Inheritance

InheritanceCategory: FinanceInheritance
Ella asked 3 years ago

Background.
Moved to Australia in 1991 and built up equity over the years.
Asset in question is a house value at approximately $550,000. It is jointly owned under mother and fathers name with no mortgage listed on the title.
Father passed away with no will in place therefore mother is wishing to organise her will to protect the asset.
Brother 1 has been contributing towards household since 1994 and according to him has paid $369,000 up until the year 2005. In year 2005, he moved out of the house and father paid brother 1 a total of $150,000 as an agreed amount.
Brother 2 has been contributing towards household since 1996 and according to him has paid $360,000 up until year 2011. In year 2011, he also moved out of the house and father paid brother 2 a total of $190,000. Brother 2 engaged in a home loan contract for his own property with his wife and kids and provided $114,168 as a private loan arrangement for father to pay in his new home. Agreement was to pay $750 p/month. This was paid up until Dec 2016 and no further payments have been made towards the private arrangement. The balance outstanding is $70,000.
Sister 1 moved out in 1995 and has made no contributions towards the household.
Sister 2 was living in the same household as brother 1 and brother 2 up until 20xx and in total paid $63,000 and $0 payout.
Sister 3 was living in the same household as father until 2016 when she moved out. She paid total of $36,100 and $0 payout.
Father intended to prepare will after his trip to Afghanistan however he passed away before this could happen. Before he died, he said he considers the payouts to his sons ($150,000 and $190,000 respectively) as 1 share of their inheritance. There are several witnesses to this comment, including brother 1.
Issues are:

  • Brothers argue they sister 2 and sister 3 should not receive the full contribution they made. They say sister 2 and sister 3 should receive the average of their return on their contribution which was approximately an average of 40%. Brothers also say they should receive 2 shares and sisters receive 1 share of father’s remaining inheritance.
  • Sister 2 and sister 3 argue that one of 2 options be employed. Either:
  1. Their contributions are paid out separately ($63,000 and $36,100 respectively) and then boys receive 2 shares and girls receive 1 share as per Islamic law
  2. Boys should accept their initial payout they have already received as 1 share and the total of the inheritance ($550,000) be divided into 5 with equal shares amongst all 5 children.
  • Sister 2 and sister 3 also argue that under Islamic law, boys are entitled to 2 shares and girls to 1 share as a general principle which assumes the girl has received a dowry when they get married. However, the dowry sister 2 and sister 3 received was minimal and incomparable to their contributions to the family household prior to marriage so they are questioning whether this principle would apply to the circumstance.

Question is- how should we divide the asset fairly?