<p>These problems are real and often have no good solution. If you inherit a property jointly with siblings, my advice is to make very clear sell rules if not sell out immediately so that the next generation does not get stuck with the problems. By the time things get to the grandchildren level, more people are often involved and it gets even more difficult to get a consensus.</p>
<p>My SIL is very pleased that her parents are selling their beautiful beach house and moving to a retirement community. They had moved into the beach house full time some years ago, giving their primary home to their son who was married and with kids at that time. Now the other two kids are married and have families as well, and the distribution of assets is becoming complicated. The grandchildren of the first son are very close to grandparents as they were the only grandkids for many years and spent a lot of time with them. The other grandkids are babies. And there will probably be more grandkids. Throwing all of these people in the inheritance equation is enough to make anyone dizzy.</p>
<p>In many cases, in order to keep the peace, it may be prudent to sell your share of a family home for a token price with the right for first refusal if the property does go on the market. Yes, you may lose out on big money, but the chances are you will also lose out on a lot of family trouble. My friend whose family squabbled over that piece of junk rowhouse in Baltimore where two unfortunate siblings lived, never patched up the differences. By the time the whole thing went to court and the place was sold, everyone got a pittance, and the two hardluck siblings went homeless, something that leaves a bad taste in everyone’s mouths.</p>
<p>This thread is very therapeutic for me! Bits and pieces of your threads above fit our situation perfectly!</p>
<p>Also agree that it is best to leave grandchildren out of the “splitting assets” up. (unless the grandparents leave $ specifically to the kids). Once all the siblings get their portion of the estate, it is up to them if they want to share with their children (the grandchildren). </p>
<p>Families can be really complicated, can’t they. :)</p>
<p>I got rid of a free loading relative that had no where to go by finding a cheap rental for him and paying a few months rent and moving him there, giving him some money to start a new life there, being positive about the whole thing and smiling the whole time. (The joy was real, believe me.) It cost us but was worth every cent as we don’t have anyone mad at us. We are also much more careful about letting relatives live with us now. We’re stuck with the grandmothers as it is and one out of college kid who has boomeranged back home. </p>
<p>My friend loves her house so much that she is leaving it to her two kids. I think that is the absolutely stupidest thing to do. One is married, one is not. The problems this is going to cause makes my head spin, but she cannot bear to let the house out of the family, or even bear the thought of it going when she is gone.</p>
<p>My MIL is stubbornly hanging on to her properties that she no longer can administer and is a burden to us. We care about her and want her to live to a 110, but wish the danged places would burn down.</p>
<p>There is a GREAT book called “Saving the Family Cottage”. I would recommend you get a copy and read it. It has some excellent ways to deal with family shared vacation homes in terms of ownership options and tax advantages upon inheritance (if forward planning is done).</p>
<p>And you might want to see if the parents will discuss the inheritance implications with their lawyer to see if there is a way to deal with this issue prior to their death.</p>
<p>READ THAT TRUST DOCUMENT carefully IF your MIL will allow it. We declined a family trust for some pricey real estate. One reason was that we still had TWO kids in college and our value of the property was REQUIRED reporting as an asset on the FAFSA and Profile…Property was worth almost a million dollars. We never used it, and never intended to use it…and didn’t want it as an asset. We also didn’t want to be involved in being trustees of a property far away with 5 other families. It causes HUGE family drama…but we are glad we opted out. </p>
<p>BUT beware, your MIL can set this up without your prior consent and sometimes the provisions of a trust make it virtually IMPOSSIBLE to opt out once its established.</p>
<p>I just went online and requested “Saving The Family Cottage” from our local library.<br>
Question: Does this qualify as a “beach” reading ??? :)</p>
<p>cpt: “no good solution”
trying to find an acceptable one.</p>
<p>More info:
None of siblings need the proceeds from a sale. I would guess that the cap gain taxes on the sale would be very large since the appreciation is >10x original cost including improvements. Current valuations would place the House about 50-60% of peak 2006-07 pricings, if House could be sold. Many foreclosures on recently purchased 2nd homes in vacation areas.</p>
<p>Renting the House is not a good option. The House is located in an area where there are longtime owners (2nd and 3rd generations to the original builds 1920’s) although Mom bought the House only in 1970. Neighbors frowns on rentals, even summer rentals. The house that has the most turnover and neighbor problems is the house that has been a rental and owners with no heirs.</p>
<p>House is highly desirable location. About a 10 on Walkability Score but is isolated during the winter. Beautiful spring and autumn. </p>
<p>Renting a beach house is far cheaper than owning a beach house.</p>
<p>My grandmother didn’t have much. She had hospice care at home before she died, so my mother and sisters were able to visit her and she distributed various tokens that she wanted each of us to have – inexpensive jewelry, recipe cards, etc. (I’m wearing her little gold necklace right now.)</p>
<p>The one thing she had that was valuable was her condo, which was probably worth $200k. She left it to just one of her three kids, my uncle, who sold it and kept the money. (All three kids make a good living.) I know that she loved me, and I don’t think I’m entitled to anything I didn’t earn myself. We have had other issues with that uncle, but unless I were destitute and starving, I can’t imagine getting worked up about the fact that she gave it to him and he kept it. Maybe if we were talking about millions, so that a token amount from the estate would have made me comfortable for life, I would be angry that there was no sharing. But if it’s just a chunk of money, and I’ll be all right either way…eh. I don’t think it’s worth much drama.</p>
<p>Also part of the problem of a vacation - beach home is just that - that it is a temporary, likely only used part of the year home. Yet, costs continue all year around. </p>
<p>Note to CC friends: if YOU have a vacation home, please make sure that you too, make arrangements in your will for YOUR children!!!</p>
<p>This thread is very interesting…my in-law’s own a beautiful vacation property which they built about 10 years ago. They’ve already told us that when they feel unable to care for it and enjoy living in it anymore they intend to sell it. Although I understand the romantic appeal of inheriting beautiful beachfront real estate, I think my in-law’s approach is very sensible. Their first priority with their assets has been to make sure that they won’t be a burden on their children (they have 2), second to help with their grandchildren’s education expenses and third to continue with their charitable projects. Yes, there most likely will be assets that they leave to their 2 children, but there will not be fraught decisions about selling/maintaining/renting-out real-estate. (They have a primary residence as well, but there is no question that it will all be sold when they are no longer living.)</p>
<p>The over-investment of emotion into real estate can be a real tragedy. Most of the stories in this threads are not about historically famous properties (although those also sometimes become albatrosses around their heirs’ necks). The hope that sharing a physical piece of property will keep the far-flung members of a family close, in the 2nd, 3rd and further generations seems…slightly ridiculous to me. My SIL and her family will spend time with us whether we jointly own a house or not; our children will or won’t stay close based on other things. </p>
<p>My in-law’s attitude to property seems pretty sane to me. Buy it, use it, sell it when you’re done. Use the assets you have to live a good life, spend time with the people you love, and help those in need - not to try to force relationships through joint property-owning. They’ll never read this note, but I just want to declare how thankful I am to them for having their priorities straight!</p>
<p>I agree that you shouldn’t get too emotionally invested in real estate. And that may be easy if the vacation home is a relatively recent purchase. I’d imagine it’s much more difficult if the home has been in the family for generations.</p>
<p>Right. In my husband’s case, this “cottage” (and I promise, the cottage has not much value, it’s more the land, though small, that it sits on) has been in his family since H was 8 - so 45 ish years. However, the comments in the past from the siblings (“we’re not paying for anything for the cottage, let dad pay for it” or “I have no interest in having any part of the cottage” or “if it falls apart, it falls apart” ) are very difficult to think of now that they are whining to my husband that he gets ownership of it and they don’t - they also are upset that they have to “schedule” with us to use it. Serious? We should just pay for it, do all the manual upkeep, pass out keys and let you have at it??!</p>
<p>(you could probably take all my comments on this thread and place them in the "say it here…get it off your chest thread). :)</p>
<p>PLEASE don’t think that a trust is the be all end all solution to these vacation home issues. First hand, I can tell you that being the beneficiary of a trust can be like having a albatross around your neck. If you are given the opportunity…read the provisions of the trust VERY carefully before you agree to be part of it. </p>
<p>One thing I realized in our family trust situation is that the grand parents who owned the property had much more idealized memories of the place than the kids who got this in trust. The grandparents felt that each family had built “family memories” there that were like those built by them (the kids did NOT have the same fabulous memories that the grandparents had). </p>
<p>In addition, no one considered the proximity of the trustees to the property in question. One trustee lives close enough to go for coffee for breakfast. The rest live across the country, or out of the country and are lucky to be able to get there for a short time in the summer every few years.</p>
<p>Even in trust, you are coowners of this property with others and decision making especially when money needs to be spent,…can be a huge issue. Not everyone’s finances are the same. Plus if one family uses the place a lot…but the others don’t, there can be hard feelings that everyone is shouldering the burden of paying for this vacation dwelling.</p>
<p>Re: accounts to offset the costs of homes held in trust…unless you have a HUGE sum of money, it’s unlikely this is going to be a reality. And again…watch out for the provisions of how the trust is established. If it stated that upon death of the person setting up the trust that funds will be used…beware. Those funds belong to that person and very likely will be gone before they die (and that is as it should be…it’s THEIR money). But don’t expect a large sum to be left…there is always the possibility that one of those folks will need skilled care or whatever, and any assets they have will go to pay for these long before they can be used to set up an account to defray costs of property owned by a trust.</p>
<p>And mostly…check to see how this trust will be dealt with for future generations. While it may be good for you as a 50 something wage earner, the provisions may not be so favorable for future generations where full beneficiaries in the trust might be as young as 18.</p>
<p>I’m glad that we are not dealing with any of this negative wrangling in my family. Everything is split three ways as my parents intended. Granted there is no emotional attachment to their homes (these were not homes we grew up in either). As I wrote earlier, we have not yet sold their winter/vacation home in CA, only because it isn’t a good time to sell, but hope to sell it in the near future. As far as funds for upkeep or the mortgage, these are set aside from the estate money. </p>
<p>The idea of the parent selling the property before they die is one that almost happened in my case. My dad died first. My mom continued to go to CA for the winter, but found it difficult. Her final year, she only went for one week (and I had to go with her). So, then she decided she didn’t want to go anymore and wanted to sell the winter home in CA. In fact, the week that she died (which was unexpected), she had a flight to go to CA to look into putting the house up for sale. Then she died all of a sudden. But we consider the houses as just part of the estate and something that had to be liquidated, whereas the rest of the estate is money basically. There are no issues on any of this between my siblings and myself.</p>
<p>My H inherited a third of the family vacation house. It’s on the water in a desirable town in northern Michigan. His is the third generation of the family to own it: it was originally bought by his grandfather. His father later bought out his brother, with attendant acrimony when brother and wife took furniture from it. It has a lot of emotional value to the siblings, two of whom–not us–live in the state and can feasibly use it. We can’t. One of the siblings is financially comfortable. One–the family screwup-- is in danger of losing his house. Until recently, we were in a similar boat. The secure sib will not buy the rest of us out OR agree to sell the property. He would rather see us have to sell our home and his other sib be foreclosed on.</p>
<p>To make matters worse, we found that our ostensible “asset” greatly impacted our son’s FA at some schools, which assumed that we would be able to borrow against it–can’t be done–or sell it. This resulted in an FA gap that was equal to or greater than our annual income at that time. </p>
<p>At least it is now paying for itself through rentals. The secure sib shoulders most of the organizational burden of renting and maintaining it. Which seems reasonable to me, since he and his family are able to vacation there in all seasons, gratis, and we haven’t been there more than once in 5 years. If I were going to have a place like that one, it would be where <em>I</em> could use it.</p>
To me, too. My family is the farthest away from this property. Should my dh (and then our sons someday) have to pay for something they will probably never use? I think my mil doesn’t want any confrontations. If I were her child, I’d bring this topic up now, but I’m just the in-law, unfortunately. I do know that I’m not going to be very happy if we have to pay 1/5 of the taxes, maintenance, etc. for the place when it will be the closeby sibs and their families who will be using the property!</p>