Q: QUESTION CONCERNING A FAMILY ISSUE, ESTATE, AND INHERITANCE
MY MOTHER OWNS A HOUSE WORTH AROUND $500,000. SHE CURRENTLY HAS A $100,000 MORTGAGE ON THE PROPERTY. THE EXTERIOR OF THE HOUSE HAS RECENTLY BEEN DONE, NEW WINDOWS, ROOF AND SIDING. THE INTERIOR OF THE HOUSE NEEDS A LOT OF WORK. MY BROTHER WANTS TO MOVE IN WITH HIS WIFE. HIS PLAN IS TO GET A $250,000 MORTGAGE ON THE PROPERTY, $100,000 TO PAY OFF MY MOTHERS CURRENT MORTGAGE AND $150,000 TO FIX UP THE INTERIOR. THE INTERIOR WORK INCLUDES A
SEPARATE AREA FOR MY MOTHER, SORT OF AN IN-LAW AREA. WHEN THE WORK IS COMPLETED THE HOUSE WILL NOW BE WORTH AROUND $700,000. MY QUESTION IS HOW DO YOU FIGURE OUT HOW THE INHERITANCE/MONEYS/EQUITY GET WORKED OUT?
THANK YOU-JOE
A: The only way your brother can get a new mortgage on the property is if he takes an ownership interest in the property or he enters into a rental agreement with your mother and she gets the mortgage and he can guarantee it. The issue is how the $400K in current equity is split between your brother and the rest of your family upon your mother's death. I would suggest you meet with an attorney and work out a plan which serves everyone's interest.
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