Inheriting house together with sibling...who wants to move in - WWYD?

[Anonymous]

We all agree OP - sell, sell, sell !!

[Anonymous]

OP ~ please resurrect this thread later and tell us how it all turns out, ok?

[Anonymous]

Sell it. My mother is in this situation with her childhood home. One sibling (who has perpetual money problems) moved into the house to "take care of it" while the other siblings figured out what they wanted to do. Nobody had the heart to sell it at the time so soon after my grandmother's death. Fast (or slow) forward and 6 years later the sibling is still in the house rent-free and refusing to leave, the property taxes continue to come out of the estate each year, and the other siblings are now considering legal action to force the sale of the house and the eviction of their sibling. Total mess.

[Anonymous]

So OP, you've gotten lots of advice, what are your thoughts?

[Anonymous]

Anonymous wrote:Basics of the situation are two siblings (and, by extension, their respective families) are jointly inheriting a house valued around $3m, mortgage-free. Sibling A and his spouse and child like the house, but wouldn't want to live there (mainly due to schools in the area). Sibling B and her fiancé want to move right in, settle down there, and start having children - they're fine with the local private which they could afford given the rest of the inheritance.

Sibling B does not have the cash on hand to "buy-out" Sibling A for their half of the house. They also, likely, could not afford a mortgage on half the value of the house (especially not that mortgage plus private school). Sibling B has more emotional attachment to the house, as she lived there during HS, whereas Sibling A was in college already when the house was bought.

As Sibling A, would you:
1) Let Sibling B and fam move in and just retain ownership of 50% of their house indefinitely.
2) Work out some sort of "family mortgage" or payment plan for your half of the home's value, with terms lax enough that Sibling B and fam may actually be able to afford it (likely would have to be a looooong time-frame and little to no interest to make this happen).
3) Insist on selling the house and splitting the cash with Sibling B.
or 4) Other suggestions?

Even if you had the cash to buy-out, don't do it. never do business with family. Sell it and split the proceeds. doing it any other way is just asking for trouble.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Sibling A: you had to have seen this coming. It makes me wonder if you want to be the care-taking brother and be loved for it (but still have the opportunity to be a little mad about it after the fact)

Forget it. Siblings are better off when they see each other as equals - when they respect each other.

Are you wanting to be a martyr? I truly ask ONLY because I've got to believe you've known this scenario was coming!

Ah, there you are, weird confrontational poster who invariably assigns strange motives to the OP and blames him or her for everything.. We were all having a reasoned, civilized discussion, and then here you are.

"Brother"? Where do you get that OP is male? Because OP is wealthy and successful? Talk about sexist assumptions.

[Anonymous]

Anonymous wrote:Sell it. My mother is in this situation with her childhood home. One sibling (who has perpetual money problems) moved into the house to "take care of it" while the other siblings figured out what they wanted to do. Nobody had the heart to sell it at the time so soon after my grandmother's death. Fast (or slow) forward and 6 years later the sibling is still in the house rent-free and refusing to leave, the property taxes continue to come out of the estate each year, and the other siblings are now considering legal action to force the sale of the house and the eviction of their sibling. Total mess.

What justification does the Freeloading Sibling give for cheating the other siblings?

[Anonymous]

PP here. OP, do you have kids? If so, then you have their college and their inheritance to think about. Your sibling should not expect you to put her desire to live in that house over the interests of your children. And putting it, more gently, like that to her takes it out of the realm of something just between the two of you.

[Anonymous]

I'd sell it and not feel guilty for a minute. The sibling who wants to live in it should be able to find something to buy and live in for $1.5 million. Even in DC that should buy something pretty nice.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sibling needs to buy you out, but at a good deal. Maybe not market. At least half of what parents bought it for, adjusted for inflation, plus half of what money parents put in.

Why not at market? Why should A lose money on the deal?

I agree with other PPs, if B can't fully buy out A, then they should sell. The only compromise I would possibly consider is to allow B to pay A rent (half of market value) for a period of time (2 years) to save money to buy.

Pp here, juts realized the Problem is what if sibling sells for profit and that makes a bitter down the road?

Was there additional money given in the inheritance?

OP here - Yes, there was. It would be enough for B to send kids to private and cover some/all college expenses for 2-3 children, but not enough to buy out A's half of the home value. Even if it did cover half the home value, B would have to somehow afford private school on top of that given the neighborhood (although I suppose she'd be living mortgage-free, so maybe do-able). Also, most of it is locked in a trust for the next 10 years for Sibling A and 15 years for Sibling B, so trustee (family friend) would have to be on-board with her plans.

Sib B is an excellent negotiator for her "half" of things. Not so much for Sib A. Sib A is a doormat to even consider all this based on an "emotional; attachment" LOL..

OP here - maybe so. I tend to see it as considering it based on an interest in preserving my good relationship with my sister and not being sure it's worth fighting over between us.

That said, PPs have raised concerns I'd not considered (liability issues, for example) which makes me think that pushing back on this is the best course of action.

OP, you sound like a good person. the problem is that the best way to preserve your relationship with your sister is probably selling the house, not letting her get a home she clearly cannot afford. on a $3M home real estate taxes alone are probably over $25K a year, and the maintenance is very expensive. you say she can afford a mortgage of $500K with her fiancé. the fact that you need to I include a stranger into the picture is also a problem. what happens if they divorce in a few years (and the fact that the fiancé, who does not have an emotional attachment to the house is willing to free load on you does not bode well). sounds like your sister makes less than 100K a year. once she has kids, she will not be able to afford that house. are you ready to step in and pay the RE taxes when she cannot? based on her current behavior, she can expect that the "rich" sibling will step in and help her again to prevent the loss of the house. basically, if you sell now, it's going to be painful but eventually your sister will come to her senses (she cannot afford the house, this is the reason she does not get it). if you don't, you are going to put money between you and your sister for a very long time, and the relationship can really sour. good luck

[Anonymous]

OP: we are a little older than most posters and have been through this several times with ourselves and with friends. After a parent's death, there are so many strong emotions swirling around. Those who have given in to unreasonable demands/requests tend to bitterly regret it later on. Sometimes it is only a little thing -- like mom's china set. But it tends to fester, and bit by bit it wreaks havoc on the relationship. With an asset such as an expensive home there are so many variables as other posters have noted. It is much better, after the fact to be able to say: I did the fair thing (sold and divided) or I did the simple thing, than to lock yourself into a complicated relationship with lawyers, trusts, administrators and so on. If you would have to sell your own house to finance your sib to have your parents house, then you are really not in the income bracket for something so complex and expensive. Even with a lawyer managing a trust and so on and so on, there is always the "feeling" that it isn't "fairly done" Check out "being executor of an estate" on google and you will see what I mean. Best of luck.

[Anonymous]

"Sibling A and his spouse". PP, nothing sexest here. I read. The OP asked for opinions, I comment to the poster. I don't, like you, randomly bash others.

[Anonymous]

I would sell, no question. I say this as someone who helps my sister and her kids financially on a regular basis. We have considered helping her buy a house, but ultimately decided against it because 1) she cannot afford the upkeep at this time, and 2) she has not proven herself to be financially responsible, so we fear that it would ultimately be like throwing money down the drain if the house is repossessed or if a lien is placed on it due to not paying property taxes, etc.

If your sister cannot afford a mortgage, there is no way she can afford the taxes and upkeep on a $3 million dollar home -- that's just crazy. It is going to be a headache for you for years to come, if you go along with this arrangement. There is absolutely nothing to feel bad about, either. She will pocket $1.5 million which she can use to buy a house free and clear if she wants.

[Anonymous]

If your mother had left just cash in equal shares to you and your sister, and your sister asked you for 1/2 of your 1/2, what would your response be?

Yes - houses can have a lot of emotions and memories associated with them, but these still exist even if there is no house. Was your sister living there when your mother passed away?

Also - your mother could have made the decision to sell the house to your sister below market, but she didn't. Your mother also could have given your sister the house, and you the cash. But she didn't.

It doesn't seem that your sister is considering her relationship with you in asking for you to gift her your inheritance.

If you want to give her that gift no strings attached - then do it. Otherwise, sell the house.

[Anonymous]

Anonymous wrote:"Sibling A and his spouse". PP, nothing sexest here. I read. The OP asked for opinions, I comment to the poster. I don't, like you, randomly bash others.

Completely my bad! Many apologies, PP. I was wrong. Guess I was sexist myself.

Signed,
Egg on Face