My mom recently called a meeting with me and my two sisters. She wanted us to all be clear about what she wanted done, if something happens to her. She owns two houses. One of the houses she rents to one of my sisters (Poorsis) for $x a month. Poorsis must pay a lump sum of $y, if she wants to own the house. If she hasn't paid it, she owes it to me and Richsis. The monthly rent does not contribute to this, and it must be paid as a lump-sum. My sister is allowed to get a mortgage for that amount, when/if her credit improves enough. There's no worry about this. My other sister and I have been aware of this agreement for some time, and we don't really care. Poorsis is getting a fantastic deal on this house ($y is easily less than half the actual value of the house at this time), but it's my mom's house and she doesn't need to be "fair" nor do we ask her to be. Neither of us consider it to be unfair, really. If the tables had been turned, it could have been either of us getting that deal.
As for the other house, the one my mom lives in, she wants it to stay in the family and says we each get a third of it.
- Me: I'll make sure that it stays in the family, but I'm not interested in co-owning a house. I'll probably just buy out Poorsis's and Richsis's interest in the house.
- Richsis: Hey! I want a rental property. We should rent it and split the income.
- Me: I'm not interested in sharing that sort of arrangement. If you want it as a rental property, you can buy out my interest in the house. It's nothing we need to worry about right now, and hopefully not for a long time either. To be honest, though, with the way we both manage our money, which one of us will most likely be in a position to buy the other person out?
- Richsis: {brief unhappy glare that quickly passes} True enough. You'll probably have the cash, and I can always use that for a down-payment on my own property for a rental. You can buy me out, at fair market value.
- Me: Of course. Or, you could take a mortgage out on it, and pay me off. Depends on where we each are and what we want at the time. I just don't want to try and manage a single-family home with three owners. I just promise that one of us will keep it, and we won't sell it to a stranger and split the cash.
My mom was happy with that. And, we talked about other stuff. I encouraged my mom to get it in a written will, just to make sure. We love my mom, but none of us really need the house.
Poorsis, despite her nom de guerre, isn't really poor. She and her husband went through a tough period and they are getting back on their feet. Their biggest struggle is that they have three kids, and want many more. They moved into the house while struggling, and have put a lot of sweat-equity into it as well as some real money improving it. My mom helped them out, and they haven't taken advantage. She pays a fair rent-price, and wants to keep the house. It's the one we grew up in as kids.
Richsis, despite her nom de guerre, isn't really rich. She just lives like she is. Her husband makes more than me and my wife, combined. She makes even more than her husband. They have money, tons of it, and they spend it all. She could, easily, out-save me while living a more luxurious life than I ever could. She won't. She bought twice as much house as I have, despite having fewer people to live in it. They lease (I think) both their cars. One of the payments is $700 a month. She spends so much money, and doesn't save much of anything. I encourage her, all the time, to be wise with her money. She has an accounting degree and works with budgets all day! She says she has a budget, in that she doesn't spend more than she brings in. *sigh* She's the one who just doesn't get it. She could be retired and have several rental properties, without my mom's house at all, if she'd change her focus to building that sort of wealth and not living like she's wealthy.
I love both my sisters, and they love me. We're very direct with each other (as is obvious), but we can be because we all know we love each other and wouldn't screw the others over.