other costs/taxes etc. is a task for a forensic accountant, and even they would have difficulty coming up with an accurate figure. The legal answer is 50/50, the domestic solution is 54/46. I don’t believe they should chip away at your legal inheritance.
They appear to feel entitled to it because they have lived there, but to lay this at your doorstep and to make it your sole responsibility to give up your share of your mother’s house is sharp practice, especially given that it is only two months since your mother’s death. Their car loans, student loans and any other kind of loan are none of your concern. To use that as leverage is unseemly. Do not make any decisions that result in less than the previously agree 46% at this time.
You may need this money a year or five years from now, and you may live to regret being guilted into a decision. Giving people what they want against your own better judgement will not change them, or your relationship with them. If your sister-in-law insists on you giving up more, she risks creating more disturbance at a time when she might do better showing you support for the loss of your mother. A more impatient person would say, “You’re right. It’s too complicated. Let’s split it equally.”
Your sister-in-law wants more than 54% for the privilege of living there for 26 years. She should be thanking you for not insisting on half.
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