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Old 05-11-2014, 03:32 PM
 
Location: Midland, MI
505 posts, read 524,030 times
Reputation: 1083

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Our family decided to put my parent's home on the market. Daddy died recently, Mom is in assisted living. A grandchild and his wife are living in the family home and say they want to buy it. Sounds, great, right? We let them pay about half the normal rent and they have been there 2-3 years. Meanwhile, they have been taking nice vacations, spending freely and apparently not preparing for home ownership. So, that's not our business. They can buy it or not, right?

Apparently my nephew thought there would be some huge discount when it came time to buy, an idea his mother (sister #2) did not dispel. My sister (sister #1) and I finally agreed to give them a $10K discount on the house and they would see if they could come up a mortgage. Got a realtor in there and the house is more expensive now than 2 years ago due to a good market.

Now, his mother is mad as hops that we want to use a current market value for the house and that the discount is not bigger. The couple in the house is all upset, in tears because their dream of owning the home is in jeopardy. Er, folks, this is Grandma's money, our inheritance and we have no obligation to put them in the house. Especially since they haven't been helping themselves by saving and doing without. My mom and dad were extremely generous with all of us (and these grandchildren in particular, paying for their education) and no one is owed a thing.

I feel like we have helped these 2 in many ways and that they just want more; now sister #2 and I are at odds. I need to just let it go. My dad just died 2 months ago and would not be happy to see this. And keeping the house in the family will not bring him back.

Please comment, am I just too stubborn about this? There is plenty of money, Mom is not in any jeopardy of not being taken care of.

Oh yeah, the wife just found out she is pregnant (unplanned). Now we are throwing them out in the street of course. (we are giving them more time to figure out their next step but I'm still not caving into the pressure to put them in the house).
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Old 05-11-2014, 03:57 PM
 
6,461 posts, read 6,454,409 times
Reputation: 9799
If grandma is in assisted living, I am sure the money for the home will need to go towards her care. It's premature to start divvying up an inheritance.

If the money is there for her without selling the home for more money and she wants to sell the home to her grandchildren for a reduction, then that portion of savings can come out of the sister whose offspring is buying the home.

It's really up to your mother on what she wants to do.

On a side note is the money worth the permanent rift it will cause in the family? I would let it go and be happy the home will stay in the family. Your mother wants peace and not fighting in the family.

Your mother may take comfort in the fact that succeeding generations will live in this home. Maybe a contract can be written saying that family gets first right of refusal when the house is resold in the future. If they do not sell it to another family member, then the amount of money they originally saved ( plus interest) must be divvied among the original heirs or the succeeding generation.

Last edited by Meyerland; 05-11-2014 at 04:09 PM..
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Old 05-11-2014, 04:05 PM
 
Location: Pennsylvania
16,280 posts, read 10,273,687 times
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Did your dad leave a will giving the house to you guys? If he left no will, it'll vary by state who actually owns the house. Some states, it's you mom's completely. Some it will be equally owned by her and all the kids.
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Old 05-11-2014, 04:18 PM
 
Location: Las Vegas
13,842 posts, read 25,233,642 times
Reputation: 26199
Assuming you own it, put it on the market and sell it to whomever comes up with the money. Doesn't matter if it's an inheritance or used to pay Mom's expenses in assisted living. You should get fair market value for the home. If you don't, and you are the executor, the other payees can sue you for selling their asset for less money than it's worth!

Your relatives have been living large and assuming they would continue to do so. Look up what you need to do to give them legal notice to vacate the property and do it. Their sweet deal is done. Theoretically you could let them stay there till the house sells but this will cause problems. You are better off just evicting them. Then you KNOW when they will be gone.

Expect to spend some money on the house after they leave. You will probably have extensive cleaning/painting/repairs to do.
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Old 05-11-2014, 04:35 PM
 
18,294 posts, read 23,428,633 times
Reputation: 34226
hold your ground- id evict them, give them a right of first refusal and sell it..

ask them, how much are they going to help in paying for grandma's assisted living??


id put finances in writing...(type this question up, and mail to immediate family) " who is going to help pay for grandmas assisted living each month??
if not, the house must be sold -

id stick with todays value,,,


stick to your guns,,, alot of at the moment emotions and rock throwing, but this may be a long term endeavor, and responsibilities must be taken and accounted for,,
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Old 05-11-2014, 05:41 PM
 
Location: Southwest Washington State
21,609 posts, read 14,218,760 times
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Oh, good gracious, don't evict your niece. That's a good way to start a longstanding family fight.

I agree with Meyerland. Forget your inheritance. Your mom needs the profit to finance assisted living. The money is not yours unless she dies before the proceeds are spent. But I think you need a arbiter to spell out the situation with the children. I assume someone has POA? Who is managing mom's affairs? Is there a will?

Find an eldercare attorney or social worker who knows the ropes about inheritance issues and eldercare expenses. You need someone who knows the state law. Then proceed with the sale, and yes, the niece and husband could buy the property, but you need to understand that mom's needs come first. You don't know how long she will live.

When she dies the proceeds would be divided between the offspring. This is what we did. There was a little left after our mom died. But, it was beginning to get close to the end of her savings, the bulk of which were the proceeds of the sale of her last dwelling.

There also might be medicaid issues or other legal issues. I'd go together to the elder attorney. Have all your records, title, expense records together, and ask a million questions. Then together, you need to decide what is best for your mom. It is her asset after all.
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Old 05-11-2014, 06:13 PM
 
3,751 posts, read 7,467,601 times
Reputation: 3711
OP - you are absolutely right. Do not relent.
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Old 05-11-2014, 06:16 PM
 
Location: North Beach, MD on the Chesapeake
33,838 posts, read 41,929,700 times
Reputation: 43212
You've got yourself a mess.

Firstly, forget an inheritance for now.

As others mentioned the proceeds will first off need to be allocated to your mother's care. If she's now on Medicaid I'm surprised your state hasn't already forced a sale. There will also be questions from Medicaid if it's sold for much under market. I know you didn't mention Medicaid but keep that in mind.
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Old 05-11-2014, 06:29 PM
 
10,807 posts, read 8,021,516 times
Reputation: 16985
Quote:
Originally Posted by hhwtm View Post
Please comment, am I just too stubborn about this? There is plenty of money, Mom is not in any jeopardy of not being taken care of.
No you're not being stubborn. And previous posters apparently missed the part re the house proceeds not being needed for mom's assisted living care.

You mentioned Sister #1 (apparently in agreement with you) and Sister #2, the renters' mom. So there are 3 siblings and the house proceeds will be split 3 ways?

Since Sister #2 is the one who's adamant about the couple getting the house at a large markdown from market value, it seems fair to let that markdown come out of her share, right?

Just price the house at 66.6% of the appraised market value + some to cover selling expenses, then young couple gets a sizable discount, making Sister #2 happy, and you and Sister #1 split the proceeds.

Example: say the market value is 115k, and after sales expenses, etc., you net 100K. Divided 3 ways, that''s 33K and change per sibling. But you subtract Sister #2's share upfront and sell the house to the kids for 82K. Actually you could probably discount it even more, since you'll probably save on sales expenses.

Since this is not actually an inheritance be sure and consult an attorney and an accountant who can advise you re the legal and financial considerations. For fairness sake, their fees should be equally paid by all three of you.

edit to add: If the intent is to put the proceeds in an account for your mom, I'd suggest you still take the above route. The end result will be your mom ends up with less money than you feel she's entitled to. And you and Sister #1 might never recoup that agreed-upon discount. That's probably something you'll just have to live with; just make sure Sister #2 knows it's on her.

Last edited by biscuitmom; 05-11-2014 at 06:52 PM..
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Old 05-11-2014, 06:51 PM
 
Location: North Beach, MD on the Chesapeake
33,838 posts, read 41,929,700 times
Reputation: 43212
Quote:
Originally Posted by biscuitmom View Post
No you're not being stubborn. And previous posters apparently missed the part re the house proceeds not being needed for mom's assisted living care.

You mentioned Sister #1 (apparently in agreement with you) and Sister #2, the renters' mom. So there are 3 siblings and the house proceeds will be split 3 ways?

Since Sister #2 is the one who's adamant about the couple getting the house at a large markdown from market value, it seems fair to let that markdown come out of her share, right?

Just price the house at 66.6% of the appraised market value + some to cover selling expenses, then young couple gets a sizable discount, making Sister #2 happy, and you and Sister #1 split the proceeds.

Example: say the market value is 115k, and after sales expenses, etc., you net 100K. Divided 3 ways, that''s 33K and change per sibling. But you subtract Sister #2's share upfront and sell the house to the kids for 82K. Actually you could probably discount it even more, since you'll probably save on sales expenses.

Since this is not actually an inheritance be sure and consult an attorney and an accountant who can advise you re the legal and financial considerations. For fairness sake, their fees should be equally paid by all three of you.
I didn't miss it but I had a similar situation where assisted living was paid for. That is until the money ran out. Then the house had to be sold. Then that money ran out. Just as Medicaid kicked in Mom died.
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