Author Topic: Selling Family Cottage  (Read 1774 times)

whitethunder

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Selling Family Cottage
« on: March 11, 2018, 02:10:19 PM »
Hi,

I'm wrestling with the idea of selling our family's cottage that I am supposed to one day inherit. My parents' sentimentality is costing them enormous amounts of money and stress, and I'd like to tell them to sell it. I'll write a brief background of the situation and would appreciate any responses.

Mom and dad are entering into old-age and are having money problems; I would like to help them because I care, and also because should they die before me I will have pieces to pick up. In essence, my father grew up poor and became good with money while my mother came from more wealth and was never required to give it much thought. Due to poor health, my dad "lost" his job at about 55 but in hindsight I know that he was close to being FIRE'd anyways. My mother on the other hand has continued working and has been making $150,000 for at least ten years straight; she's learned how to manage money better over the years but continues to make abysmal decisions (I love you, mom). They invested very conservatively over the course of their lives.

These two wonderful people paid for my university education and gave me a great childhood. The problem began in 2014 when my mom wanted to buy a cottage. My dad recognized that it was an awful time to buy given his recent termination, my mom's age, and their shared reluctance to rent it out to non-family members. My mom however made the point that because she had the wages to make the purchase, it was her decision to make; that is a whole other conversation, of course. Fast-forward to 2018, and my parents have few investments and are spending a lot of their savings including some principal for COL and cottage maintenance. My father planned their retirement and financial independence well, but never factored in the expense of buying a second property in his 50s. They have put in at least $100,000 in renos since 2014 and there are still issues which require time, money, and attention: all things that they'd rather give elsewhere as they approach their 70s. My dad has had heart attacks in the past and is losing a lot of sleep over this issue.

My parents want the cottage to "stay in the family", and I am an only-child. While I love the lake and have fond memories of the area, I don't want the hassle and expenses that will come with the cottage. I would prefer to sell it and invest the money in my own small-business than to use real-estate to build wealth. Furthermore, I live in a beautiful area and there are world-class beaches and trails within 30 km of me while our cottage is over 700 km away in another province so I don't know how often I would personally enjoy it. I also do not want to see my parents suffer for me any more than they already have; I have a career and live frugally, so barring any catastrophe I should be fine.

My parents are going through the ringer to keep this property in our family, and I want to tell them I don't care to keep it. What would you do? Am I crazy for thinking this way?

K-ice

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Re: Selling Family Cottage
« Reply #1 on: March 11, 2018, 02:32:49 PM »
Since the cottage is quite new to the family I donít quite understand the emotional attachment.

Iíd make it clear to your parents that you enjoy spending time with them there but it wouldnít be the same with them gone.

They should not be holding on to the cabin for your sake.

If it is currently a burden to them, and it sounds like it is, I would be clear & supportive in telling them itís ok to sell it and probably even a good idea financially. 

Sibley

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Re: Selling Family Cottage
« Reply #2 on: March 11, 2018, 04:14:30 PM »
Just tell them that regardless of what they do, you do not want it and if you do end up owning it at some point, you'll just sell it then. If your mom is determined to own this cottage, then there really isn't much you can do. But at least by making it clear that you don't want it and won't keep it if you do end up with it, there's a better chance they'll sell it.

And yeah, I get why your mom bought it. No, she's not good with money. She may be less bad than she used to be, but she's not good.

Psychstache

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Re: Selling Family Cottage
« Reply #3 on: March 11, 2018, 04:28:54 PM »
Tell them in no uncertain terms that you have no interest in owning the cottage and that if there comes a time that you end up owning it, it will go on the market ASAP, so any romanticized notions of the whitethunder family cottage getting handed down from generation to generation is not going to happen.

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whitethunder

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Re: Selling Family Cottage
« Reply #4 on: March 12, 2018, 09:59:43 AM »
Thanks for your impartial replies. I feel bad that my parents spent a lot of time fighting over this cottage which was supposed to be for my ultimate benefit, and now I'll be telling them I don't want it. At my core, I don't want to tell my mom she made a huge mistake. It's in all our best interest however to sell. The truth hurts sometimes.

GizmoTX

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Re: Selling Family Cottage
« Reply #5 on: March 13, 2018, 12:27:20 PM »
Ultimately they'll be forced to sell something, but it may come at altogether the wrong time. It would be different if they were living in the cottage with no other house to support. Soften the blow by suggesting that you couldn't possibly enjoy the place with all the worries about the costs & their health, & that the best way to help you would be to maximize their resources for the life they have remaining. Sounds like your dad gets this but your mom acts like she'll be able to work forever. Whenever she falls back on the "it's all for you", you do have to tell her that it's her dream, not yours.

whitethunder

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Re: Selling Family Cottage
« Reply #6 on: May 19, 2018, 04:21:07 AM »
Update: my mom says she will be retiring within a year when my dad's GICs come due. I've determined that I like the idea of a family cottage, and also that I do not want the responsibility until I reach a greater level of financial independence. For example, to become responsible for the cottage's taxes/bills/maintenance within the next five years while I start my career and build my stash would be ruinous. At 40 however, I would be much better poised to pay for the cottages expenses while also giving my time to its upkeep. It would also be a great piece of property to enjoy with a family of my own.

The issue here is with timing. My parents are in their 60s in poor health, and I am 24. Their romanticized notions do hold pragmatic value with which I can appreciate, but they cannot be fully realized until I reach a greater level of financial independence than where I am. I'm worried that it will all be thrust upon me before my income can handle it. I am going to tell them this and suggest that they update their will accordingly. Question: is there a way to defer the receipt of an inheritance by a specified timeline (eg. 10 years)?

former player

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Re: Selling Family Cottage
« Reply #7 on: May 19, 2018, 05:25:26 AM »
That's a quick change of mind in two months, from not wanting the cottage to (sort of) wanting it.

Short answer: the only way to defer an inheritance is for the people leaving it to you not to die yet.

There are two separate problems here.  The first is the financial and emotional cost to your parents of keeping the cottage.  You love and are grateful to your parents, so anything you do should be aimed at helping them while they are alive.  In your place I would be telling them that what you want most is that they should make decisions about the cottage based on what is best for them during their lives rather than you once they are gone.  You should also suggest that if they want to keep the cottage they should limit putting further money into the cottage to what is necessary to maintain it structurally, rather than making any upgrades and extensions, etc.  And if they want to keep it they should look into getting a management company to rent it out when they are not there in order to reduce the stress of managing it and to lessen the cost to them of owning it.

The second problem is what you do when/if you inherit.  Frankly, you don't need to think about this until both your parents are dead, which hopefully will not be for a while.  When/if you do inherit is the time to do the maths on keeping or selling, renting it out or living there, and so on.  You've no idea now what your situation will be when you inherit, as to your finances or relationships and family, so there's nothing to be done about it - the phrase I like that applies here is "don't borrow trouble".

Sibley

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Re: Selling Family Cottage
« Reply #8 on: May 19, 2018, 09:19:52 AM »
Whitethunder, I do have to ask what you think you're going to accomplish by coming back and admitting that you've fallen to the consumer sucker impulse? Seriously, do you think we're going to tell you to go for it, a 2nd home isn't going to cost that much? Of course we're not. You do not, at this time or any point in the future, need to own a cottage as a vacation home. If you really want to spend a week at a cottage, then you can RENT ONE. If at some point in the future you decide to buy a cottage and live there full time, then that's perfectly acceptable (assuming you don't overpay, can afford maintenance, etc).

I get it, you're 24 and young and dumb (yes you are, you just don't realize it yet). Slap some sense into yourself. Tell your parents that you love them, you want them to be happy and financially stable, and that they should not make any decisions about the cottage with you in mind because you do not need a 2nd home.

whitethunder

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Re: Selling Family Cottage
« Reply #9 on: May 21, 2018, 08:56:03 AM »
I'm really glad you replied to my post, Sibley and former player. Yes, I've had somewhat of a change of heart. What brought me to this forum was an insecurity about money, and I've managed to learn enough, change my lifetsyle enough, and save enough over the last year that I'm less vulnerable to serious financial setbacks than before. I am also less stressed at work and maybe this is why the consumer sucker impulse has returned. Ultimately, I have a vision for my life and I don't want to get slammed with unexpected costs and responsibilities when my parents die.

My mom is now saying she may not retire for another couple of years. My dad gets upset if I mention giving back our family car to them or selling the cottage. This may be more an issue of a young man breaking from his parents' expectations for him than one of financial know-how. When the time comes and if the cottage is in my hands, I will deal with it as sensibly as I can. Thanks again for the replies.

Sibley

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Re: Selling Family Cottage
« Reply #10 on: May 21, 2018, 10:09:00 AM »
Even if they try to leave a house or 3 to you, legally you can refuse to inherit. (Or be an executor, for that matter.) The property could then be sold and the proceeds distributed along with the rest of the estate.

Growing up is hard. It's hard for you, and it's also hard for your parents. If you're still living with them, moving out will help with the transition. It's a lot harder to think of you like a child when you're no longer living with your parents. In the meantime, keep working on  financial discipline. Just because the heat is off doesn't mean you should slack off.