Author Topic: Inheritance Drama: You Got Any? Stories Wanted.  (Read 1022211 times)

SwordGuy

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1950 on: January 22, 2020, 06:31:02 PM »
I dread my mom’s passing. Mainly because I absolutely adore her, but secondarily because she and my (now-deceased) father made me and my two siblings co-executors and, to make matters worse, co-owners on a transfer on death deed for their house. And one of my sisters has resided in said house for > 30 years, and will be very tough to dislodge, despite being completely incapable of caring for said house. She hasn’t even done her own laundry in > 30 years. (Can you imagine having your 83-year-old mother doing your laundry?) Reading these stories doesn’t make me feel better.
It may be tough for you to decide to do it, but I'm pretty sure that legally it's quite straightforward.

https://www.lawyers.com/ask-a-lawyer/trusts-estates/can-a-family-owned-property-be-sold-without-one-members-consent-1641374.html

I bought a house like this last fall, one of several heirs went to the court and the court forced a sale.

GreenEggs

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1951 on: January 22, 2020, 10:06:15 PM »
OMG, I was talking to my brother this morning. He does not follow this forum. He said, "Whatever you do, never, ever name more than one person to be your Executor or Trustee. Sure, have a successor, but never a Co-Anything." My parents named my sisters for Medical and my brother and me for Financial. My sisters are night and day. One's a spendthrift (aka BSS above) and the other has frugal chops. There was so much conflict! I could go on for pages, but I don't want to relive it.

Take my brother's wise advice, people!




Ditto on that! 




Villanelle

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1952 on: January 23, 2020, 11:41:28 AM »
It amazes me that people care that much if they aren't an executor.  I suppose I can understand that somewhat if you truly don't trust the other party.  But outside that, why?

My parents have informed my sister and me that she is their executor.  When they told me that, I felt relieved for myself and a little bit of sympathy for her.  It's a shit job; why would I want it? She gets an extra 1% of the estate, which in this case will not be inconsequential money (well into 5 figures), and I still feel like I will be getting the better deal. 

Captain FIRE

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1953 on: January 23, 2020, 12:20:43 PM »
True.  My folks asked me to be executor of their estate (in large part due to my profession).  I said I'd be happy to - but knowing from my Trusts & Estates class that this can be a hot button issue that tears families apart, I asked if they were sure my older sibling wasn't expecting/wanting to be it (due to her older sibling status)?  They checked with her, found out she did want it, and decided to go with her instead also because she lives an hour closer and she too has a good professional experience for it (accounting).  Wouldn't have suggested if I didn't trust her, but it's nice not to have to do the work!  (I anticipate I'd help out though.)

Ultimately they decided to have her primary executor, with me secondary, me primary for health care proxy (I have some academic experience here), and my brother secondary, and something else I forget that my brother was primary on and my sister secondary.

AMandM

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1954 on: January 23, 2020, 12:37:45 PM »
It amazes me that people care that much if they aren't an executor.

Me too. My father has named my husband as executor, and none of us daughters can figure out why. I'm the only married one. Is this a weird manifestation of sexism? (Uniikely given his general attitude to women) Is it a desire not to pick one child over the others?
Anyway, DH has already told him he'll refuse and ask that my sister--the one who lives in the same country as my father, has experience with the legal system there, and is fluent in the language--be appointed instead.

Villanelle

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1955 on: January 23, 2020, 01:05:59 PM »
It amazes me that people care that much if they aren't an executor.

Me too. My father has named my husband as executor, and none of us daughters can figure out why. I'm the only married one. Is this a weird manifestation of sexism? (Uniikely given his general attitude to women) Is it a desire not to pick one child over the others?
Anyway, DH has already told him he'll refuse and ask that my sister--the one who lives in the same country as my father, has experience with the legal system there, and is fluent in the language--be appointed instead.

My sister (only sibling) and her husband have named my husband executor.  I can tell you her thinking.  The obvious choices were her only sibling (me) or her husband's only sibling.  I think there was some tension about that, so they avoided it by picking neither.  Now, in my mind picking my husband seems about the same as picking me in this scenario, if they are worried about the appearance of favoritism, but it worked for them to break the impasse.  (It's entirely possible that my sister was to kind to say this, but also thinks I'm a flake and wouldn't do a good job.  You will always be to your family who you were when you were 16, apparently!)   They asked husband and me if it was okay, and we agreed.

So I wonder if it is something like that?  Or perhaps they want not to have to burden you with it when you are dealing with a loss that will be less emotional for your husband?

But having someone who speaks the local language and lives in-country does seem to make the most sense! 

20957

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1956 on: January 24, 2020, 09:04:50 AM »
When my grandparents died my aunt met a neighbor who was "willing to do them (the heirs) a favor" and "take the house off their hands" for a "very good price". My aunt was totally snowed by this guy and couldn't believe that someone so nice might not be totally honest about the market for a house in this extremely desirable neighborhood. My father, who is in a real estate-adjacent field and was executor, put some money into updating the house over my aunt's strong objections, and sold it for a lot more. Despite the extra money to her my aunt was still pretty mad for a while at my dad being so mean to this nice guy.

The sort-of funny thing is, some years later another relative died and left the two of them her house, and the exact same thing happened. My aunt, who at this point hasn't bought or sold a house on her own in 30 years, is sure the number a random guy offered her is totally fair and the best they can get, and my dad is totally wrong and mean to say no. Of course they sold it for considerably more a few months later after updating the kitchen and painting the walls. Eyeroll. It's just frustrating because the local market is so hot, and the idea that a seller should be desperate is so absurd, and anyone who pays the least bit of attention should know that.

MissNancyPryor

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1957 on: January 24, 2020, 09:20:39 AM »
"The nicest guy" is such a dangerous dude when it comes to that stuff.  My in-laws were often suckers for the handsome young man in the nice suit and got sucked into some crap.  Especially if the guy had pictures of his kids to show.  Everyone was their instant best friend and they would have fallen for that sort of thing you describe.  They were nice people, too nice, and it made them a mark.   

After they died it was a hot second before their neighbors were cruising around looking for an angle, for a deal, for some gimme. One guy was really pissed off that we would not allow him to park his car in the empty garage, you know, because no one was using it.  He thought we were completely unreasonable and almost as if it was his right.   

Finances_With_Purpose

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1958 on: January 26, 2020, 09:13:09 PM »

I let them know that as far as "stuff" I expect my sister to come in and do the mad grab but that I would be reasonable and not make a huge deal about that and just account generally for it.  Big stuff will be itemized out of her cash balance.  They agreed that is a good approach.   I agree as Cb noted above, having her kids swarm the place removing all the tchotkies and pure volume of things will be nicer than having to haul it out myself.   

During that conversation I asked for a specific Pyrex bowl that I have known my whole life and so Mom has now given it to me.  I let Dad know that out of the huge workshop of tools and power equipment, all I want is the hammer he built our house with back in 1972.  He thought that was wonderful.  I think our talk confirmed that they chose the right daughter to handle their legacy.   
 

Based upon that comment, you'd be my choice as well. 

Good approach, too, on the broader situation. 

Chris Pascale

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1959 on: January 29, 2020, 07:27:35 PM »
"The nicest guy" is such a dangerous dude when it comes to that stuff.  My in-laws were often suckers for the handsome young man in the nice suit and got sucked into some crap.  Especially if the guy had pictures of his kids to show.  Everyone was their instant best friend and they would have fallen for that sort of thing you describe.  They were nice people, too nice, and it made them a mark.   

After they died it was a hot second before their neighbors were cruising around looking for an angle, for a deal, for some gimme. One guy was really pissed off that we would not allow him to park his car in the empty garage, you know, because no one was using it.  He thought we were completely unreasonable and almost as if it was his right.   

This is why you can trust me. I'd never do anything to betray your trust. In fact, here's some earnest money of $500 for your house. Just sign right here and I'll take care of all that other complicated legal stuff.

MissNancyPryor

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1960 on: January 30, 2020, 09:12:42 AM »
@Chris Pascale  Oh, you look really good in that suit.  Such a sharp young man, such cute kids.    ;P

Capsu78

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1962 on: February 07, 2020, 04:05:51 PM »
So I've read the thread and have only very little to contribute until yesterday and then the shit hit the fan.

Over 30 years ago I got divorced from an abusive, violent jerk. We've co-existed (him telling his family what a bitch I was, me putting my head down and pulling myself out of debt and not getting child support). We had 2 children, one of whom was disabled but I married a stellar stand up guy and moved on. I dealt with the once in a while visits and the excuses but it was a small price to pay for peace of mind.

3 years ago my former MIL passed away. We only found out because I google him on a regular basis to see if he's dead and her obituary came up. We're not talking about someone with a small life, if you googled her name you'd know that she was well known and respected in her field. No one bothered to tell my son or myself and we actually don't live that far away.

Yesterday my former SIL contacted my son and let him know that there was an inheritance. Her excuse for not letting him know earlier was that she couldn't find him or my daughter. There are only 8 people on the planet (trust me on this) with that last name and when I google him my address and phone number is the second hit. They want to close out the estate and think that we should move quickly but freaked out when I said that I needed to contact the lawyer who handles my financial manners.

They think we should be grateful for whatever we get and while I don't think inheritance is guaranteed they can't figure out why I seem to be ambivalent about $50,000. There's something to be said for not needing someone else's money.

So my son has gotten his inheritance and former SIL and I have been talking about how to handle disabled daughter's money. It's in a trust that SIL controls but is more than willing to let me spend it on daughter. I guess she's having a difficult time with my ex. She's executor and my former MIL left the money in trust to be paid out in  a few equal payments. My jerk of an exhusband has already gone through all but the last of those not inconsiderable payments and he's bugging her for the more but it's not due till summer. She's holding firm with him but will probably wash her hands of him when it's all done. I'm just glad that the ex wasn't executor because I'm sure we'd never see a dime.

TheFrenchCat

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1963 on: February 08, 2020, 07:58:33 AM »
https://www.msn.com/en-us/money/personalfinance/my-son-says-ive-amounted-to-nothing-should-i-cut-him-from-my-will/ar-BBZKLyJ?ocid=spartandhp

Subject needs to read this thread.

My brother and dad are in a similar situation, and while I've never talked to my dad about his will, I hope he doesn't cut my brother out of it.  I really don't want to be stuck between what my brother considers fair and what my dad wishes.  I kind of hope my dad outlives most of his money so it won't be an issue.

DaMa

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1964 on: February 08, 2020, 08:40:55 AM »
When I was a teenager, there were two times (that I know of) when my father, a narcissistic alcoholic, got drunk and drove to his parents house late at night.  He was a cry in his beer drunk, and these visits were likely for him to tell then how bad they treated him as a child, and how they should be proud of him now. My grandparents lived in a rural area and went to bed early.  This was in the early 80s when crime was relatively high, and safety for the elderly living in a rural area was an issue.  So Dad shows up at 11:30pm, and Grandpa fearing a burglar, gets out his shotgun, and goes to the porch and yells for Dad to leave.  Dad left, and never visited his parents again.  Ever.  "They pulled a gun on me," was his justification.  He also started to share all his thoughts and memories on how they were terrible people, which I would have been happy to never know.  (This was a clear case of those are not the people that raised me.  My grandparents were wonderful.  His parents were not.)

Grandpa died ten years later.  After, Grandma had a small cottage built next to my uncle's house (dad's younger brother), where she lived for a couple of years.  She developed Alzheimer's and was in a nursing home until she died a couple of years later.  My uncle and his family handled 100% of the care.

More than 20 years have passed and my father still complains that he didn't get anything.  He has no contact with his brother and says his brother stole from him.  A coin collection is frequently mentioned.

I have no problem with people cutting ties with toxic family.  I have almost no contact with my father.  But, I certainly don't expect anything from him.  The worst thing about this story, is that my uncle and my grandparents lived frugally on very little income, so anything valuable was probably sold before my grandmother died.

Chris Pascale

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1965 on: February 08, 2020, 04:26:35 PM »
@Chris Pascale  Oh, you look really good in that suit.  Such a sharp young man, such cute kids.    ;P

Ha, thanks!

Siebrie

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1966 on: February 10, 2020, 04:27:30 AM »
My sister fell out with my parents and went no-contact for a few years. Recently, low contact has been re-established. Sister is verbally and physically much stronger than me, and parents fear she would outshout/outpush/outlegalbattle me in the division of their inheritance. The inheritance won't be very much, but sister just likes to win and get paid 'what she's owed after her horrible childhood'. So, they made me sole executor. I have accepted, and informed them that I will hire external help to settle the 'estate'. We are talking around €300,000 gross including the house, leaving about €175,000 net to be divided between both of us. A large part will be eaten up by Dutch inheritance taxes.

russianswinga

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1967 on: February 10, 2020, 04:06:44 PM »
We are talking around €300,000 gross including the house, leaving about €175,000 net to be divided between both of us. A large part will be eaten up by Dutch inheritance taxes.

I did not realize inheritance taxes in the Netherlands kicked in at that low of an amount (USA is closer to $5 million I think?)
Would it not make more sense for them to liquidate the estate earlier? For example, sell the house, gift both sisters money, then rent?
If I were facing a choice of owning a house until my last day and risking my children losing 1/2 of its value to taxes, as opposed to gifting them while I am still living, I would dispose of the house.

TVRodriguez

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1968 on: February 11, 2020, 05:41:28 AM »
We are talking around €300,000 gross including the house, leaving about €175,000 net to be divided between both of us. A large part will be eaten up by Dutch inheritance taxes.

I did not realize inheritance taxes in the Netherlands kicked in at that low of an amount (USA is closer to $5 million I think?)
Would it not make more sense for them to liquidate the estate earlier? For example, sell the house, gift both sisters money, then rent?
If I were facing a choice of owning a house until my last day and risking my children losing 1/2 of its value to taxes, as opposed to gifting them while I am still living, I would dispose of the house.
US federal estate taxes apply to amounts over the exemption amount, which is currently about $11.5 million per person (set to decrease by half in 2026), and is indexed for inflation. That includes lifetime giving, bc the estate and gift tax is a unified tax on transfers. You also get an extra $15,000 per person annually  (the annual exemption amount) that's not counted towards the $11 million.

As an aside, an inheritance tax is imposed on beneficiaries and depends on who is receiving the bequest, and the federal government does not have an inheritance tax.  The federal estate tax comes out of the estate and depends on the size of the estate and the decedent's lifetime and testamentary gifts and bequests.

talltexan

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1969 on: February 11, 2020, 07:20:02 AM »
Suppose you are forty years old, and your parents are sixty-eight. Your 68-year old parents can afford to give you $15,000 tax free annually. They can expect to live about another twenty years (based on demographic tables), so that's $300,000 on average that can be given without counting against their estate tax limit.

That seems very small compared to $11.2 million.

UncleX

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1970 on: February 11, 2020, 07:53:48 AM »
We are talking around €300,000 gross including the house, leaving about €175,000 net to be divided between both of us. A large part will be eaten up by Dutch inheritance taxes.

I did not realize inheritance taxes in the Netherlands kicked in at that low of an amount (USA is closer to $5 million I think?)
Would it not make more sense for them to liquidate the estate earlier? For example, sell the house, gift both sisters money, then rent?
If I were facing a choice of owning a house until my last day and risking my children losing 1/2 of its value to taxes, as opposed to gifting them while I am still living, I would dispose of the house.
I'm not a tax professional, but I'm Dutch and interested. In the Netherlands (in 2019) a child pays nothing over the first €20,616, 10% over the next €124,727 and 20% over the rest. I assume the parents do not own their house debt free, leaving €175,000 euro to be devided after it is sold. Both children inherit €87,500 and have to pay €7,431 each (assuming standard circumstances).

https://www.belastingdienst.nl/wps/wcm/connect/nl/erfbelasting/

Receiving a gift from parent while they're still alive is also taxed and is not necessarily more beneficial.

https://www.belastingdienst.nl/wps/wcm/connect/nl/schenken/content/hulpmiddel-schenkbelasting

« Last Edit: February 11, 2020, 07:58:59 AM by UncleX »

TomTX

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1971 on: February 11, 2020, 08:01:18 AM »
Suppose you are forty years old, and your parents are sixty-eight. Your 68-year old parents can afford to give you $15,000 tax free annually. They can expect to live about another twenty years (based on demographic tables), so that's $300,000 on average that can be given without counting against their estate tax limit.

That seems very small compared to $11.2 million.

Nope. The parents can EACH give $15k per year per person. That's $30k per year.

If you happen to be married, the parents can each give each spouse $15k per year, totaling $60k per year.

If you have a married sibling, the parents can distribute $120k per year tax-free.

If there are the usual 4 grandchildren, they can distribute $240k per year tax free.

Across 20 years, that's $4.8M.

Remember that long before that 20 years is up the $11.5M estate exemption is cut in half to $5.2M.

That makes the per-year transfers nearly as much as the estate exemption. If you account for the expected increases in the per-year cap, it will be higher than the estate exemption.

Imma

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1972 on: February 11, 2020, 08:02:09 AM »
We are talking around €300,000 gross including the house, leaving about €175,000 net to be divided between both of us. A large part will be eaten up by Dutch inheritance taxes.

I did not realize inheritance taxes in the Netherlands kicked in at that low of an amount (USA is closer to $5 million I think?)
Would it not make more sense for them to liquidate the estate earlier? For example, sell the house, gift both sisters money, then rent?
If I were facing a choice of owning a house until my last day and risking my children losing 1/2 of its value to taxes, as opposed to gifting them while I am still living, I would dispose of the house.

In NL the exemptions are about €650.000 for a spouse and €20.000 for a child or grandchild, €50000 if you inherit from your child and €2000 for anyone else.

Then (as a child) you pay the low rate of inheritance tax over the first 125.000 (10%) and 20% over the remaining money.

So, €300000/2=€150.000 per sibling
20k is tax free
125k is taxed at 10% (€12500 in taxes)
5k is taxed at 20% €1000 in taxes)

Which means both of you would inherit €150k gross and €136500 after taxes.

There are also plenty of options to hand out money to the kids without paying taxes - a once a lifetime gift of €100.000 and a €5000 gift every year.

I honestly don't think those are insane amounts of tax to pay. Only once your inheritance starts exceeding €150.000 you start to pay serious taxes. While everyone wants to receive an inheritance, large inheritances are disruptive to society. To protect our society I think it's justified to limit large inheritances. That's why we invented inheritance tax in the first place and it's the nr 1 most important tax in our history. Thanks to inheritance tax the power of the nobility with their huge inherited wealth was decimated in less than 50 years to the point that nobility has become a quirky tradition rather than a class of people who held undeserved wealth and power.

UncleX

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1973 on: February 11, 2020, 09:17:40 AM »
While everyone wants to receive an inheritance, large inheritances are disruptive to society. To protect our society I think it's justified to limit large inheritances. That's why we invented inheritance tax in the first place and it's the nr 1 most important tax in our history. Thanks to inheritance tax the power of the nobility with their huge inherited wealth was decimated in less than 50 years to the point that nobility has become a quirky tradition rather than a class of people who held undeserved wealth and power.
I never heard this explanation before, but it actually makes a lot of sense. Very interesting, thanks!

iris lily

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1974 on: February 11, 2020, 09:50:21 AM »
Well, DH’s family inheritance issue may be heading to court. That was the last volley by Bad Sister.

Me, I am on Team Bad Sister. Stop the madness. Sell the damn thing.

Too bad I have no vote in the matter.


Imma

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1975 on: February 11, 2020, 09:56:08 AM »
While everyone wants to receive an inheritance, large inheritances are disruptive to society. To protect our society I think it's justified to limit large inheritances. That's why we invented inheritance tax in the first place and it's the nr 1 most important tax in our history. Thanks to inheritance tax the power of the nobility with their huge inherited wealth was decimated in less than 50 years to the point that nobility has become a quirky tradition rather than a class of people who held undeserved wealth and power.
I never heard this explanation before, but it actually makes a lot of sense. Very interesting, thanks!

Thank Napoleon! He also made sure that all children inherited equally and that it's no longer possible to disinherit your children. All a political choice to break the power of the wealthiest in society.

It's hard to put an exact number to what a 'high' inheritance is, an amount that would be disruptive in society. In the US it makes sense that the tax free allowance is much higher because certain aspects of life are so extremely expensive (health care, education). In my part of the world people don't need such high cash buffers.

We've had the option of a tax free cash gift of €100.000 for children between 18 and 40 for a few years now. I think it's no coincidence that we are going through the worst housing bubble in our country's history at the same time. I'll be 30 this year and was lucky to be able to buy through a low-income project when I was 24. I was always a saver so we had some savings for closing costs. We earn twice as much now but we probably wouldn't be able to afford our current home if we bought now.

In my group of friends there's a very visible gap between those who were able to buy, with an extremely low interest rate and usually a cash gift from the parents, and thus are able to save/invest/start a family and those who are paying half their household income in rent and can't find a way to improve their situation. Nearly every home owner in our social circle has received the €100k gift, some two, from both sets of parents. The parents get the cash from their own inheritances or by downsizing. I don't begrudge anyone their inheritance or gift and I understand why families make those choices, but I strongly suspect the 100k gift has played a large part in fuelling the current housing boom and I feel very sorry for those of my friends on the losing end. I think this wealth gap is starting to become very disruptive.

iris lily

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1976 on: February 11, 2020, 10:07:56 AM »
While everyone wants to receive an inheritance, large inheritances are disruptive to society. To protect our society I think it's justified to limit large inheritances. That's why we invented inheritance tax in the first place and it's the nr 1 most important tax in our history. Thanks to inheritance tax the power of the nobility with their huge inherited wealth was decimated in less than 50 years to the point that nobility has become a quirky tradition rather than a class of people who held undeserved wealth and power.
I never heard this explanation before, but it actually makes a lot of sense. Very interesting, thanks!

I have heard the  statistic that large pots of inherited wealth dissipate after just a few generations, but I don't believe inheritance tax is the sole controller of that.

Other factors are

1) inheritors spread the wealth over many people, reducing assets per capita
2) inheritors are not as motivated to coddle the assets as were the originators of the wealth—they just wanna spend and enhance their lifestyle
 3) inheritors are not skilled at preserving and growing the assets as were the originators
4) inflation over generations

We have, in my family, an instance of multi generational wealth that started withgrandparents, blue collar people, who worked, invested, and had company stock that did well. Their only child  is cheap as hell and has every dime they ever left him. His child,an only,child, is due to inherit millions. I doubt she has any idea how much is there.

She is a good kid  but I will bet those assets die with her. The preservation of the assets is causing her dad anxiety. But you  know, that is worry of his own making. He should not expect to exert control from the grave.

I look at the huge death tax on the aristocracy in England  and am sad about the toll it takes on great old ancient houses. So many end up in the National Trust because  families cannot afford to keep them. After you’ve sold off acres of farm land and the paintings and fine furniture to pay taxes, there isnt much else you can do to stave off jettisoning the house.

So yeah, death taxes at a high rate is a philosophy consistent with our populist government and generally I am ok with it, but there are downsides to everything and taxation is not the panacea to solve all things.

DadJokes

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1977 on: February 11, 2020, 10:13:26 AM »
It's easy to say that inheritance money should be taxed. After all, we always tax money every time it changes hands. So why should an inheritance be any different? However...

How does that work with business ownership that is inherited? To pay the tax, would the inheritor have to sell partial ownership of the company or potentially liquidate it entirely? There's probably a simple answer that isn't coming to mind.

Sorry, not trying to make this political. I'm just curious how to approach that counter-argument.

former player

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1978 on: February 11, 2020, 10:18:28 AM »
There is a very obvious problem with inheritance today and that is the hundred millions/billionaire class.  In many ways they are effectively beyond the control of governments, their wealth is so large it will keep growing  - it is too big to be subject to the old "clogs to clogs in three generations" saying - and even if it has been honestly come by it will soon be in the hands of people who haven't earned it and whose use of it will have few or no limits.

shelivesthedream

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1979 on: February 11, 2020, 10:56:29 AM »
In the UK we have the seven year rule, where inheritance tax basically reaches back and taxes you progressively on substantial gifts you made in the seven years before you die. So if you have terminal cancer you can't just give everything to your children on the day of your diagnosis, die six months later, and have everything remain untaxed.

I don't have a problem with inheritance tax per se, but I am slightly troubled by the way vast differences in property values in the UK affect inheritance tax. I know a lot of people have the "family home" and would like to pass it on. A house in Northumberland could be completely exempt from inheritance tax, whereas the same house in London could be taxed so heavily the heirs would have no choice but to sell it. But that's really a general beef with the UK property market, I suppose, not inheritance tax specifically.

K-ice

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1980 on: February 11, 2020, 11:59:20 AM »
I look at the huge death tax on the aristocracy in England  and am sad about the toll it takes on great old ancient houses. So many end up in the National Trust because  families cannot afford to keep them. After you’ve sold off acres of farm land and the paintings and fine furniture to pay taxes, there isnt much else you can do to stave off jettisoning the house.

I too feel kind of bad for these families. We visited a castle in Ireland and it really wasn't that big. I think it was just lost to the family in the past 50-70 years or so. Kind of sad really...

We have no castle but neither of my parents or inlaws have ever sold their homes bought in the 70's. My SO's parents upgraded but kept their first home as a rental. My parents will likely need to downsize before they pass but I'm not sure. The Grandparents on both sides have lived in the same place as long as I have known.  Two had to be sold when they died. Not my homes, not my choice at all, no real drama but I found it hard. Another grandparent is still living in a little stone house in Europe built by a great grandparent. It's not worth a lot but I hope it's kept in the family.

talltexan

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1981 on: February 11, 2020, 01:04:27 PM »
While everyone wants to receive an inheritance, large inheritances are disruptive to society. To protect our society I think it's justified to limit large inheritances. That's why we invented inheritance tax in the first place and it's the nr 1 most important tax in our history. Thanks to inheritance tax the power of the nobility with their huge inherited wealth was decimated in less than 50 years to the point that nobility has become a quirky tradition rather than a class of people who held undeserved wealth and power.
I never heard this explanation before, but it actually makes a lot of sense. Very interesting, thanks!

I have heard the  statistic that large pots of inherited wealth dissipate after just a few generations, but I don't believe inheritance tax is the sole controller of that.

Other factors are

1) inheritors spread the wealth over many people, reducing assets per capita
2) inheritors are not as motivated to coddle the assets as were the originators of the wealth—they just wanna spend and enhance their lifestyle
 3) inheritors are not skilled at preserving and growing the assets as were the originators
4) inflation over generations

We have, in my family, an instance of multi generational wealth that started withgrandparents, blue collar people, who worked, invested, and had company stock that did well. Their only child  is cheap as hell and has every dime they ever left him. His child,an only,child, is due to inherit millions. I doubt she has any idea how much is there.

She is a good kid  but I will bet those assets die with her. The preservation of the assets is causing her dad anxiety. But you  know, that is worry of his own making. He should not expect to exert control from the grave.

I look at the huge death tax on the aristocracy in England  and am sad about the toll it takes on great old ancient houses. So many end up in the National Trust because  families cannot afford to keep them. After you’ve sold off acres of farm land and the paintings and fine furniture to pay taxes, there isnt much else you can do to stave off jettisoning the house.

So yeah, death taxes at a high rate is a philosophy consistent with our populist government and generally I am ok with it, but there are downsides to everything and taxation is not the panacea to solve all things.

are you referring to the "populist government" that doubled the estate tax exemption in 2017? That "populist government"?

TVRodriguez

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1982 on: February 11, 2020, 04:48:55 PM »
While everyone wants to receive an inheritance, large inheritances are disruptive to society. To protect our society I think it's justified to limit large inheritances. That's why we invented inheritance tax in the first place and it's the nr 1 most important tax in our history. Thanks to inheritance tax the power of the nobility with their huge inherited wealth was decimated in less than 50 years to the point that nobility has become a quirky tradition rather than a class of people who held undeserved wealth and power.
I never heard this explanation before, but it actually makes a lot of sense. Very interesting, thanks!

I have heard the  statistic that large pots of inherited wealth dissipate after just a few generations, but I don't believe inheritance tax is the sole controller of that....

So yeah, death taxes at a high rate is a philosophy consistent with our populist government and generally I am ok with it, but there are downsides to everything and taxation is not the panacea to solve all things.

are you referring to the "populist government" that doubled the estate tax exemption in 2017? That "populist government"?

Ha! Seriously.

"Shirtsleeves to shirtsleeves in three generations" is a common expression in the wealth advisory world.

US federal estate taxes have existed in some form since the earliest days of our country's history. It came and went, often enacted in wartime to pay for the war. The current tax began in 1916.

One reason for the US estate tax is to capture the otherwise untaxed gain on securities, which receive a step up in basis at death.

alienbogey

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1983 on: February 11, 2020, 08:51:01 PM »
Ironic that the death tax was started to help pay for a war.

Finances_With_Purpose

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1984 on: February 11, 2020, 09:04:07 PM »
Ironic that the death tax was started to help pay for a war.

But the economists always told me that if you want less of something in the world, you tax it! :)

Cb1234567

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1985 on: February 11, 2020, 09:08:15 PM »
I dread my mom’s passing. Mainly because I absolutely adore her, but secondarily because she and my (now-deceased) father made me and my two siblings co-executors and, to make matters worse, co-owners on a transfer on death deed for their house. And one of my sisters has resided in said house for > 30 years, and will be very tough to dislodge, despite being completely incapable of caring for said house. She hasn’t even done her own laundry in > 30 years. (Can you imagine having your 83-year-old mother doing your laundry?) Reading these stories doesn’t make me feel better.
It may be tough for you to decide to do it, but I'm pretty sure that legally it's quite straightforward.

https://www.lawyers.com/ask-a-lawyer/trusts-estates/can-a-family-owned-property-be-sold-without-one-members-consent-1641374.html

I bought a house like this last fall, one of several heirs went to the court and the court forced a sale.

Never underestimate the ability, motivation and singular focus of a recalcitrant co-owner to Snafu a sale, even if court-ordered. We narrowly avoided the scenario of my mom’s will giving joint ownership of her home to my sister and I. I had to pull in the Big Guns (call my aunt and uncle) to escape.

I posted a nightmare story on this forum a while ago, from when my dad died. It was cathartic :). After my sister went nutso when I was doing his estate, my mom updated her will (to give sister an annuity and to house to be sold...neither here nor there..Mom was trying to keep sister from being homeless in her old age without doing a trust.).

[*flashback*] To refresh your memories, sister was a do-nothing, no job, in her 30s, college educated, no purpose. She half-lived in dad’s house, and copious amounts of her crap resided in dad’s already full basement. Dad died unexpectedly at 70 y.o. Incidentally, he recently had cancelled his life insurance policy - not sure if that jinxed him. (He would likely find this comment hysterical, just FYI.)

Ok, sorry. Focusing: Sister proceeds to take over the house, leaving her detritus of life everywhere (envision hot pink and black bras draped over the washing machine and on a kitchen chair, dirty undies and pjs left in the hallway in front of her bedroom, her groceries and snacks and papers and books strewn across all flat surfaces in the kitchen...), all whilst my DH and I are there for dad’s final arrangements and for me to set up the estate. DH describes it as “marking her territory”. Fortunately, dad left the choice of selling the house up to his executor (unfortunately me, though I’d rather do it than have my sister do it). At least in this case, I was able to change the locks and get her out. Eventually.

After loads of work and drama, the house went on the market with a wonderful pit bull of an agent...to be under contract within just a few weeks. This was when I learned that realtors call, shall we say, lower tier home inspectors when they want a deal to go through. That gentleman must’ve been confused; he certainly failed to look up at the patched pipes in the basement, which I know from reading his inspection report.

Ok, so we’re days from closing. I’ve signed off in advance, and DH and I were packing to drive the 12 hrs or so for “the final pack out” over a weekend. Then I receive a kindly letter from sister’s attorney, ranting and just shy of ordering me to delay the closing. Um, no? I still remember the attorney’s name, including how she spells it. And yes, in case you’re wondering, sister tried to bill her attorney fees to the estate. (hahahahaha, no.) Luckily, I’d already spoken to an attorney, so I called him. He read the letter and he advised to ignore it (all gratis, because some people are saints). Also luckily, my sister is not very sophisticated or strategic or cunning, else she could’ve sabotaged the sale in other ways - damaging the house, going to the courts, showing up to harass the buyer... She’d already dragged her feet removing her belongings, things of dad’s that she wanted, and a motorcycle. It was ridiculous. [end flashback]

Fast forward to now. Several years after the nightmare of dad’s estate, my mom goes back to update her will. She wanted to get rid of the annuity and do something else for my sister. Sister has stayed at mom’s house for many months at a time, no job until recently and not consistent work (DH feels she is running out of money). Mom says priceless comments such as, “oh, she’s so helpful” “[she] loaded the car for me, and I didn’t have to do a thing” “[she] picked this or that up at the store for me” and my favorite, “ Oh,everyone here just looooooves [sister]” —> this last referring to all of my mom’s friends and neighbors. I will spare you my responses, both the one I actually said and the many others kicking around in my head for the next several weeks. Lol

Mom is at the attorney. Her plan *going in* was to update her will to give sister the house and me an equivalence in money (mom has plenty), the rest split 50/50, with a few specific bequests (as before). No annuity, no trust fund. Sister obviously likes living there and has been adopted by mom’s friends and neighbors (right?!?). Then sister could sift through mom’s things at her leisure, and sell later if she wanted. Selfishly, this saves her executor (me) from having to clean and sell the house. Her plan *going out* was to will the house to both sister and I, and her other assets to be split 50/50 (that part isn’t important). What IS important is that she was planning to force me to put my name on something with sister. We’ve never gotten along. Dad’s estate was a horror solely because of her. Mom’s friends may love the new persona, but all the old family friends neighbors I know flat out say she’s crazy, among other things. One sweet old lady (family friend) uses the word hoochie mama -to my DH, not me. Does a leopard change its spots?

Mom tells me of this brilliant update late in the evening after seeing her attorney, and tells me they’re drawing it up for her to sign. I feel my blood pressure spike and my hands start shaking. I breathe slowly through my nose and ask a few questions. The attorney-who must’ve taken stupid pills that day - told my mom it’s not that hard to force a sale in her state (TN) - it’s just a piece of paper, and the courts generally approve it without a big fuss. He was concerned (or she became concerned) that there might not be enough money, or that the will order of property disposition was the house and then money later or goodness knows what. I don’t feel those concerns are justified, but let’s just say they are legit. So, the solution is to give the house to TWO people, one of whom demonstrably went categorically apeshit last time this happened.

Fantastic.  I proceed to freak out, because apparently mom forgot that I nearly called the police on my sister during dad’s estate, not to mention how nearly impossible it was to get her planted butt out of that house. And now she’s going to have her executor put both names on the DEED?! Okay? What could go wrong? In TN, two people co-owning a house means each gets full use of the house. Sister could create a trailer park on the property, bring in illegal immigrants (mom’s pet peeve) - or worse - democrats (gasp !!), or simply take over the whole place with her own living, full the garage with junk (probably from dad’s), not pay the property taxes/insurance and not upkeep anything while still living there, wander around in her underwear when a realtor tries to show the house, or it might not even be here but some good boyfriend she comes up with...all I could think was [!!!!!!!].

I called my aunt and uncle That Night, this cannot happen is my thinking and mom was in lala land. All I can think is the attorney overwhelmed my mom, and she lost her way. My aunt and uncle (who knows what they thought) saved the day and somehow steered mom away from this horrendously misguided advise from the attorney.  It was in their own best interests: my aunt is the backup executor. Now the will is back to requiring the house be sold - sister will have a month to decide if she wants it. I feel that is reasonably safe - sister won’t likely be able to decide anything that fast.

So. The moral of this story is: do not leave real property to multiple people, unless you hate them and want to punish them.

mtn

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1986 on: February 12, 2020, 08:08:32 AM »
I dread my mom’s passing. Mainly because I absolutely adore her, but secondarily because she and my (now-deceased) father made me and my two siblings co-executors and, to make matters worse, co-owners on a transfer on death deed for their house. And one of my sisters has resided in said house for > 30 years, and will be very tough to dislodge, despite being completely incapable of caring for said house. She hasn’t even done her own laundry in > 30 years. (Can you imagine having your 83-year-old mother doing your laundry?) Reading these stories doesn’t make me feel better.
It may be tough for you to decide to do it, but I'm pretty sure that legally it's quite straightforward.

https://www.lawyers.com/ask-a-lawyer/trusts-estates/can-a-family-owned-property-be-sold-without-one-members-consent-1641374.html

I bought a house like this last fall, one of several heirs went to the court and the court forced a sale.



So. The moral of this story is: do not leave real property to multiple people, unless you hate them and want to punish them.

Oh how I hope that that is not my in-laws plans. My FIL mentioned that it was, and I quickly told him about my parents experiences with my grandparents, and not to do that just leave cash if you leave anything. Hopefully he remembered that conversation.

FWIW, my parents experiences were not contested and all siblings did and still do get together wonderfully - but the estate that left real property took about 10 years to settle (other issues on top of the real estate, but that was one of the things drawing it out).

AMandM

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1987 on: February 12, 2020, 11:22:33 AM »
So. The moral of this story is: do not leave real property to multiple people, unless you hate them and want to punish them.

Hurray! My father just sold his house!

His entire estate is to be divided equally among us. I actually believe that my sisters and I would have been able to sell the house and split the proceeds completely amicably, but what a PITA, especially since each of lives in a jurisdiction with a different legal system.

iris lily

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1988 on: February 12, 2020, 12:17:53 PM »
While everyone wants to receive an inheritance, large inheritances are disruptive to society. To protect our society I think it's justified to limit large inheritances. That's why we invented inheritance tax in the first place and it's the nr 1 most important tax in our history. Thanks to inheritance tax the power of the nobility with their huge inherited wealth was decimated in less than 50 years to the point that nobility has become a quirky tradition rather than a class of people who held undeserved wealth and power.
I never heard this explanation before, but it actually makes a lot of sense. Very interesting, thanks!

I have heard the  statistic that large pots of inherited wealth dissipate after just a few generations, but I don't believe inheritance tax is the sole controller of that.

Other factors are

1) inheritors spread the wealth over many people, reducing assets per capita
2) inheritors are not as motivated to coddle the assets as were the originators of the wealth—they just wanna spend and enhance their lifestyle
 3) inheritors are not skilled at preserving and growing the assets as were the originators
4) inflation over generations

We have, in my family, an instance of multi generational wealth that started withgrandparents, blue collar people, who worked, invested, and had company stock that did well. Their only child  is cheap as hell and has every dime they ever left him. His child,an only,child, is due to inherit millions. I doubt she has any idea how much is there.

She is a good kid  but I will bet those assets die with her. The preservation of the assets is causing her dad anxiety. But you  know, that is worry of his own making. He should not expect to exert control from the grave.

I look at the huge death tax on the aristocracy in England  and am sad about the toll it takes on great old ancient houses. So many end up in the National Trust because  families cannot afford to keep them. After you’ve sold off acres of farm land and the paintings and fine furniture to pay taxes, there isnt much else you can do to stave off jettisoning the house.

So yeah, death taxes at a high rate is a philosophy consistent with our populist government and generally I am ok with it, but there are downsides to everything and taxation is not the panacea to solve all things.

are you referring to the "populist government" that doubled the estate tax exemption in 2017? That "populist government"?

I think former player’s post, #1992 just a couple above yours, hits all the points of Bernie and Co.’s populist message, you know, the evil “hundreds millions/ billionaires” and maligning wealth that may not have been “honestly come by” and then dissing inheritors who ” didn’t earn it”.

I couldnt have written a better paragraph myself of I trying to express that overall sentiment.

Villanelle

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1989 on: February 12, 2020, 09:45:06 PM »
My parents are leaving their house to both my sister and me.  Well, I don't think it is specified beyond "everything is split 50.50", but the end result seems the same.

I can only hope she continues to be the reasonable, sane person I think she is, and that neither of us are greedy to the point of nickel and dime-ing one another, when the time eventually comes. 

My own estate is also just set up in terms of money or % shares, which I guess also leave the house somewhat ambiguous.  I would hope that means the executor can sell on the terms she see fit, for the amount she deems appropriate.  But I probably need to ask that of the lawyer.  So thanks for the conversation. 

Imma

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1990 on: February 13, 2020, 02:55:06 AM »
It's easy to say that inheritance money should be taxed. After all, we always tax money every time it changes hands. So why should an inheritance be any different? However...

How does that work with business ownership that is inherited? To pay the tax, would the inheritor have to sell partial ownership of the company or potentially liquidate it entirely? There's probably a simple answer that isn't coming to mind.

Sorry, not trying to make this political. I'm just curious how to approach that counter-argument.

In my country - and I expect in most countries - there is a tax exemption in case you inherit a business and the heir plans to actually take over the business.

@iris lily In my country we never used to have as many grand country houses and estates as there used to be in the UK. Most of those were broken up in the 19th century and I don't believe this is a bad thing. It wasn't like in Downton Abbey. My ancestors used to rent a bit of land from a landowner until they were able to buy. As each village usually had one or two landowners, and everyone knew eachother, the people lived in virtual slavery - if you were kicked off your property for some reason (for example, becoming Protestant/Catholic while the landowner was Catholic/Protestant) you were basically forced to leave the area all your family lived in. When the landowners were starting to sell off, people like my ancestors were able to buy a small property and live the way they wanted to.

There are some tax exemptions to keep forests and other important areas of nature together. From a historical perspective, it's of course important to save the country homes themselves. As far as I know this is generally happening where I live - since the buildings are all monuments they can't be demolished and upkeep is subsidized. I know it's hard work to keep up a house like that, but I don't think people who own a country home should have to pay less taxes because they are burdened with that home. There are plenty of ways for those homes to provide an income (from opening it up to visitors to organizing historical events to turning it into a hotel or a wedding venue). I agree with @shelivesthedream that inheritance tax is making it more difficult for 'regular' people to inherit small homes that have become worth a fortune in recent years. I don't really know how to prevent that - it's happening in my country too. But as I said, tax-free gifting from parents to children is imho making this problem worse. The average home in my country now costs 8x the average income. Tax-free gifting of large sums of money certainly plays a part in this. Homes are scarce but the prices can only go up so much. At some point no one can afford homes anymore and prices will fall. Tax-free giving distorts this process of supply and demand.

Paul der Krake

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1991 on: February 13, 2020, 03:15:27 AM »
European misfit here. I have a couple old friends and friends of friends who own family castles and manors and similar Large-Ass Historical Buildings (LAHBs for short).

There's really two main problems behind owning such a thing.

#1: It's wildly unprofitable. Assume a single family owns this for now, they're upper middle class, so they don't live in Bumfuck Burgundy, or Bumfuck Yorkshire. They live in Paris or London, where many more fucks are available for consumption. If you're "lucky" there may be enough demand from visitors to have tours that can raise some money. We're not talking 30 EUR per visitor hourly tour of Versailles here, more like 5 EUR per adult kids go free, every other Tuesday and Saturday. It will not come anywhere near covering the trips to and from the LAHB. You also need to maintain relationships with local craftsmen who will incessantly come to help fix whatever is broken this month. Then you'll get a frantic call from your tour guide because some kid ran headfirst into the iron cauldron during a tour and you have to deal with that (at least it's not America so you won't get sued, but it still needs to be dealt with).

#2: Heirs. There is this thing called "indivision". It's arcane and complicated but basically means everyone who owns the thing needs to agree on everything, or nothing gets done. The LAHB may have been the home of this cultured and great ancestor of yours, but guess what, 4 generations later it's now 50 heirs, out of which you're bound to find a bunch of morons without a pot to piss in. And they have a claim to the LAHB just as much as you. They will make it impossible to do anything, either because they don't want to, can't afford to, or just don't like you because 4 generations with countless family branches in the picture you're hardly related at all and there's always resentment lurking below the surface.

tl;dr big ass buildings great to visit, terrible to own. This is why many look like shit.

Imma

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1992 on: February 13, 2020, 04:47:34 AM »
I don't know a lot about how to run one of those LAHB"s (my family worked downstairs ) but it doesn't make sense to own the building that way - and all be legally liable in case something happens too. It would make way more sense to put the home in a trust or to turn it into a corporation where the owners become shareholders, like a large family business. But of course all owners would have to be on board with that. I don't know about other countries but I'm pretty sure that letting a monument fall into disrepair is illegal in here and would have serious financial consequences.

I do know one person who's family is the heir to a large corporation, started by their great grandfather. The family owns the majority of the shares, the shares are in a trust and the board of the trust makes the decision. The purpose of the trust is to keep the company intact and to provide the heirs with an income. Most heirs don't care much about the company and just collect their free money and that one weird uncle who always fights with everyone can't block important decisions.

jinga nation

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1993 on: February 13, 2020, 05:49:52 AM »
So. The moral of this story is: do not leave real property to multiple people, unless you hate them and want to punish them.

Hurray! My father just sold his house!

His entire estate is to be divided equally among us. I actually believe that my sisters and I would have been able to sell the house and split the proceeds completely amicably, but what a PITA, especially since each of lives in a jurisdiction with a different legal system.

Smart man.

My dad is clearing his house (a 4 bed, 2 bath is too much for him), after my mum and grandma passed in the last 2 years. He will eventually sell his house and move in with either my sibling or me (we're all local). Sibling and I have told him that neither we nor our kids need his money; we'd rather he use it for travel and his retirement. Any monies left over when he passes will go to his only sister, a spinster overseas. If she passes before him, monies will go to several charities.

zolotiyeruki

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1994 on: February 13, 2020, 08:36:44 AM »
The average home in my country now costs 8x the average income. Tax-free gifting of large sums of money certainly plays a part in this. Homes are scarce but the prices can only go up so much. At some point no one can afford homes anymore and prices will fall. Tax-free giving distorts this process of supply and demand.
Can you elaborate on why there is such a housing shortage?  I don't know off the top of my head what part of Europe you're from, but for that kind of money, I'd expect there to be all sorts of builders and developers building houses to meet the demand.  What's stopping them?

Imma

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1995 on: February 13, 2020, 09:55:51 AM »
Long story short: the recession happened. We lost about a decade of building while the population grew.

Long version: due to the crash and very long recovery period, including housing market collapse and high unemployment between 2008 and 2013 most projects were cancelled due to lack of funding and new projects weren't developed. This causes major job losses in the trades, so people find different jobs and young people pursue other careers. I'm in NL where we don't have a lot of space so projects have to be carefully planned and that takes a lot of time/money, we can't just build a few suburbs on former farmland. Recent projects in my city include the redevelopment of the harbour and old factory sites (that are heavily polluted and cost €€€ to build on) and all new buildings are high rise. There's even a plan in development where a high rise building on 'legs' will be built over an old monumental low rise building (they didn't get a permit to demolish). So that stuff takes time and €€€.

Of course only short term demand was affected by the economic crisis, long term people are always going to need homes. We're seeing the first boom of completed projects now because after 2013 developers needed about 5 years to go through planning/permits/finance etc. Pricing has gone way up because there are fewer people in the trades now - again, the first generation of post-crisis tradespeople is arriving on the job market but that took some time. New projects are developed everywhere now, but the economy is slowing so I just hope we don't fall into the same trap again.

Because all of this it only pays off to develop expensive homes. Low and mid income housing is disappearing fast. Some cities require developers to include mid-price homes but this just pushes up the price of the other homes.

Dicey

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1996 on: February 13, 2020, 10:37:45 AM »
In addition to @Imma's excellent explanation, there are additional factors at play. The rise of airbnb takes property out of circulation. Ditto for the board-and-care industry. Sure, they're still providing housing for people who need it, but it ain't cheap.

Next, stricter rent control shrinks available housing in several ways. Nothing new gets built, because it doesn't pencil out. My FIL owned a cute 10-unit apartment building in Berkeley. It was all studios and one-bedrooms, so it was relatively affordable. As the Landlord fees and paperwork became more onerous, he simply stopped renting out units. Once their longest-term tenant died, he sold the building. You know the new landlord jacked up the rental to cover their higher costs. Very recently, a friend's father died, leaving her his pre-prop 13, paid-for house in a desirable part of San Francisco. The rent control laws are so pro-tenant that she is afraid and refuses to rent it out, just as her father did when he moved into a fancy Senior Living complex a couple of years ago. It costs her very little to own, so she merely checks on it regularly and spends the night there when it's convenient, but she has her own house in the suburbs. That's seven bedrooms for one person.

Then there are investors who buy and hold. Lots of them scooped up houses during the crash and are just sitting on them. Most of those properties have doubled or more in value since, so when they do sell, they're not affordable any more either. Thing is, these buyers believe their properties will continue to appreciate at this rate, so not many of them are selling.

Finally: NIMBY-ism plays a role. In my area, developers are building expensive "Stack & Pack" housing near transit, in part because the state is telling them to. People get their knickers in a twist about how greedy the City is and about how much "Things Have Changed". Then they complain that their kids can't afford to live in the town they grew up in, boo-fucking-hoo. Funny, as these buildings come on line*, so far, every one of them is an improvement over what was there before and they fill up fast.

*Lots of projects were approved but not built during the Great Recession, because they couldn't get financing. It was comparatively cheap and certainly easier to just renew their approvals until the economy recovered, so that's what they did. Now they're building and people are screaming that it's too much all at once. If they paid just a bit of attention to local civics (not politics), they wouldn't be so fucking clueless.

zolotiyeruki

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1997 on: February 13, 2020, 11:01:55 AM »
Very recently, a friend's father died, leaving her his pre-prop 13, paid-for house in a desirable part of San Francisco. The rent control laws are so pro-tenant that she is afraid and refuses to rent it out, just as her father did when he moved into a fancy Senior Living complex a couple of years ago. It costs her very little to own, so she merely checks on it regularly and spends the night there when it's convenient, but she has her own house in the suburbs. That's seven bedrooms for one person.
Wow, that sounds bad.  I've heard the tenant rights laws are pretty lopsided, but bad enough to drive landlords out of the market?  I wonder how many other homeowners/potential landlords are in a similar position.  I have a relative who has built up a portfolio of rental homes in the midwest, and even there, with laws that aren't as bad as San Francisco, they've told me stories of the troubles a bad tenant can cause, even in a case of simple non-payment.  Some renters know the legal system inside and out, and have no qualms about squeezing as much free housing as they can out of landlords.

With property as expensive as it is there, why doesn't your friend simply sell the house?

dandarc

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1998 on: February 13, 2020, 11:05:54 AM »
Very recently, a friend's father died, leaving her his pre-prop 13, paid-for house in a desirable part of San Francisco. The rent control laws are so pro-tenant that she is afraid and refuses to rent it out, just as her father did when he moved into a fancy Senior Living complex a couple of years ago. It costs her very little to own, so she merely checks on it regularly and spends the night there when it's convenient, but she has her own house in the suburbs. That's seven bedrooms for one person.
Wow, that sounds bad.  I've heard the tenant rights laws are pretty lopsided, but bad enough to drive landlords out of the market?  I wonder how many other homeowners/potential landlords are in a similar position.  I have a relative who has built up a portfolio of rental homes in the midwest, and even there, with laws that aren't as bad as San Francisco, they've told me stories of the troubles a bad tenant can cause, even in a case of simple non-payment.  Some renters know the legal system inside and out, and have no qualms about squeezing as much free housing as they can out of landlords.

With property as expensive as it is there, why doesn't your friend simply sell the house?
And lose out on all those gains that are going to continue to happen?

Dicey

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Re: Inheritance Drama: You Got Any? Stories Wanted.
« Reply #1999 on: February 13, 2020, 11:21:08 AM »
Very recently, a friend's father died, leaving her his pre-prop 13, paid-for house in a desirable part of San Francisco. The rent control laws are so pro-tenant that she is afraid and refuses to rent it out, just as her father did when he moved into a fancy Senior Living complex a couple of years ago. It costs her very little to own, so she merely checks on it regularly and spends the night there when it's convenient, but she has her own house in the suburbs. That's seven bedrooms for one person.
Wow, that sounds bad.  I've heard the tenant rights laws are pretty lopsided, but bad enough to drive landlords out of the market?  I wonder how many other homeowners/potential landlords are in a similar position.  I have a relative who has built up a portfolio of rental homes in the midwest, and even there, with laws that aren't as bad as San Francisco, they've told me stories of the troubles a bad tenant can cause, even in a case of simple non-payment.  Some renters know the legal system inside and out, and have no qualms about squeezing as much free housing as they can out of landlords.

With property as expensive as it is there, why doesn't your friend simply sell the house?
And lose out on all those gains that are going to continue to happen?
Lol, the market could drop precipitously and she'd still be fine.

Reasons:
1. She's emotionally attached to both houses.
2. Her mom was a semi-hoarder, the City house still has a lot in it.
3. She works in the City, so it's convenient to swing by there to/from work.
4. She has a life out in the suburbs that she's reluctant to leave.
5. The house in the City could really benefit from an update before selling, but DIY is not in her skill set.
6. She has plenty of moolah, she doesn't need the rental income or the profit from the sale of the house.

Slightly off-topic, but relevant: She is crazy frugal and could FIRE any time, but she wants the pension and healthcare benefits she has worked for.