Wills can bring out the worst in families

Q: My mother died two weeks ago and left her $140,000 estate to me and I am the executor. The problem is that I have three sisters who have not spoken to me or my mother for nearly five years. They were upset when my mother sold her house and furniture, and moved in with me. They wanted her to keep the house and I am sure they think my mother gave me her money. I feel very guilty and upset. Now my mother is gone I want to get back together with my sisters and their families.

Can I change the will and split the money with them? It is all in stocks and bonds.

Hans

A: Unfortunately, inheritance issues often bring out the very worst in families and it doesn't seem to matter how much money is involved. If you've behaved honourably you have no need to feel guilty. However, you should be aware that your sisters may be seething cauldrons of emotion fuelled by the death of their mother. Add in feelings of financial entitlement and you have an obstacle-strewn path as you attempt to redevelop a relationship with them.

Your best course of action is to probate the will, or have it done by a lawyer. This way you will not leave yourself vulnerable to any challenges or implications of wrong- doing. Once the estate is in your hands, you can do as you want.

However, don't try to buy a place in your sisters' lives; it likely won't work in any case. Instead, devote yourself to getting to know them again gradually. They have the right to know the terms of the will, so be prepared that they may be upset.

You have a number of options for the money. For example, you could open a trust account and give some of the stocks and bonds to your nieces and nephews.

You can also contribute to their registered educational savings plans. The lifetime contribution limit is $50,000 per child. Your gift could be a valuable part of their post-secondary savings. Giving some of the money to the children might be a nice way of bringing your family back together while still adhering to the spirit of your mother's wishes.

Q: I am 28 years old and have been saving hard to get my first home, I hope by the fall. Now I discover that the carpet has been pulled out from under me by the government with new rules to qualify for a mortgage. This is so unfair to first time buyers. Real estate will rise and I may be priced right out of the market.

Daniel P.

A: Lend me your crystal ball! Mine is much more cloudy and I just can't see the spot where it says prices will rise. You are referring to the Feb. 16 announcement by federal Finance Minister Jim Flaherty about new mortgage rules. And yes, among them is a requirement that anyone who applies for a mortgage must meet the qualifying standards of a five-year fixed rate, even though you may be applying for a lower-rate variable mortgage.

Before you get your knickers twisted, I don't think this is such a bad thing, though I do believe Flaherty is signalling that interest rates may rise sooner rather than later. He may also be hinting that the rise could be more precipitous than we average folk would like.

No one wants to pay more to borrow money, but it could actually work in your favour. Interest rates move real estate prices and a jump will affect what is currently a nearly-too-hot-to-touch market. Any cooling could more than compensate for an increase in interest payments.

Another bonus:. If you wait longer you can save for a larger down payment and 20 per cent means you don't have to purchase mortgage insurance.

Me and My Money can help with your concerns, confusions and confessions about money, relationships and life. Email alison@alisongriffiths.ca.