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It does happen. Look at Prince William and Prince Harry. They used to be very close until Harry married Meghan Markle. Now he's left England.
I liked your comment! It's so on target.
OP, something to consider. When my mother was close to 90 years old, I was sixty and my sister was fifty-seven. We both have serious back issues. Neither of us could change the diapers or lift up on a 120 pound woman out of bed.
@ SouthernSusana
I liked this comment too!
Quote:
Most caretaking done by family members is done by women. And it is frequently unpaid work.
My sister couldn't afford to leave her job to care for my mother. It wasn't her salary as much as giving up her pension and her family's healthcare plan.
Both my father's and mother's family had terrible divisions from my grandparents wills. It destroys families. I suggest reading "Beyond the Grave" before making any decisions.
Met with our estate attorney and a real estate attorney. The end result is a recommendation that simplifies things along the lines of what all of you suggested; 50/50.
The Attorneys both described the problems with ever putting the children on Title. We never intended to do that but we had not thought about situations such as possible actions against them and therefore the estate, Property taxes reassessed... etc..
We title the house in our names (Trust) We were always going to do this.
My daughter and SIL pay a reduced "rent" to us. 50% of market. (still less than any mortgage payment they may have made) They can do whatever they want to the house to increase its value or simply do what they like.
That Rent is passed to my SON directly as a cash benefit. This equalizes the financial benefits to each party WHILE we are alive and before the estate is split.
Upon our demise, the house is appraised and they must agree to the appraisal, written into the Will are specific instructions on this.
The entire estate is split 50/50.
My Daughter and SIL (the entire estate including my Son) benefit equally from any increased value of the home.
If my Daughter wants to buy the house form the estate she can use the "monetary" proceeds from the Estate to buy her brother out. He gets the cash, she gets the house.
They can collectively agree to sell the house and EVERYTHING is split 50/50
Scenario:
- The last surviving spouse (my wife and I) passes.
--If the estate has $1,000,000 of assets other than the house and the house is appraised at $2,000,000 A total of $3,000,000 in value
--The cash is split 50/50 - $500,000 to each child. The house is split 50/50 $1,000,000 in value each.
If my Daughter wants to own the house, she can give her $500,000 from the estate to my Son
She then owes my Son $500,000 for which she can get a mortgage or use other funds to pay him/the estate.
--If they ever want out before that time. They move out. Hopefully having saved money thanks to the reduced rent which could have been a much more costly mortgage.
And my Daughter will still get 50% of the value of the house when we pass.
Scenario:
- If my children decide to sell the home when we pass:
Everything is split 50/50
Thanks so very much. I have appreciated sharing with and hearing from you all.
OP, you mentioned "they" will be caring for you and your wife as you age, that there is some sort of "understanding." Who is the "they" here? Your daughter and her husband? Your daughter and son equally even though he doesn't live in the compound?
If it is primarily your daughter who is going to do the caregiving, you need to factor that into your ideas of fairness. Most caretaking done by family members is done by women. And it is frequently unpaid work.
Likelyhood is that I will be caring for my Wife at some point. Then it will be Me that needs the care. If they can't or don't wish to handle it, I'll pack up and get out, and use my savings to go into LTC. I wont care by then, about the fairness, except to know that I've shared it equally between them in the end. Nor will I care about where I am living, (if they end up having that attitude, I would just as soon be living elsewhere anyhow)
Met with our estate attorney and a real estate attorney. The end result is a recommendation that simplifies things along the lines of what all of you suggested; 50/50.
The Attorneys both described the problems with ever putting the children on Title. We never intended to do that but we had not thought about situations such as possible actions against them and therefore the estate, Property taxes reassessed... etc..
We title the house in our names (Trust) We were always going to do this.
My daughter and SIL pay a reduced "rent" to us. 50% of market. (still less than any mortgage payment they may have made) They can do whatever they want to the house to increase its value or simply do what they like.
That Rent is passed to my SON directly as a cash benefit. This equalizes the financial benefits to each party WHILE we are alive and before the estate is split.
Upon our demise, the house is appraised and they must agree to the appraisal, written into the Will are specific instructions on this.
The entire estate is split 50/50.
My Daughter and SIL (the entire estate including my Son) benefit equally from any increased value of the home.
If my Daughter wants to buy the house form the estate she can use the "monetary" proceeds from the Estate to buy her brother out. He gets the cash, she gets the house.
They can collectively agree to sell the house and EVERYTHING is split 50/50
Scenario:
- The last surviving spouse (my wife and I) passes.
--If the estate has $1,000,000 of assets other than the house and the house is appraised at $2,000,000 A total of $3,000,000 in value
--The cash is split 50/50 - $500,000 to each child. The house is split 50/50 $1,000,000 in value each.
If my Daughter wants to own the house, she can give her $500,000 from the estate to my Son
She then owes my Son $500,000 for which she can get a mortgage or use other funds to pay him/the estate.
--If they ever want out before that time. They move out. Hopefully having saved money thanks to the reduced rent which could have been a much more costly mortgage.
And my Daughter will still get 50% of the value of the house when we pass.
Scenario:
- If my children decide to sell the home when we pass:
Everything is split 50/50
Thanks so very much. I have appreciated sharing with and hearing from you all.
It sounds like you've come up with a reasonable resolution.
Likelyhood is that I will be caring for my Wife at some point. Then it will be Me that needs the care. If they can't or don't wish to handle it, I'll pack up and get out, and use my savings to go into LTC. I wont care by then, about the fairness, except to know that I've shared it equally between them in the end. Nor will I care about where I am living, (if they end up having that attitude, I would just as soon be living elsewhere anyhow)
Given your numbers, it sounds as if you have plenty of money to hire help. Most of us don't so it is a financial sacrifice.
Trust me. You can only do solo caregiver for a very short time. Someone will have to help you, either someone paid or unpaid.
There is no fairness if one of them becomes even a partial unpaid caregiver out of love.
Don't kid yourself. And you will care if you end up in a nursing home alone.
No negativity. It's commendable that you want to do this for your kids as long as your trust is owning the property and you are paying the mortgage.
I'm not keen on any of the 3 options. I think they are way too complicated and don't take into consideration that many unforeseen things can happen in the next 30 years that can make a horrible mess of your estate when the time comes.
Not the least of which is that the surviving spouse can redo the trust whichever way he/she wants anyway unless you make the trust irrevocable which is a bad idea because you want some flexibility.
My suggestion is set up the trust so that when the surviving spouse dies the property gets sold and all the money in the estate gets divided between your son and daughter. Clean and simple. No gimmicks. No obligations that either may be unable to fulfill. No hard feelings. No hostility. No disputes. No litigation. It's just money divided equally and each can go buy whatever they want to live in.
This is a more reasonable suggestion. You don’t want your children to squabble after your death.
Even more pressing from my point of view is to get your SIL out of the arrangements if you can in case of divorce? Things happened.
Make him sign a post-nuptials or set up a trust in a certain way?
You figure out details
What about a spendthrift clause? Imagine your daughter or a SIL being sued in case of accident, a catastrophic medical bill for one of them or children? What is then? Your son could be affected if the whole arrangement is not thought through...
What if you both need a long term care or having catastrophic bills? There could be Medicare implications in certain states.
I am sure you will get a lot of good suggestions.
I would consult whatever the arrangements you choose with the estate as well as tax and trusts attorneys
It seems to complicated to foresee any potential pitfalls, including legislation changes..
What about keeping it all in your name and rent the house to your daughter in law ? You could keep a portion of their money in her and SIL IRA accounts 50% /50% to be fair to your SIL?
Or some other creative solutions depending on yours and theirs finances and goals?
Still, make sure you have a great umbrella policy for legal protections and figure out LTC / health costs implications...
I had an acquaintance whose family gave him a free land to build a house next to his parents.
Not sure if the land was subdivided- I think so.
They shared a driveway between 2 houses too.
My friend went through a divorce and the value of the house and the land had to be split.
He still lived in the house, had a joint custody- I am not sure what the monetary arrangements were with his ex-wife at that point.
He suffered an accident at age 45 and died.
The ex- sold the house as the child was a father’s heir and moved out.
The parents now are sharing the proximity and the driveway with the strangers.
The parents meant well: a cautionary tale. Life is very unpredictable sometimes.
In the parents’ case the road to he!! was paved with good intentions as they say.
Met with our estate attorney and a real estate attorney. The end result is a recommendation that simplifies things along the lines of what all of you suggested; 50/50.
The Attorneys both described the problems with ever putting the children on Title. We never intended to do that but we had not thought about situations such as possible actions against them and therefore the estate, Property taxes reassessed... etc..
We title the house in our names (Trust) We were always going to do this.
My daughter and SIL pay a reduced "rent" to us. 50% of market. (still less than any mortgage payment they may have made) They can do whatever they want to the house to increase its value or simply do what they like.
That Rent is passed to my SON directly as a cash benefit. This equalizes the financial benefits to each party WHILE we are alive and before the estate is split.
Upon our demise, the house is appraised and they must agree to the appraisal, written into the Will are specific instructions on this.
The entire estate is split 50/50.
My Daughter and SIL (the entire estate including my Son) benefit equally from any increased value of the home.
If my Daughter wants to buy the house form the estate she can use the "monetary" proceeds from the Estate to buy her brother out. He gets the cash, she gets the house.
They can collectively agree to sell the house and EVERYTHING is split 50/50
I think #3 is brilliant!
Thank you for coming back to share the professional advice you received and what you decided.
This is a more reasonable suggestion. You don’t want your children to squabble after your death.
Even more pressing from my point of view is to get your SIL out of the arrangements if you can in case of divorce? Things happened.
Make him sign a post-nuptials or set up a trust in a certain way?
You figure out details
What about a spendthrift clause? Imagine your daughter or a SIL being sued in case of accident, a catastrophic medical bill for one of them or children? What is then? Your son could be affected if the whole arrangement is not thought through...
What if you both need a long term care or having catastrophic bills? There could be Medicare implications in certain states.
I am sure you will get a lot of good suggestions.
I would consult whatever the arrangements you choose with the estate as well as tax and trusts attorneys
It seems to complicated to foresee any potential pitfalls, including legislation changes..
What about keeping it all in your name and rent the house to your daughter in law ? You could keep a portion of their money in her and SIL IRA accounts 50% /50% to be fair to your SIL?
Or some other creative solutions depending on yours and theirs finances and goals?
Still, make sure you have a great umbrella policy for legal protections and figure out LTC / health costs implications...
It is not easy to make our dreams come true!
Perhaps you didn't read my last update. We've dealt with the liability issues as the property will always be Titled in our Trust's name until we pass.
Quote:
Originally Posted by Cloudwalker
Great solution, and thanks so much for coming back and telling us all what you decided in the end. It's always nice to find out how things turn out.
Yes. And I appreciate the input.
Quote:
Originally Posted by jackmichigan
It sounds like you've come up with a reasonable resolution.
Yes. We think so.
Quote:
Originally Posted by ImmerLernen
I think #3 is brilliant!
Thank you for coming back to share the professional advice you received and what you decided.
Yes isn't it? It was my lovely Wife's idea as we were discussing with the attorneys! They suggested a reduced rent as some way to compensate the estate for the benefit of being able to live in a large SFH without having to qualify, and pay for a mortgage. She took it a step farther and instead of adding that money back to the estate, thought that if my Daughter and SIL are benefitting today, so should he. He said that exact thing "That's Brilliant!".
Thank you. Mutual Respect for your time and input..
Last edited by jamesly; 03-16-2021 at 10:58 AM..
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