Author Topic: Family Vacation Home  (Read 1652 times)

22U44

  • 5 O'Clock Shadow
  • *
  • Posts: 6
Family Vacation Home
« on: September 17, 2014, 08:46:55 AM »
I have a question that hopefully the more experienced members can help with. My family has had a vacation home for the last 50 years that is now in need of significant repairs. The home has always been treated as "family" property, with all the expenses to date shared between my parents and grandparents. In reality, the property is only in my grandparents name (On my father's side). In recent years, due to my grandparents age, my parents have taken over the majority of the responsibility for the property. My two siblings and I are at the age where our parents want us to be a part of the decision making process for the future of the home, something that makes us feel obligated to share in the financial burden as well. My siblings and I are all completely on board with helping out on the home, but we are uneasy about the fact that only our grandparents name is on the title. My father's only sibling is super bad with money, and we are all afraid that he will be a huge liability when my grandparents die and he gets his inheritance (which includes a portion of the house). The sibling has never contributed any time or money into the home, and is much less attached to it than the rest of the family. I feel that my parents were foolish to invest money into the home given the title and family situation, and I am not willing to get involved without protecting myself from the likely issues when my grandparents die.

Is there a way that my parents, siblings, and I can protect ourselves financially in this situation? Without us involving ourselves and having the repairs done it is likely that the home will suffer serious and irreparable damage, something that we would like to avoid if at all possible.

totoro

  • Handlebar Stache
  • *****
  • Posts: 2101
Re: Family Vacation Home
« Reply #1 on: September 17, 2014, 09:34:32 AM »
How about talking about it with the grandparents and asking them to redo the will so that the house gets left to your parents and more to the other sibling to compensate? 

GizmoTX

  • Handlebar Stache
  • *****
  • Posts: 1408
Re: Family Vacation Home
« Reply #2 on: September 17, 2014, 09:44:20 AM »
Investigate putting the property into a Family Limited Partnership or some other entity that separates the property from the rest of your grandparents' estate & defines the responsibilities for all members. Your grandparents can retain major control until they pass or you can define some other arrangement.

http://www.americanbar.org/publications/probate_property_magazine_home/probate_2009_index/probate_mar_apr_2009_index/rppt_publications_magazine_2009_ma_FamVacationHome.html

Our family is in a partnership owning a hunting "ranch" with other families. It works very well because all financial & upkeep issues are addressed, including leaving the partnership or the death of a partner.


CommonCents

  • Handlebar Stache
  • *****
  • Posts: 2386
Re: Family Vacation Home
« Reply #3 on: September 17, 2014, 09:44:35 AM »
Your parents should talk to your grandparents about this issue.  Are the grandparents aware that the uncle may want to sell the house/not keep it up, etc?  Have your parents tallied up for the grandparents how much they've already spent on the house?  (Are the parents getting some benefits from the house such as staying there, that the uncle doesn't?)  There are many options - for example, they could pay the repairs for a percent of the property (separate from any inheritance), or set up a loan to loan the grandparents money.

But yes, I would not advise putting money into an asset that is not yours, without some clearly defined and written out documentation that is legally binding of how this would work which is agreeable to all.

22U44

  • 5 O'Clock Shadow
  • *
  • Posts: 6
Re: Family Vacation Home
« Reply #4 on: September 17, 2014, 12:28:26 PM »
An FLP seems like it would fit our needs now and set a good foundation as our family grows. My grandparents grew up poor and don't think about money and ownership in "normal" ways. It would have been best to bring this up with them when they were younger and less set in their ways, but now is better than never. An FLP seems like a fair way to structure the property and limits the damage any member can do through poor choices. Thank you for the help.