Is my brother right to withhold profit from Mom's house?

How much of that profit do you think he earned? If he (or you or Mom) had sold the house as-is, instead of giving it to him to fix up, how much profit would there have been to split now?

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.

This wouldn't bother me at all. If my brother bought the house and I didn't, then the house belonged to him. Did you help him with the money he needed to make the repairs? Did you do any of the work? Sharing in the profit on the house after the fact sounds a bit like the story of The Little Red Hen.

I agree with most of what you say, and if you deduct what he put into the house and his time managing that, the profit would be around $100,000. Part of the reason mother wanted him to have the house was to prevent her deceased husbands kids from having a claim. It was supposed to be split with me in the beginning, but it all changed and that thinking was lost, so I didn't mention it, but perhaps the evolution of the thinking that wasn't in my favor made my gut go sideways. My brother didn't remember any of those conversations.
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.

Your story reminds me a lot of what happened with my own cousins, and it really wasn't fair. My cousin was her mother's caregiver. Years before, when her husband was alive, my aunt's husband willed the house to my cousin's brother. He wanted to make sure his own son didn't have any claims on the house. When my aunt died, it left my cousin homeless. So there is this house that is owned by her brother that has no one living there. Did he offer it to her? No. I don't know all the family dynamics that went into this. From the outside it looks bad, but it is the law. I'm sure if I talked to him about the why I would understand better why he feels he is entitled to the house, though he doesn't need it.

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.

What a raw deal for your cousin. How do caregivers get to be so disrespected?
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!

Twinflower, it might make you feel a little better if you carefully calculate the profit on this deal. Many times, people look only at the purchase price and the selling price on a flipped house, and think that the difference is clear profit. Actually, you would need to consider the cost of materials, time spent, payments to contractors, interest on the loan, taxes on the property and utilities paid during the ownership period. I am assuming that your brother did not live in the house during this time. Also, there would have been closing costs on each end of this deal, even if the sales were done without a realtor. Any profit that your brother may have realized by owning and fixing the house would belong to him. The part that bothers me a bit is your statement that part of the house that exceeded what your brother could finance was gifted to him. Determining this amount would have required an appraisal at the time of the sale to your brother. It would seem that this should be shared with you. However, if this amount exceeded the allowable gift tax exclusion, there could be tax consequences (and even penalties) if this "gift" was not reported, and your brother may not want to bring this up now.

Thank you for your comments. I appreciate the perspective. I wasn't shown the appraisal or the costs for repairs. I went by what he told me about the amount of the profit. My brother is seldom straightforward and forthcoming. It wouldn't surprise me if there was something a little dicey in the "gift" part of the sale. Mother was like that too. Between them, they probably cooked up something.
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.

Anybody who bought a house in 2010 took a huge risk. Properties were not selling, especially properties that needed repair. Not all housing markets have bounced back. This could easily have been a big loss. I also agree it was not all profit, not with upkeep, insurance and taxes on top of the repairs. He got lucky, and he put sweat into it. Let it go.

Thank you for all your comments. I would have shared the profit with my brother and I had to twist my head around to see the other side. You've helped me do that. If I had the good deal , I would have known it was extraordinary circumstances and desperation (my mom's) that brought me a huge profit and I would have remembered mother had two kids who were to share equally, then I would have deducted expenses and such and split the rest. Clearly, there are people with far more orientation to business that have a different take, and I appreciate the perspective. There's nothing wrong with either view, except I feel a little left out, which may be the crux of the whole matter. My mother and brother were close and it's perfectly predictable that she would favor him and for him to take it. Thanks for your help everyone.

You said your mom was of sound mind and obviously wanted him to have it or she would have or "could have" offered it to both of you, sold to your brother, and since she gifted him some of the money could have equally gifted you an equivalent sum and lastly, could have had the discussion with both of you together that she intended for brother to place property sale as part of estate in event of her death.

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.

Wow, you're right. I was left out of all of it. And I don't know what they talked about or what the instructions for my brother were. I can't imagine my mother saying to not share, but I don't know that for a fact. My brother and his wife fought me every step of the way during the time I was unpaid caregiver to my mom. (five years). I can't tell you how many times they showed scorn, ridicule and disapproval. I can't tell you how many times my mother joined in. I think there must be something wrong with me for not seeing how awful all of this is and not protecting myself. I won't make the mistake again.

Was it just Mother's house, and had not been Dad's? I'm a little confused about why the step-children should have been excluded. My 3 step children and 2 birth children will share equally if there is anything left when I die.

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.

When your mother gifted the remainder of the value of the house to your brother, it was no longer part of the estate. So basically if things were done fairly she should have given you the value of the "gift" in money or valuables. What he earned after the fact is no concern of yours since it is his property.

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.

Yes, I will remember and prepare. I'm sorry about your Dad. I'm sorry you weren't treated fairly. It has been hurtful to realize my big brother is no longer looking out for me. There was a time that he did.
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.

I am sorry to hear you are going through all this. Its almost like you never know what angle people are coming from when there is money r property at stake. Ive seen it happen to my dads brothers and sisters over grandmas estate. Now its happening with me and my sisters. However, i believe there was/is a underlying root of bitterness and power struggle before this happened. So why should it be any different when the chips are down. Its so sad to me to hear these stories. But find comfort on this site that i am not alone. I dont like confrontation and it seems like you dont either.

If things had not worked out so well for your brother, after all his hard work, and putting himself and his credit out there.... if he had instead, been left with a loss, and in a lot of debt, would you be there for him with your checkbook?

Hah.......I hate when people get more then they deserve especially when you are at the apex. My insurance company gives an awesome perk. They have box seats for a local baseball franchise and gift them to clients...in attempt to promote business...it's really nice, food, environmentally controlled, couches, really first class. I invited my brother,his wife and 8 year old son. We normally don't socialize (normally we don't do things nice enough for them to participate) but I wanted to give my nephew a thrill. I also invited some of my prominent business owner friends....to promote the insurance company for their kindness . From that "introduction" my brother made a 3 million dollar sale selling my friend's real estate a cool 6% commission an mere month after the game.. Did I see any of that? No, he bragged about the commission to me. My response was, Did you at least call the agent for an insurance review? Oh! He said, I didn't even consider them and I just renewed all my insurances.
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.

My brother is wealthy. He owns two houses outright already. He didn't want to delve into his investments for the money to purchase mother's house. (He could have paid cash if he wanted). So he took mother's offer of a gift. The payments came out of his $5,000. /month retirement income. He didn't want to take too much of that income with the payment. My guess is, he didn't worry too much about the risk or his credit!
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.

Well.... hopefully he claimed the gift from your mother on his taxes!

Nice guys finish last.....it sucks to be last. We are on this site cause we are of the nice guy persuasion. Money is very high on the list for me but I make decisions based on kindness. I will never have as much as my brother. Husband and I work hard to make a living because that, hurts, but it feels right. That's why I hate when I see people get easy money. This monopoly game your brother is playing is easy money and rough on you. If you are going to change....please don't stop being a nice person.

Your brother sounds like a greedy guy. Money first, people second or never.

Thank you for your comment. I think I'm paranoid a little. I'm not very good at being paranoid or suspicious.

I flip houses and $100,000 profit on a flip is really a very modest profit when you consider all the work involved and the costs of bringing a property up to standard.

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.

Ok so i have a question along these lines. You can tell me if i am morally right in this. My dad wants to give me his house since my sister didnt want it.Hes living with me now but hes competent and gave it to me before he injured himself and moved in 2 months ago. We would like to buy it and then we will all live there after it is fixed up. He now tells me my sister and other estranged sisters may have to be payed off, if not now later. The house is in bad shape. Needs alot of work and since we take care of dad and they never help only take financially. Why should they want or expect anything? Is it wrong to fix it up really nice so we all have enough rooms and a better place for dad to live? Also he cant afford to live by himself w a small ss check. Even if we sell it down the line, which it would be if we had to split it with 5 ppl.and we ended up profiting? Is that wrong?

My3, get an appraisal on the house, just as it sits now in disrepair. That is the dollar value you are getting, and the dollar amount you will have to pay back if Dad goes into a nursing home within 5 years IF it is a GIFT. OR You have a lawyer do the proper paperwork to agree on the sale price and dad can hold the mortgage if he agrees to do so. That way the mortgage payments will enable him to live on his own, or pay for assisted living.
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.

Thank you so much for advice. I am not planning on him going to a nursing home though. My grandmother never had to go to one. Someone took care of her in the house until hospice came in. So if we bought the house in paperwork only, because he doesnt want the money and definately doesnt want to sell the house. If he showed that money medicade would refuse services? Is that what ur saying?

And if it is a "gift" then its considered inheritance and relatives can fight that?

My3, you say Dad gave you the house, and also that you want to buy it. I am confused. Whose name is currently on the deed? If Dad gave it to you, or you buy it from him, then it won't be in his name when he passes. How will your sisters have any claim on your house?

Do you expect that Dad will need Medicaid assistance for in-home care at some point?

my3, there is no such thing as paperwork only. see a lawyer
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.

Sorry for any confusion, NO! I definately want to do everything correctly, i dont know a thing about the buying and sellng of a house, inheritances, gifts, I Want whats best for daddy and what will make things better for him, which would be in his home. Where his mother died as well, but...doing something illegal ok r unethical is not a option for me and myhusband and kids. No way!