My mother died intestate in 2016. Since 2020 all six siblings are registered as owners of the family home in equal shares holding as tenants in common. One sibling has lived all their life in the family home. Another sibling has returned to live there post-2016.
Both have signed a caretaker’s agreement, including a proviso that they will vacate when required to do so. Despite this, they have indicated that they will not do so, as they are unable to acquire their own property or buy out the remaining siblings.
Are there tax implications for these two (benefit in kind)? Does the equal share count as an asset under the Fair Deal Scheme? What options are available to those siblings who wish for the house to be sold?
Mr MR, email
This is in danger of heading for a legal dispute. You cannot really have equal owners of a property depriving each other of their ownership rights.
The problems for you clearly started when your mother died intestate. With six of you sharing equally under intestacy rules, and the house probably the major asset in the estate, you have inadvertently found yourselves equal owners of the property. As tenants in common, each of you owns a sixth of the property rather than all sharing 100 per cent ownership as joint tenants. So you have a specific asset – or share of the asset – that you own.
However, there seems to have been a lack of clarity at the outset as to what the longer-term plans should be for the property. That’s a pity. There were four years between your mother’s death and you six all coming into formal shared ownership of the property. It really should have been time for everyone to make their intentions known regarding their expectations for their share of the common asset in the estate.
Instead, you appear to have got to a position where – with no one saying anything to avoid upsetting anyone else – all sorts of presumptions have had time to take a firm hold. It really is a classic Irish family situation – a brewing dispute that no one wants to call by that name for fear of upsetting the family dynamics.
You don’t clarify everyone’s position on the family home, but clearly the sibling who has been living there all their life and the other one who has subsequently returned to live there are now working on the basis that they will continue to do so as long as they live.
It is unfortunate that these two siblings cannot afford a mortgage in their own name, but the bottom line is that that really is not relevant in determining the outcome of this issue. Their personal circumstances don’t entitle them to breach your rights as owner of a specific share of the property.
You say both your siblings residing in the property signed caretaker’s agreements. These are written legal agreements that allow a person into a property before they have title or a lease. They are generally used where a buyer is in a hurry to gain possession before the conclusion of all legal formalities allowing the closure of the sale.
Critical to such agreements is a requirement that a person must leave immediately when asked to do so.
Lawyers, in general, are not in favour of these agreements because it just adds another potential conflict into an already complex transaction. Given that no one voluntarily brings additional potential for legal conflict on themselves, such agreements require a degree of trust and goodwill between the parties.
I clearly have not seen the wording of the caretaker’s agreement in your case – and I’m not a solicitor in any case – but the big issue is what happens after the transition period is concluded.
As I understand it, each of you does now have title on this property. In that case, a caretaker’s agreement would usually expire, but I can certainly see the sense of using such a document to ensure that a formal structure is put on the rules of engagement when some owners decide they want to sell.
Everyone must be aware here that it was always likely the property would need to be sold to allow each of the six of you access your inheritance in a form that is of practical use to you. It’s fine for the two siblings living there but it was never likely to be a long-term solution for any of the other four.
If your two siblings residing in the property continue to ignore any attempt to activate the caretaker’s agreement or otherwise engage with the desire of the other four siblings to liquidate the asset so they can gain practical control over their inheritance, a legal dispute seems inevitable.
The danger here is that the two siblings residing in the house at least appear to have limited means. If legal costs mount, it could end up coming out of the value of their inheritance. That will put them in an even more impecunious position.
There appear, on the very limited facts available to me, to be no grounds on which they can reasonably insist on their four siblings being at a financial loss because of their personal financial position. If the property was not available in the first place, each would have had to sort out their own accommodation.
I don’t see this being a benefit-in-kind position. They are joint owners of this property.
If it comes to a Fair Deal application for any of the six, I would expect that their share of the property would be considered as an asset. However, given the ownership structure, it would probably be that the HSE would not be happy to extend a Fair Deal loan against the value of that asset. The current impasse – especially if it proceeds to formal legal dispute – would only raise red flags for the HSE about its ability to secure repayment on the security after the death of the person entering nursing home care.
If no Fair Deal loan were available, the person going into care would have to meet the 7.5 per cent annual cost against that asset from other cash resources.
In any case, I don’t think anything is to be gained by letting this drag on. Already, the two residing siblings are digging their heels in despite having signed agreements to the contrary. If that remains the case, and assuming those caretaker’s agreements are watertight, I think one or more of the other owners are going to have to test them by taking formal legal steps.
If it ever got to court, I would expect the end result would be an order to have the house sold and the proceeds split between the six siblings. However, by that stage, legal costs could have eaten into the value of that disbursement.
Going legal within families is never something to do lightly but there are times when it can be cleaner – and less expensive – in the longer term.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email firstname.lastname@example.org. This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into