Want to leave my home to children equally. Is this a good idea?

slc2053February 8, 2010

Please, I apologize, but didn't know what forum to post this question in.

I want to leave my home to my sons upon my death. I want to put in my will or my trust to leave 50% of my home to one son and 50% to the other.

Here is my question..is this a bad idea because one son doesn't want to live in the home, but the other one does. However, the son that wants to live in the home will most likely move in and not be able to, or be willing to, buy the other son out. As a result, one son will get the home and the other one won't get any compensation and will most likely end up having to pay the tax bill! How can I leave the home to them equally but put some conditions in place to ensure one son doesn't hold the home hostage over the other. I hate thinking in these terms, but if these two boys cannot agree, I don't want them ruining their relationship because of a situation I put them in. Thanks.

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Sorry, but you already seem to know what the outcome would be, do you have some other asset to give the son that would not live in the house.

Any conditions you set might have to be enforced by a court of law ... think that would endear them to each other? You already know they can't agree on this ..

Another thought, have a stipulation that the executor has to sell the property and split the proceeds equally, and the son that wants to property could then purchase it and the other son would then get his part of the proceeds. Does that make sense?

    Bookmark   February 8, 2010 at 12:22PM
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One thing to consider is to have the house appraised and leave one son the house, and the other son the equal value in other assets you may have. Be very specific about this in your will - i.e. don't expect your sons to just know or understand that this is your wish. You may also want to take into account the need for repairs to your house - is the son who gets the house going to have to put thousands of dollars into necessary repairs, like a new furnace or new roof? Or is it pretty much ready to occupy? You are right to be concerned - this kind of estate issue can cause very significant stress and hard feelings, so deal with it and your kids now while you are still here.

    Bookmark   February 8, 2010 at 12:33PM
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Personally, I think you need to sit your sons down and discuss the issue and your concerns. Lots of times, family members make assumptions about what others might want, and they aren't entirely accurate. Maybe both of them think that a 50/50 split by dollar value is critical. Maybe one values a certain item well beyond any monetary value it might have. It may sound crass, but it is better to have those kind of frank discussions now and have everything out in the open.

I know that in our family, my mother is very concerned with money passing equitably to my sister and I. That is definitely not my priority. My sister is divorced and raising a kid with little financial support from her ex. I'd much rather see any money/house go to her because she actually needs it.

    Bookmark   February 8, 2010 at 12:36PM
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You can skip probate altogether with having the house set up as a TOD (tender on death). It just automatically goes to whomever you wish to have it. You'll have to check this out with an attorney to see if your state has that.

My mother did that for me, and when I was probating her will, it was appraised as to value, so that any capital gains I might have on it if and when I sell it will be based on it's appraised value and not on their purchase price.

You may be surprised at how generous the government is now about inheritance taxes and your children may not even be faced with taxation obligations.

You may also have other assets upon death you can give to the child who may not want property. IOW life insurance payments in excess of your obligations, etc.

I think you are wise in considering this now. We all should no matter what our ages. You can draw absolutely no assumptions about how estate law works. I have seen even the most loving and healthy families have horrible feuds and hard feelings over issues exactly like this. You love both your kids and you don't want to go there. If it is in your will that it's split equally there may be a forced sale to settle the estate. How they react? You know them better than anyone else.

I'm assuming you have already talked to your sons and know that one does want the house and the other doesn't. What you should probably do is go to an attorney who specialises in estate and probate law and see what can be done to equitably split your estate so that it works for both children fairly. It is well, well worth the modest cost for a consultation and setting up banking/property/stock and other assets. Even things like cemetery plots should be considered.

    Bookmark   February 8, 2010 at 2:07PM
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calliope's suggestion of TOD would only work if you were leaving the house to one person. To split ownership might very well cause a great many problems, which can be avoided by taking calliope's other suggestion by talking to an estate attorney.

I have seen and personally experienced how difficult it is to equitably distribute an estate between multiple heirs. I can't emphasize enough that when people are grieving, it is NOT the time to expect them to behave kindly and considerately towards each other, especially if the heirs have a history of bickering to begin with.

Find a good lawyer, and talk to him/her. It is money well worth spending. Too many people just assume their heirs are going to see 'eye-to-eye' on how to handle assets - an unrealistic expectation, in my opinion.

    Bookmark   February 8, 2010 at 5:55PM
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Please allow me to share a bit about what my parents have decided to do. My sister and her husband are very well-off and my family is more middle class. I don't begrudge their hard work and they deserve the financial rewards.

That said, my mom and dad sat down with my sister and me and told us what they wanted to do. Because my husband is 15 years older than myself (and he is in poor health) they want to leave their house to me. They want to be assured that I will have a place to live. My sister was totally fine with that as they have a very expensive home, a very large mountain cabin and other investment properties in Arizona and New York.

There may, or may not, be some money left over after my dad passes away (my mom died 2 years ago) but they had saved 2 lakefront lots that my grandfather had designated for my sister and me. I told my parents that I thought it was fair that my sister should have both lake lots because they were roughly the same appraised price as my parents home.

It is all out in the open. The changes have been made in their living trust and we both know what to expect. I think they were very wise and both my sister and I have documents from the lawyer that we had to sign agreeing to what my parents wanted so there will be nothing to disagree over.

If there hadn't been something of equal value for my sister I would have wanted them to sell the house and divide whatever was left equally.

We understand each other and are happy about the decision.


    Bookmark   February 8, 2010 at 10:59PM
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I think you need to talk to an estate lawyer, with or without your sons. All this speculation by complete strangers is nice, but the laws where you live may impact what can and cannot take place and from personal experience, if you don't have someone like the lawyer talk directly to your sons about how the law requires things to be handled in certain ways, one or both could end up (later on) resenting you or the other brother. This way the onus will not be on you alone to be the "messenger" of how things are left, and other issues like taxes, etc. that accompany these kinds of wills will be dealt with properly.

    Bookmark   February 9, 2010 at 5:36AM
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I think you need to talk to an estate lawyer, with or without your sons. All this speculation by complete strangers is nice, but the laws where you live may impact what can and cannot take place and from personal experience, if you don't have someone like the lawyer talk directly to your sons about how the law requires things to be handled in certain ways, one or both could end up (later on) resenting you or the other brother. This way the onus will not be on you alone to be the "messenger" of how things are left, and other issues like taxes, etc. that accompany these kinds of wills will be dealt with properly.


    Bookmark   February 9, 2010 at 7:02AM
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If one son lives in the home, and is only half owner - this could cause issues as described further below. Instead, (IMO), the home probably should be sold and the proceeds split between the two sons. If one son wants the home, he could be the buyer...but the sales price to be market price based on one certified appraisal that is 6 months or newer. However, if they brothers do not agree on the appraisal price, then a 2nd appraisal could be gotten and then the market price to be the average of the two appraisals.

ISSUES that could arrise if both brothers own the home but one brother lives there

#1) The brother that lives there (LIVE IN) should pay half market rent to brother that doesn't live there. If not, then could Non Live-in evict him for non-payment, etc even if he is only half owner? This could be a real problem.

#2) Both brothers pay exactly half of tax and insurance bills. Live-in brother's half does not get reduced by the rent amount. What if one pays but not the other. Then the other is forced to "cover" for his brother. Then there is money owed which means conflict.

#3) Who pays for repairs/maintenance/Upgrades? Ideally, this should be split. However, I could see the live-in brother adding all kinds of non-necessary things that are not standard maintance. Such as decorating, or washer/dryer that he uses, or a pool or barn or garage that is for his use. Or charging his brother for his own sweat equity for doing the painting himself and charging the brother half market price for a painter.

#4) What is live-in doesn't clean or fix to non-live-in's standards. or live-in decides to raise pit-pulls or has 3 roommates. You then have major conflict.

#5) what if live-in has been there 10 years but the other brother is ready to retire and wants the home sold for proceeds. But live-in wants to stay there. With this arrangement, the non-live-in could NEVER get his equity as it is a forever home for the LIVE IN.

#6) what if Live-in has a child and the child grows up and live-in decides to let the now 20 year old live in the home for free (while live-in moves out but does not tell his brother). More conflict.

Just sell the place and give them each half. And be careful about having one of them (but not the other) be an executor. this will also cause conflict even if they are cordial now.

    Bookmark   February 9, 2010 at 9:55AM
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Before my parents died, we all talked about what the estate settlement would entitle. The house and a modest stock portfolio was left to my two brothers. I actually don't know the terms since I did not receive anything. I am much better off than both of my brothers. My income far exceeds both my brothers together. I was very comfortable with not receiving anything.

The money that I would have received would not have changed how I live. But the money that my brothers received may be the money that allows them to send their kids to college comfortably versus my neice and nephew borrowing to the hilt to go to college.

If you think your sons can come to a reasonable agreement, you should involve your sons in the estate planning. Talk to your kids!

My MIL died not that long ago. My FIL never talked about the terms of his will. I think this is a bad idea with 4 siblings in the picture. My DH and I are fine not to receive anything. BUT the two sisters (my SILs) already had a fight over their mom's jewelry.... I do not want to be in the room when that will is opened.

My FIL is an emotional wimp. He cannot talk about anything that has an emotional undertone. The way his wife died was terrible due to his inability to accept that his wife was dying.

I don't know what kind of person you are but have some emotional courage and talk to your sons and give them the "gift of easy transition". My father and mother gave us that gift to us.

    Bookmark   February 13, 2010 at 9:00PM
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