My brother bought mother's house in 2010 when mother couldn't wait to get rid of the house. She was of sound mind, but was unable to handle the process and had my brother do everything. Brother is out of state and she wanted him to buy the house and be here as much as possible. the house was appraised, the repairs were evaluated and my brother got a loan for what he could afford. My mother "gifted" the balance of the house to him, and he owned the house. Mother died, brother fixed house and is now realizing 110 thousand dollars profit. We share the estate, but he chooses to keep the profit as his good luck.
I can't imagine mother telling him to keep all the money after the deal she gave him, but she's not here. I accept this because I don't have a choice, but I worry about future dealings with my brother. My gut tells me this is wrong. Am I wrong?
A gift is not the same as inheritance. ask the lawyer
Relatives cannot fight or sue if there is proper legal process.
You cannot hide the house from Medicaid. Don't even try to.
Do you expect that Dad will need Medicaid assistance for in-home care at some point?
IF the house needs more repairs than what the house is worth right now, I would walk away. Sell it as is, make sure Dad gets all the money in his accounts and nowhere else.
You have to be very careful with the finances to avoid legal problems with other heirs and avoid rejection from Medicaid when the time comes.
Let me give you some ideas about this type of flip and the typical costs:
Full kitchen renovation: $60,000
Bathroom renovation:
Master bath: $45,000 (without replacing cabinets)
other bathrooms: $15,000
Wood floors: $18,000 for about 2,000 sq ft.
Of course there is a lot more expense if you need to do stuff like remove cottage cheese from ceilings, repair and repaint, open the kitchen to the family room (especially if there is a load bearing wall.) New roof, new landscaping, new carpet, new light fixtures, new appliances, new sinks and toilets, new mirrors, new cabinet knobs, new plugs and wiring to bring the house up to code, new windows, there's a lot of money that goes into repairs and you have to spend many hours picking out EVERYTHING for the flip. A lot of times you have to stop midstream and re-choose items because something came out different than what you expected. It's not unusual to have to change tile and granite suddenly when cabinets arrive nice but in the wrong finish. You also have to spend the entire time analyzing what the market wants and make the flip fit that or the house will sit on the market and you have to pay taxes and insurance on it until you can get rid of it. That means going to new houses and seeing what people are buying, while at the same time making sure you don't overspend on the house you are flipping for the neighborhood it is in. Honestly, I think it likely your brother more than earned his $100,000.
I think he probably thinks in terms of money before people and makes no exception for family. I think in terms of people before money. In fact money is pretty far down on my list of priorities. It's probably why I don't have much! And why I can be taken advantage of. I haven't been paying enough attention. That will change.
I can even talk to him now. Oh PS the guy he did business with won't talk to me or my husband anymore.......I should have known better. The reason why I told this story is...Sometimes when you think you deserve something...not everyone feels the same way. Check it out, what happens if your bother gave you part of the money and later a lawyer told him he didn't have to and now, it's him thinking he should get the money back from you....ahhhh, that would have been a good twist.
As for the future, My brother and I are trustees on my Aunt's estate. Up until now I have handled the money and managed things. I have never told him how much money Aunt has because I didn't want him to start planning what he'd do with the money. I have a good relationship with the accountant, the financial advisor, the lawyer and the bank. I'm going to tell all of them that I do not trust my brother and then do what they recommend. My Aunt is horrified at what my brother did. She kept saying my mother wouldn't want that. That it wasn't fair. I am so blessed to have my only remaining family member on my side. I know I will need to protect myself from brother. I'm grateful to everyone here who patiently spelled it out. It's hard to tell people their loved ones are not trustworthy. I went to Aunt's house today and photographed everything. I'm calling the lawyer to see what is permissible about the contents of her house. She is in assisted living, and now that my mother is gone and my brother is selling out and leaving, he wants to take some of her things. He bought a big trailer to load things up from his house and from Aunt's house. I didn't like the idea, but in the past if I object they do what they want anyway so I'll tell the lawyer first thing in the morning and let her advise me on what to do.
When my father died my mother tried to give my brother dad's truck, he got all of dad's guns except one, all of his tools and lawn equipment and other things of significant value. I got zero, except for his Timex watch. Was this fair? No. It was a sign of things to come and the mean and dysfunctional situation we have.
No you brother is not nice but seems to be entitled. Like someone else said, let it go but remember your brother showed you who he is. You need to believe him.
You mother sided with your brother in ridiculing and scorning you, while you were the unpaid caregiver?
I'm sorry, it it really does not sound like you came from a very nice family. Now that Mom has died, break out of that dysfunctional situation and make a good life for yourself.
Sorry twinflower, sounds like it was a decision at the time that seemed fair to mom for whatever reason and your brother lucked out.
If you love your brother, and he is not gloating over this, then let it go if you can. It seems that if she were trying to protect from stepchildren then she could've handled differently and legally included you in some way.
I appreciate the information without the drama. It's hard to look at something when you're not allowed to see the facts and then come to any rational conclusions. I'm never sure if my brother is honest or not. It sort of comes and goes and is confusing.
As for the agreement, there were two that I was involved in. Both were simply ignored at some point.
The first agreement was person to person to sell the house at fair market value and mother would have the profit for her care. (I was the unpaid caregiver and mother was in assisted living). My brother decided to buy the house and I was not consulted in the change of plans. When I found out (on the way to list the house) I asked the thinking, I was told they were going to remove it from the estate so brother and I could split the money. So that was the 2nd agreement, but it changed. From there, I was not included in the dealings as my brother worked it out with my mom. My mom kept telling me different things. I would have half of the value of the house, I would have an apartment in the house, I would be able to buy the house, etc. etc. When all was said and done, I was no longer included in any of the thinking. Intellectually I don't have a problem with any of it. But when my gut goes sideways, it makes me think there is something there. There are no bad feelings to patch up because I have not said anything about this to my brother except to ask if he considered the house part of the estate and if he remembered the conversations about taking the house out of the estate. He said no. Back to selective memory!
I'm sorry that you and your brother weren't able to come to an agreement when it came to buying and fixing the property. That would have been ideal. Since he did buy and fix it for market, though, the money is legally his. I hope you are able to patch up any bad feelings.
I guess all I'm left with is the fact of the sale and the fact of the profit. And my brother sees only that he bought the house, flipped it and made a killing. It just all seems a little squishy to me. Oh well. I know people often rearrange things to suit themselves. Selective memory, huh? thanks for the reality check.
It sounds to me as if your brother did what your mother wanted him to do. If Brother owned the house at the time of Mom's death, then the house was not part of the estate.
I understand your disappointment, but I think it would be very unfortunate if you let this incident come between you and your brother. There doesn't seem to be any question of him tricking Mom into this situation, and he did have to do the work to reap the benefits.