The brother who stayed got roommates to help cover the mortgage payment. Then he got married. “When we started dating,” the wife said, “I encouraged him to take care of this with his brother, but I tried to stay out of the details, as it was not my issue at the time.”
The feud: Time has passed and the home, which the couple now live in, has increased in value. And although no sale is pending, the brother who moved is making a case for what he’s due based on what he thinks the house is worth.
But here’s the thing: After getting married, his brother refinanced. His twin is not on the new mortgage and, in fact, signed a “quitclaim deed,” effectively transferring his ownership and rights to the house to his brother. In exchange for agreeing to the quitclaim, there was a verbal agreement that he would get some money later. No dollar figure or percentage was specified.
“An email from the prodigal brother indicates he believes he is owed over $150,000,” the wife wrote. “I think he has lost his mind!”
The wife’s got a good point.
“It does not consider the total cost of ownership, to which he has contributed a fraction,” she said. “It overlooks the additional equity coming from extra principal payments made since we married, recent improvements, etc.”
She added: “To be candid, I don’t think someone who left the property and abdicated [his] responsibilities for it years ago should have much right to the equity. My husband and I have struggled to come to a successful conclusion on buying out his twin brother.”
Before you rush to send me a letter or email, I know: Whatever agreement was made was too vague. And from an outsider’s view, the brother didn’t put in enough sweat equity to deserve much from any future sale. But since when does common sense keep people from thinking they’re entitled to more than their fair share?
The dilemma: You might not think this should be an issue, but experience in teaching the couples class has taught me that the mix of money and family can be explosive.
“This is my husband’s twin, and they have a very close bond that he would never think to challenge,” the wife wrote. “To him, it’s family. My husband is floundering to bridge what appears to be a widening gap.”
The bottom line: “I do think we can come to an agreement, but it’s being so far apart that concerns me,” the wife said.
I’m with the wife on this one. But what’s right isn’t always what is the best thing to do to quell a brewing financial storm.
Before there is a sale, they need to settle this issue. If the familial bond is more important than money, offer to give the brother back his down payment. For good measure, you might add a modest return, say, $5,000 or even $10,000. If they can afford it, buy him out now. Or they can agree to give him a specific percentage of the equity when the home is sold, minus the couple’s financial input.
But I will add this: If the house is sold and the brother and his wife both agree that parting with a larger sum of the proceeds is what’s needed to maintain their relationship with the other brother, it’s OK to give him more. The sorrow of being right might not be worth the price of a broken bond.
This is what my husband and I have learned. Couples may never really master money. Often, the best they can hope for when there’s family, money and conflict involved is managed peace.
Michelle Singletary welcomes comments and column ideas. Reach her in care of The Washington Post, 1150 15th St. N.W., Washington, DC 20071; or singletarym@washpost.com.
