Alternative Ways To Divide A Will?
March 20, 2016 11:13 PM   Subscribe

My brother lives with my dad in the family home. My dad's will leaves everything 50/50 to my brother and me. However, the likelihood of my brother staying on in/ being unable to leave the family home is reasonably high, which in effect means that the house could not be divided. So: while 50/50 sounds good and fair, the reality is that my brother will get 100% of the house - unless I'm willing to pull ugly legal strings (I'm not). We can't be the first family to face this problem - how do other folks reach some alternative, agreeable outcome?

Additional details:

My brother has a history of mental health issues, essentially had a breakdown a few years ago, and has since moved in with my dad. This living arrangement has been working out for him, and is a dramatic improvement on how things were during the breakdown phase. Which is all well and good, but because of the breakdown and mental health concerns, neither my dad nor I are willing to take the risk of asking uncomfortable questions about his future for legitimate fear of initiating regression or withdrawal - so we can't really sit down as a family and discuss the best way to handle the estate. And as things stand - for a long list of reasons which are beyond the scope of this question - I think (a) he may stay on in the family home indefinitely, and (b) that's probably the best option for him.

I don't know what other assets my dad has, or what they amount to, but I would guess that their total is less than the value of the house. But even if they are equal to the value of the house, then under this scenario the 50/50 split would actually mean 25/75 - if their total is less, then we could be looking at anything from 20/80 through to 10/90. Whatever it ends up being, for an intended 50/50 split, essentially 25/75 is best case as things stand.

If those are the breaks, then so be it - we're just wondering if are there other ways that my dad could divide his estate that may be a little more balanced? How do other families manage this type of problem - we can't be the first to encounter this, surely?

(note: really just looking for answers to the question here - thanks!)
posted by anonymous to Work & Money (18 answers total) 2 users marked this as a favorite
The party who wants the house can buy the other party's share, either with a mortgage or with the cash they inherit. I have seen this happen. Or the will can just leave the house to one and everything else to the other.
posted by bleep at 11:17 PM on March 20, 2016 [3 favorites]

Some years ago, my parents told me that they had arranged their wills so that my brother, whose house is on the same 10-acre plot of land as my parents', would get their house and property, and I would get the other assets. They felt that my brother ought to be in control of what was done with the land, and with a house so near to his own. (I've since been disowned, so I may be written out completely at this point. But this is what they had settled on at that point.) I think the house and land were, on paper, worth more than their other assets, but obviously the other assets were more liquid.

My grandmother's will left her very modest home to my uncle, who had lived with her his entire adult life after suffering brain damage as a young adult; he would never be able to live independently, and the idea was that he should not have to give up his home. The rest of her estate was divided among my mother and her other siblings—I think it worked out to something like $12,000 each. My uncle's financial needs were taken care of by a trust my grandparents had set up during his lifetime and accumulated by paying his expenses themselves and putting his social security and worker's comp payments into savings for him.

FWIW, my grandmother actually skipped one of his children in her will, leaving that share of the estate to my cousins instead of to their mother.
posted by not that girl at 11:25 PM on March 20, 2016 [1 favorite]

Does he have to stay in that actual house? If a family has been raised there, chances are it's a lot more house than he actually needs, with everything that comes with maintaining a home - gardens, upkeep, cleaning etc.

Maybe your father could sell the place and together move into a smaller apartment before he dies, freeing up hopefully more cash for you and getting your brother used to new accommodation in the meantime. Of course, it would be easier if you knew when your father were passing but it would solve having more access to assets, making it more equitable for both of you and your brother and father would have a lower maintenance home to look after.

Otherwise, yes, one party buys out the other but the way this is phrased makes me think your brother may not be able to do this.
posted by Jubey at 11:26 PM on March 20, 2016 [15 favorites]

If the other assets are equal to the value of the house, there's no reason you couldn't take them and give 100% of the house to your brother. It's not like 50/50 means you have to divide everything in half and split it. Also, you could maybe rent your part of the house to your brother and have things balance out that way. An estate planning attorney can help you figure out a way to make a fair split.
posted by spacewrench at 11:26 PM on March 20, 2016 [2 favorites]

It sounds like you want to adopt a fair approach with this. The question becomes what you and your father determine to be fair.

For some people, fair is totaling up the dollar amount of all assets and dividing equally. For others, "From each according to his ability, to each according to his needs."

If your needs are also great, think about how they can be accommodated. What do you want? What do you need? If anything remaining were going to a charity and not to your brother, what would you ask for?
posted by samthemander at 11:35 PM on March 20, 2016 [8 favorites]

Also, for what it's worth: my grandmother left her home to her three children equally. The market was depressed, so one person bought out the other two, held on to the home for a few years, and then enjoyed an astonishing nearly 70% appreciation (Apparently Grandma passed at the bottom of the market). I think all involved still have mixed feelings about how fair this feels, even if it was equitable at the time of her passing.
posted by samthemander at 11:38 PM on March 20, 2016 [1 favorite]

Consider the possibilities if your brother is living by himself and his mental problems recur. Is he likely to sell the property in a fit of enthusiasm? Is he likely to become a shut-in hoarder? If he inherits the house on the assumption that he's going to stay there, then immediately sells it, I think his getting 75% of the estate would seem a lot less equitable.

I don't know about the law in your jurisdiction, but in many places it is possible to leave you with joint ownership but giving him the right to live there. Then, if he moves out and the house is sold, you split the proceeds 50:50. Joint ownership might mean that all the tax and maintenance burden is on your shoulders, but if your brother's competence is fragile that might happen anyway even if the whole thing belongs to him.
posted by Azara at 1:59 AM on March 21, 2016 [11 favorites]

From how you describe your brother, I believe that there is a good chance you'll be supporting him after your father dies. Therefore, I would focus with your father on only finding a solution for your brother (health insurance, trust, real estate, other support network etc...) that will help your brother live independently for as long as possible with the value of your father's estate.

I think it might/would (both morally and) financially short sighted of you to optimize your inheritance at the moment of your father's death trying to get as close to 50% as possible and then finding out that you end up paying much much more after your brother winds up dependant on you and improperly prepared.
posted by jazh at 3:38 AM on March 21, 2016 [16 favorites]

Exactly this situation happened with my father-in-law. His mother's' house was left equally to him and his brothers. His brothers needed to keep living there. They bought out his share of the house (using either their own money or some of the liquid assets that were left to them), so he got the cash value of what was left to him. It was a win-win -- he lives in another state and didn't want the legal responsibility of part ownership of a faraway house, but could use the money, and his brothers got to own their home free and clear.

I'm not a lawyer and have no idea if this is possible, but maybe your dad could construct his will such that your brother gets the house and you get liquid/other assets equal to 50% of the house's cash value (at the time of probate?), and whatever's left is split equally? If the non-house assets don't come up to 50% of the house's value, then your brother could buy out the remainder of your share of the house (assuming he has some money of his own)?

It's worth you and your dad talking to a lawyer to try and figure out the fairest way to divide things, even if your brother can't be part of that conversation.
posted by snowmentality at 4:17 AM on March 21, 2016

What we are doing in my family is that I will have control over the largest part of the estate with the agreement that any money from that will be used to care for my brother as needed. He will always have a home, a car, and anything else that he needs but, he won't have to power to stop me from using the estate to provide those things for him. There is a good chance that the entire estate will end up going to his care, with nothing left for me. But, that is the agreement that I made with my parents and, it is what I believe to be the right thing to do for a sibling that is disabled.
posted by myselfasme at 5:10 AM on March 21, 2016 [7 favorites]

I'm unclear on why you don't want to involve your brother in this conversation. According to the post the breakdown was several years ago and he's been doing well for some time now. I think it will be more productive to work out these issues with his involvement now rather than wait and have him deal with it all in the wake of your father's death.

Living in the house may be the best option from your perspective, but will he want to stay there by himself after your father passes? Will he need financial support from you, and would it make sense to create some sort of special needs trust to support him as part of the estate planning? Will he be capable of living there alone, or will he need additional services to support him in maintaining the home?

I'm not saying you have to dump all the information and decision making on him, but after you narrow down your options you can sit him down and get his input. If he has a therapist/treatment team you could potentially discuss it during a session to help him process everything.
posted by fox problems at 5:51 AM on March 21, 2016 [2 favorites]

IANAL, but a will that literally says "split my estate 50/50 between my two kids" would turn out to be a huge headache in all but the most Solomonian of families.

My mom passed last year and my oldest brother (whom my other two brothers and I trusted) did everything possible to get valuables out of the will e.g. the house was titled in such a way that ownership passed to the four of us upon her death (we sold it), and we were named beneficiaries in her financial accounts. We all agreed ahead of time what was equitable, and he made sure that her "significant other" was also included so that he felt fairly dealt with.

1. It's your dad's money, he gets to pick.
2. Do your best to involve everybody involved to figure out what's best for everybody beforehand. You'll need to get a valuation on all components of the estate.
3. Work to get as much of the assets as possible to transfer outside of the estate. The less in probate the better.
4. Professional help would probably be money well spent in headache reduction, especially if you will eventually be the executor.
posted by achrise at 7:18 AM on March 21, 2016 [1 favorite]

Imagine a situation in which you own half the house, but don't see cash benefit until your brother moves out even if that's years in the future. I can imagine circumstances where that would be perfectly fine, and other cases when it would be awful.

To what extent will you be a caretaker for your brother when your father isn't around any more? Would you see loaning him your half of the house as part of your caretaking duties? Do you have things going on in your life that require that money for your personal future plans? Is the house a terrible investment, or might it reasonably be called storing your money in real estate?

That said, I like the idea of downsizing out of the family home if your brother isn't up for major home ownership responsibilities.
posted by aimedwander at 7:32 AM on March 21, 2016

we're just wondering if are there other ways that my dad could divide his estate that may be a little more balanced? How do other families manage this type of problem - we can't be the first to encounter this, surely?

Depending how your brother is doing, there may be a few ways to handle this. Keep in mind that even if you are both 50/50 beneficiaries, you might be the executor (or not, worth looking into this) which might give you wide latitude in this decision or it could all be sorted ahead of time. So other things to think about

- your father might have life insurance which might have a considerable post-death benefit which could go either way, be left to one of you, etc. Same with a 401K. So just because he might not have a house-equivalent amount of assets now, it's unclear if that might continue.
- the most common thing with a house that goes to multiple people is to sell the house and split the proceeds. So while your brother might be accommodated with "a place to live" that doesn't mean it would need to be that exact place
- people who do eldercare law will often also worth with parents of adult children with disabilities to help find solutions for them which might mean leaving money or property in trust that could be managed by another family member or a lawyer or trusted friend. Might be worth having a conversation with one of them, and also to raise the issue of who would look after your brother in the event of your father's death

The other things I'd consider would be the usual things which are durable power of attorney (in case your father can not manage his own affairs, this would make a clear designation of who could, for example, write checks in his name. You may not want this to default to your brother and it would be useful to have this handled sooner rather than later) and a healthcare proxy (who can make medical decisions) which would be part of good estate planning. Best of luck finding something that works for you and your family.
posted by jessamyn at 7:46 AM on March 21, 2016 [4 favorites]

My mother was very into demanding the family home not be sold in order to secure my brother always having a place to live and a possible income from renting. I finally explained how stressful it was to me to imagine him trying to maintain a freestanding home (partially "mine") and for that matter tenants while I am numerous countries away. She realized it was more a nice idea than a legit request and the will now states that I will liquidise the house at my discretion and his share will go to housing and a trust from which he can request (he has fixed income) or we the trust admins can release funds for specific needs/wants.
posted by Iteki at 9:24 AM on March 21, 2016 [4 favorites]

Is your brother receiving (or in the future might receive) disability benefits? If so, having the inheritance go directly to him might make him ineligible for disability benefits. The solution is set up a special needs trust which can be used to spend money on him in ways that don't mess up his benefits. Definitely a job for a lawyer if this might be part of the picture.
posted by metahawk at 10:54 AM on March 21, 2016 [4 favorites]

In some places there are laws on the book so that the estate of the deceased is on the hook for supporting dependants regardless of what the will says. So I would suggest you and your father book time with an estates lawyer in your jurisdiction to go over how the distribution of his estate would likely play out.
posted by any portmanteau in a storm at 12:47 PM on March 21, 2016

IANAL, but I've been near your shoes. This is a potentially very complex situation, when you have a family member with mental health issues/disability and fragile functioning. For everyone's sake, you need a lawyer experienced with 'special needs trusts' and family estate planning in your state/province/country. The scenarios you need to anticipate include the incapacity, but not death of your father, and the very real costs of operating this home once your father has died. There is no point in your brother inheriting the home, if he will financially/practically be unable to maintain it in the long term.

The folks above who emphasise getting a lawyer involved are right on target. The stakes here are far beyond 'your fair share' (which again, may vary according which school of 'fair' you belong to) and extend ensuring your brothers long term well being as well as your Dad's, depending on his long term care needs. Remember, depending on the trajectory of your Dad's life/care needs, there could be very little left at the end, but your brother is still left needing support and care, and careful advance planning can sometimes get around this situation to some extent.
posted by Northbysomewhatcrazy at 3:02 PM on March 21, 2016 [1 favorite]

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