I have a long story and I will try to make it as short, but as informative, as possible. My brother and I lost our mother in 2008. As part of the will, we were supposed to split everything 50/50. This included life insurance, a house and some debt. The house still remains.
Since 2009, I have resided in the house, maintained it, took out a mortgage to cover an old second mortgage and paid back taxes so the house would not go into foreclosure. I have done all this by myself, with no help from my brother, physically, emotionally or monetarily. There are many layers to this story, too numerous to get into. Boredom would set in, after a while.
My question is this: Although my brother has essentially abandoned me and this house, he is still expecting to get paid half of what the house is worth when it is either sold or remortgaged. Do I owe him anything?
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That this arrangement has gone on for over a decade without being resolved is surprising to say the least. I don’t know what caused your relationship with your brother to sour — perhaps it was years in the making, or perhaps negotiating the settlement of your mother’s estate caused a breakdown.
Whatever the case may be, I must say it’s not unexpected that your brother hasn’t pitched in much on the home’s costs. Look at things from his perspective: Relatively shortly after his mother died, his brother swooped in and set up camp in what was previously her home. He didn’t get to use it — or earn the proceeds from the sale — so it’s not surprising to me that he didn’t want to pitch in on the maintenance for a home that he didn’t get any use out of.
You spared me the details, but I have to wonder: Did you get his permission before moving in? Simply put, according to your mother’s will, the home was equally inherited by both of you. Presumably, the title is in both your names, as well as the mortgage. Yet you alone decided to use the home as your own. Maybe your brother wanted to sell it. Maybe he was hoping it could be shared as a vacation getaway for both your families to enjoy.
Whether your brother is owed any money is not for you to decide — it was your mother’s choice. She could have opted to have him inherit her life insurance proceeds and other assets, and leave you the home. Instead, she decided that everything should be split equally. Just because he has been absent — by choice or otherwise — doesn’t mean he is not entitled to his share of the home’s value.
If you want to own the home fair and square, you’ll likely need to buy your brother out. Had you done this back when your mother died, it likely would have been a simpler process. As it stands now, I see the potential for squabbling. Typically with a buyout among siblings, the home would be appraised to determine how much you would need to pay your brother to own the home solely.
I can understand why you’d be concerned about doing an appraisal now. With home prices rising nearly 20% over the past year alone, it’s likely the home’s value has increased considerably since 2008.
“With home prices rising nearly 20% over the past year alone, it’s likely the home’s value has increased considerably since 2008.”
Your brother did not chip in to pay the mortgage or the home’s maintenance — so I can understand why you wouldn’t necessarily want him to rake in the profits from the home’s growing value in the time when you’ve been the one caring for it. You could ask him if he would feel comfortable receiving the equivalent amount he would have earned had you handled this all years ago.
There’s a chance though that you’ll need to go to a court or mediation to resolve this dispute, and you may want to consult an attorney before reaching out to your brother to settle things. Perhaps your brother truly doesn’t care about how much he’s owed — or maybe he cares a lot and wants to see every penny. Starting off on the right foot could make the transaction go more smoothly, and an attorney might be able to help with that.
A couple things to keep in mind, as you work out the details of a buyout: First, you need to figure out if you have the funds to follow through with this plan. If not, you’ll need to line up financing — and this won’t be a simple matter of refinancing the existing mortgage. According to Rocket Mortgage, conventional lenders don’t typically offer those types of loans, so you’d instead need to rely on a non-traditional lender.
Second, depending on where you live, the transaction could have property tax implications. In California, for instance, “the result of the buyout leads to a property tax re-assessment because the transfers between those family members are likely to not be exempt transfers,” Kevin Snyder, an attorney based in Orange County, Calif., wrote in a blog post.
If you ultimately cannot afford to buy your brother out, he might compel you to sell the home — as is his right as someone who inherited an equal share of the property. I would prepare for this possibility now, so that it doesn’t come as a surprise if another compromise cannot be reached.
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