Q. My father passed away 15 years ago and my mother five years ago. My sister has mental health issues and as she is of retirement age, we all thought she would be in residential care long ago. However, she continued to live at home and in my mother’s Will, it was specified that my sister could live in the family home for ten years, at which point it could be sold and the proceeds be split equally between my sister, my brother and I. My mother also left my sister some money. I don’t have any issue with the Will, except that I don’t think it has worked out well for anyone. The house is quite run-down. My sister has spent all the money and is in debt to the council for rates, a building contractor and who knows who else. I have already paid for a new roof last year as it desperately needed it, but I can’t afford any other expenses. I am worried about her but also, honestly speaking, I am worried about my inheritance.

I think a fair situation would be if we sold the house, repaid all the debts and then from what was remaining, my sister could take a 50% share. This would be more than enough to buy her a modern home in a care facility, as well as pay for her ongoing expenses. My brother and I would each have a 25% share. I’ve talked to her about it, but she is not open to moving. Is there anything I can do?

 

A.  This sounds like a difficult situation, but unfortunately not an uncommon one.

In theory, providing in your Will that a loved one can live in your home for a period of time is a good idea. It provides stability for that person when they need it, and the assets can still be passed down to the “final beneficiaries”.

However, in practice it often doesn’t work well for the reasons you describe; people are unable to take care of the asset adequately, either because they don’t have the financial means or the mental capacity to do so. This can be stressful for the final beneficiaries and for the person occupying the home.

While the deceased has tried to consider everyone, this situation sometimes ends up being quite difficult for the people left behind.

 

What are your options

The council will ultimately force a sale of the home (a rating sale) if the rates remain unpaid. They don’t like to do this, but it does happen.

I would try talking to your sister again and explaining the consequences of the rating sale. Also explain your concerns about her being unable to repair anything serious that goes wrong with the home.

On the face of it, your proposal sounds like it could be a good option for you all, so you might be able to reach a resolution.

If you are unable to move forwards, I suggest you engage a lawyer to assist you. Your sister should also have a lawyer to represent her interests. This can be paid for through legal aid if she is unable to afford one, or in some cases beneficiaries legal fees may be met by the estate. There will also be a lawyer appointed to represent “the estate”.

 

Typically, there would be letters exchanged between the parties, with the hope of reaching agreement. If this is unsuccessful, then you might have one or more round-table meetings with your siblings and lawyers to try and reach a solution.

If you still can’t agree, then you could apply to the Court to have your case heard. Bear in mind though, it is likely it would be at least a year before you went to Court and as with any litigation, it would be expensive as a reasonable amount of legal work is required in preparation.

There might also be limitations in the claims you could bring as it has been some time since your mother passed away. Some claims such as those under the Family Protection Act 1955 have time limits and generally must be brought within a year of probate.

It is also difficult to predict what the Judge’s decision would be if you went to Court.  Most cases involving Wills are settled privately between the parties and don’t progress to a full Court hearing. Therefore, there aren’t a lot of similar cases where you can review the Judge’s decision. Situations of this nature also tend to have unique circumstances.

I recommend that you try to settle the matter yourselves or with help from your lawyers. This is your best chance of reaching a solution that you can all live with and most importantly, the best approach to preserve the relationship between you and your siblings.

 

Conclusion

People prepare their Wills with the best of intentions to look after their loved ones. It sounds like your mother thought of all of you when she prepared her Will, and in particular of your sister’s special circumstances. The difficulty is that no one can predict how well people will be able to look after themselves in the future.

Well done trying to find a solution that is fair to all of you. It will be easier to have these conversations now rather than when a rating sale is looming, or the house requires expensive repairs.

 

This article was first published in the NZ Herald.