If you are knowledgeable in this area and willing to PM with me, I would appreciate it. We are just getting started, and trying to think through the steps involved.
We assume there is work for an attorney to do, but also wondering what we can do ourselves (with proper guidance from an attorney.)
We want to think through things on the front end to avoid arguments further down the road.
Property and future owners are not all residing in the same state.
If you want to post and throw your 2 cents in, feel free. But I am most wanting to connect with one or two people who I can PM off this forum. I will not get into specific details on this thread.
If by “incorporate” property you mean you want to transfer the title to the property into an LLC, you first need to form the LLC and then do the transfer (for example, by a quitclaim deed or by a warranty deed - forms for these are very state specific). Or the LLC can buy the property. An attorney specializing in trusts and estates or real estate should be able to help with both. Good luck. These areas of law are very state-specific. Also, keep in mind that there could be estate and gift tax implications. Again, good luck. Oh, and finally… if there is a mortgage on the property, contact the lender. Not all will be happy with such a transfer. Also, the LLC now needs to get a new insurance policy. Have a chat with an attorney to figure out at least some of these logistics.
This book was given to me too late to help our family shared property situation…but it had many options to consider and the pluses and minuses of each option. It candidly talks about the pros and cons of joint ownership and how to navigate this for current and future generations.
I think it’s a must read before you enter into this endeavor.
We declined to be part of joint ownership of family property. The folks who ARE the owners have all told us we were the only ones who made the right decision. Theirs is a trust that can only be dissolved by all parties agreeing…and all parties include all beneficiaries of the trust…which is the whole bloodline for five families…about 30 people now.
Agree with the above—please proceed with your eyes wide open about options and potential consequences. The Family Cottage sounds like a book we need to read as well. We DO have some jointly held family investment property with a relative. We have been fortunate but know it can be VERY challenging and have to figure out what to do for the future ourselves as this generation ages.
Totally agree with @thumper1Saving the Family Cottage is a great book. I am trying to persuade DH to let us get out of part ownership of a ski condo that I haven’t stepped foot in since the boys were in high school. I’m pretty sure I’m never downhill skiing again - and there’s another much more rustic cabin I love also in Vermont. He doesn’t care that it never makes much rental money because my brothers take all the good weekends and there are constant repairs and assessments. He thinks the boys might want it some day. No I don’t think they will.
Is it commercial or residential? Which person is going to be responsible for collecting and distributing the rent? Who is going to be responsible for upkeep? Does everyone want to keep it and collect rent, pay taxes, upkeep and maintenance or sell it and split the proceeds and be done with it? Is everyone going to be an equal share owner? Is the owner who will be responsible for upkeep and maintenance going to be paid for these services by the other owners?
This is a beach condo that has been in our family for over 30 years. All but one of the siblings want to participate in keeping the condo in our family. The remaining sibling will take a cash alternative option. We want to issue stock shares (at least we THINK we want to do that) so that individuals can sell their shares without having to sell the condo.
I will definitely buy the book mentioned. We are still friends after clearing out a relative’s hoarded house (NOT the beach condo) and survived the funeral still as friends. So we have special memories, but this will have to be a rental place that earns its expense money. Family will have to use it in off season.
We know there will be struggles, but we hope by setting it up properly on the front end we can at least be sure that legally we are in good standing with the state.
Thanks to each of you for commenting with your thoughts.
ETA: Bought on Amazon with a $5 discount thanks to a post in another gift thread! I’ll be reading it by Saturday.
Sell the property and divide the proceeds. That’s the easiest and most cordial.
If you do decide to keep it, put in into an LLC. Have a lawyer write up a good LLC agreement. Have each parties’ lawyer review the agreement. Under no circumstances should you allow an LLC member sell their shares to an outsider. Since you’ll renting it out – it’s a business, so treat it as a business. Good luck.