'I do not want to be unfair to my siblings, but I also do not want them to own an interest in my house'
Dear Quentin,
I have a question regarding my mom's money and how it should be handled.
I am one of four siblings. We all live in different places. A few years ago, my mother decided to downsize and move nearer to me. My siblings were (and still are) all supportive of the move.
When my mother moved out, we decided to sell my house and buy a new place with more land to build an ADU for my mother. To purchase the new house and build the ADU, my mother gave me $50,000 towards the down payment and another $100,000 towards building the ADU. The remaining funds came from my savings, equity from the sale of my old house and a mortgage, which I pay. Based on the money we put into the new house, my mother paid 15% of the purchase price.
My mother has an investment account, and she has the account set up where, when something happens to her, each of the four of us will get 25% of the account. There should be a decent amount of money left in the account, barring any unforeseen circumstances.
Instructions in mother's will
My mother has also set it up in her will that my house will go directly to me and will not be included in her estate. I suggested to my mother that she give me a smaller percentage of her investment account to make up for the money she gave me to purchase the new house and build the ADU. She said no. She believes that it is fair since I did move for her and since I will be taking care of her as she gets older. She also brought up the fact that she does sometimes help my siblings out with money.
My one sibling knows about this arrangement and is fine with it. However, she says another sibling is upset about it and feels that the estate should be entitled to a 15% interest in my house (which has and will likely continue to appreciate quite a bit as I live in a high-cost-of-living place).
I do not want to be unfair to my siblings, but I also do not want them to own an interest in my house. Should I leave it as is? Should I revisit the issue with my mother and, if so, what should I suggest? Should I take a lower percentage of the accounts now? Should I "pay back" the estate for the down payment or the building of the ADU? Should the estate get some of the appreciation in my house or interest on their money?
Related: 'I'm conflicted': I have two sons - one is a hard worker with kids and the other is a 'carefree' actor. Should I leave the 'family man' more money in my will?
Dear Daughter,
With four siblings, you are likely going to get four different opinions. People are entitled to their opinions. You can acknowledge that Greek chorus and tell your brothers and sisters that you have heard their point of view, and respect their feelings. That does not, however, oblige you - or anyone else reading this letter - to do anything other than what you have always planned to do. The mistake people often make in families is to believe that there needs to be a years-long battle of wills because one sibling's opinions and feelings are not acted upon by others.
What does that mean for you? It's quite simple, really. You have an arrangement with your mother to live with her and be close by in case she needs you, and you have moved house so you could both have a place large enough for you both to live in. That is not an invitation to your siblings or even your next-door neighbor to venture an opinion about what should happen to your mother's estate after she's gone. If your mother contributed 15% to the cost of your home, that's her choice. She did so without any duress and she is of sound mind. It's a good deal.
Your mother's bank account and estate is not an open book to be parsed over by third parties. This is her money, her living arrangement and her business. She may treat the money as de facto rent for the time she spends there ($150,000 divided by the number of months you and she share your property) or she may simply regard it as a gift. If there was no mention of this being a loan, and you did not sign a notarized loan agreement, it was legally a gift. You can, by all means, check in with your mother and make sure she's OK with the arrangement.
Your mother has done everything right, from what you say in your letter. Your mother has ensured that her share will go to you upon her death. She could also create a transfer-on-death deed so the property goes to you directly when she passes. As long as you have entered into this arrangement freely and happily, and have done so under the guidance of a real-estate attorney, now is the time to look forward to this new chapter, and enjoy all of the quality time with your mother. You won't get that time back. That's worth a lot more than 15%.
The Moneyist regrets he cannot respond to letters individually.
More columns from Quentin Fottrell:
'We shared all our assets prior to our marriage': My husband inherited his parents' home and didn't put my name on the deed. What can I do?
'He's 70 and fairly wealthy': I met the love of my life three years ago. How do I politely ask that he include me in his will?
'I'm guilty of helping too much': My married adult son constantly demands money. How do I put an end to his mooching?
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-Quentin Fottrell
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