My mother has left the family home to the 3 children - has any one had experience of how this can work? ?

Question

My mother has left her home to my sister, my brother and me. The house, which is by the beach, has been in the family since 1915. It was always a summer home until my parents got sole ownership and they moved here permanently 30 years ago - it then became the family base. Now that my mother has died we are talking about how we are going to share it. Both financially and practically.

For example, my brother suggested setting up a corporation with everyone getting shares that we were able to pass on to our offspring - any one know about this?

On the practical side, does any one have experience of running a house 3 ways re day to day bills, cleaning, restocking etc?

Answer 1

Don't need a lawyer, and stay away from LLCs unless you want to conduct it as a vacation rental, and then only do so for liablility reasons. LLCs can complicate your taxes and other things as well. LLCs are not a corporation. An S corp would actually have shares with the asset being the house. You would have to transfer the house to the LLC or S corp and that will cost you money as well.

With your mother leaving the property to the kids, you each already own it as Tenants In Common. This means you each own the property without division. With division, you could own 50% of the property, with your siblings owning 25% each.

If you all get along and can count on the others, you can decide which one of you manages the property if you decide to rent it. For this responsibility that person should earn the management fee of 10% of the rent, in addition to splitting the profits.

If one of the siblings doesn't really want to be involved, or say doesn't hold up their end, they can sell their part of the property to the other two. This may entail getting a mortgage though.

It doesn't need to be complicated if you don't want it to.

Answer 2

what you can do i assume the dad is gone also? i hope so cause its his till hes gone. you just put in money each time you all need soemthign and do it same and keep friends and that is ok and use it when each one decides one goes for one season and so on or each week butyou all have to foot the bill and dont' make a thing out of it caus ethat may cost money in the long run.

Answer 3

You should set up a bank account in all of your names in which you deposit money to use only for the house.  Say you rent it for a week-- the money is deposited into the bank account to use to pay the bills.  Pick a couple of weeks per year that you all plan on staying in the house and try to rent it out the rest of the time-- all the money you make renting it out will go to cover the bills.  

If you want to keep it and not rent it out, each deposit $100-300/month into an account and use it to pay the bills, if no one is staying there the water bill and power bills will be really low.  

If there is one of you who particularly wants the house, then that person should buy the other 2 out.  Have the house appraised-- whatever it appraises for divide by 3-- take away 1/3 bc that would be their 3rd of your inheritance and pay the other 2 their 1/3s

Family and land/property...etc is never an easy thing to deal with, but i hope this helps!

Answer 4

The cleanest way is to have it appraised and have the one who wants it most buy the others out or simply sell it or rent it out.

However, if you can actually share it without killing each other that might work out nicely.

For instance, using mom's records see how much the utilities, taxes, insurance, etc were on an annual basis. Then I'd add 50% and divide that amount by three on a monthly basis.

For instance, say it cost mom $10K a year to run the place. I'd budget $15K and divide by 3 to be about $400 per month each. That allows for building up a repair/upkeep fund.

If the repair fund gets overly big just draw down on it or use it the pay the monthly fees.

Answer 5

Please consult an attorney.  The idea of setting up an LLC makes sense, but someone will still need to take care of the details.  Perhaps that can be agreed upon amicably; just take care of it before it gets more complicated.

Answer 6

     this never works with family.it will only get uglyer as time goes by.agree on the value.if one of you want it.buy the other two out.or sell it and split the proceeds.

Answer 7

Ask Dave Ramsey.

Answer 8

Trying renting it out every week to people who love to vacation.

Answer 9

go ask a lawyer who deals with estates and/or wills.  

Answer 10

You could hold it as Tenants in Common with a named percentage for each person but their heirs would have to do the whole probate thing OR you might consider setting up a family trust. With a trust you have trustees, co trustees, beneficiaries ... etc etc. Talk to a real estate attorney.

Answer 11

Just be aware that one person can force the sale of the house if they want their money and the others don't have the cash to pay.  You all could be in the title with equal shares and titled so that the shares pass to survivors.