This article addresses two financial dilemmas: a property inheritance dispute and managing short-term savings. It offers advice on how to navigate a situation where a sibling is buying out the other heirs and how to best utilize funds held in a bank account for a six-month period.
I have inherited a property with my two siblings. My sister would like to buy the other two of us out. Borrowing money would be necessary, but as the property is in poor condition, she is carrying out improvements (at her cost) before requesting a loan. My brother and I wanted to give our sister ample time to buy us out. But almost two years have passed, and improvements are nowhere near finished.
Do you have any advice on how to make this fair for both sides?It’s quite reasonable for you to want this estate finalised. It can often take some time to liquidate all the assets in an estate, but two years, given the circumstances you’ve presented here, appears ridiculous and, frankly, disrespectful. I suggest you voice your concerns with your sister, making it clear that you want the estate wrapped up within the next few months. If she’s unable to buy you out, then the property needs to be put on the market. It may be worth talking to the solicitor who is assisting you with the estate to explore what options you have if your sister continues to delay.I sold my house in mid-December. I intend to buy another home, but not for six or more months, and I’m wondering what I should do with the money in the interim. Currently, the funds are in the bank earning 4.85 per cent. I have done some research, and there are “investments” that range from bank levels of return to a crazy 24 per cent commercial property development. I would call myself conservative with money, with a low to moderate appetite for risk. I have seen and liked bank bonds (Barclays are offering 10 per cent) and reasonable second mortgages (offering around the same).Thanks for your question. Given a six-month time frame, I would advise you to simply leave these savings in the bank. At 4.85 per cent, your money is keeping pace with inflation after allowing for some of that interest to be paid out in tax. Taking on more risk to increase your returns would likely have a fairly insignificant impact on your purchasing power over such a short time frame, and capital losses here would be pretty painful.An investment’s expected return informs you of the level of risk. There are certainly times when we want to take on risk, it is essential to grow our wealth. However, I would have thought in this case, when we’re talking about money to put a roof over your head, that capital stability would be the priority.My wife is 57 and earns $40,000 per year. She can salary package meals and entertainment in such a way that she pays no tax on her income. She wants to contribute as much as possible to her superannuation fund over the next five to10 years. My income is enough to cover both our budgetary needs. Should she make these contributions before or after tax? If she is paying 0 per cent marginal tax rate, then there would be no value in her making before tax super contributions, as these would have 15 per cent tax applied when they reached the super fund. In the circumstances you have outlined here, it would seem she would be best off making these contributions after tax (i.e. non-concessional).Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions. Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday
INHERITANCE PROPERTY SIBLING DISPUTE SAVINGS INVESTMENTS RISK FINANCE
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