Co-owning real estate?

[steve-in-kville]

I think that the only way to be sure that no one will feel like they got the short end of the stick is to sell the property on the open market, with the agreement of all owners, then split up the proceeds. But sometimes agreement to sell is slow in coming, and sometimes the one holding out changes. (Ever watched the old film "Twelve Angry Men"?)

This is sorta what happened when my grandmother passed away. The siblings agreed to put the farm up on auction so there were no feelings down the road.

[Josh]

I think that the only way to be sure that no one will feel like they got the short end of the stick is to sell the property on the open market, with the agreement of all owners, then split up the proceeds. But sometimes agreement to sell is slow in coming, and sometimes the one holding out changes. (Ever watched the old film "Twelve Angry Men"?)

This is sorta what happened when my grandmother passed away. The siblings agreed to put the farm up on auction so there were no feelings down the road.

Sad how this happens, as the old family land gets split up and eventually turned into yet more strip malls and suburban housing developments.

[Neto]

I think that the only way to be sure that no one will feel like they got the short end of the stick is to sell the property on the open market, with the agreement of all owners, then split up the proceeds. But sometimes agreement to sell is slow in coming, and sometimes the one holding out changes. (Ever watched the old film "Twelve Angry Men"?)

This is sorta what happened when my grandmother passed away. The siblings agreed to put the farm up on auction so there were no feelings down the road.

Sad how this happens, as the old family land gets split up and eventually turned into yet more strip malls and suburban housing developments.

Yes, I actually do agree. I know that sounds contrary to what I said before, but I said that in consideration of family problems I've witnessed, where there is too often either someone who "laughs all the way to the bank", or someone on the other side who feels cheated (and too often really was). Ideally, I think, when land or other assets go to one child there should be an agreement to share the profits when or if the property is sold, or to somehow compensate those who have graciously allowed a sibling to have the property (or business) at a greatly reduced cost. I just heard of another case recently, where one son got the farm, then 15 years later decided to sell out (at millions), and this put the parents out of the house they had been promised for as long as they still lived. The the one who sold the farm went to the other children and said that everyone needed to chip in to support their parents in their upper years (to pay for housing for them). In the case of my own parents, none of us lived close to the home place, so none of us "wanted it", & it was sold. My parents have been dispersing those funds as they see fit (now just my Mom, after my dad died a year ago). I've seen a lot of good farm land go under houses or worse, parking lots. (The best farm land in the area where I grew up was put under blacktop many years ago, for a Walmart. And they weren't even there very long before they abandoned that location for another place that seemed more promising for their "bottom line". But the farm is forever gone.)

Of course we are also just sojourners on this earth, and in my family could point to many lost ancestral places that were called "home".

[Ken]

This is sorta what happened when my grandmother passed away. The siblings agreed to put the farm up on auction so there were no feelings down the road.

Sad how this happens, as the old family land gets split up and eventually turned into yet more strip malls and suburban housing developments.

Yes, I actually do agree. I know that sounds contrary to what I said before, but I said that in consideration of family problems I've witnessed, where there is too often either someone who "laughs all the way to the bank", or someone on the other side who feels cheated (and too often really was). Ideally, I think, when land or other assets go to one child there should be an agreement to share the profits when or if the property is sold, or to somehow compensate those who have graciously allowed a sibling to have the property (or business) at a greatly reduced cost. I just heard of another case recently, where one son got the farm, then 15 years later decided to sell out (at millions), and this put the parents out of the house they had been promised for as long as they still lived. The the one who sold the farm went to the other children and said that everyone needed to chip in to support their parents in their upper years (to pay for housing for them). In the case of my own parents, none of us lived close to the home place, so none of us "wanted it", & it was sold. My parents have been dispersing those funds as they see fit (now just my Mom, after my dad died a year ago). I've seen a lot of good farm land go under houses or worse, parking lots. (The best farm land in the area where I grew up was put under blacktop many years ago, for a Walmart. And they weren't even there very long before they abandoned that location for another place that seemed more promising for their "bottom line". But the farm is forever gone.)

There is a family farm in my family that has been passed down since about the Civil War. But never as part of any inheritance. At least in the past several generations. When my grandfather retired from farming he sold the farm to the son who wanted to take it over and they arranged some sort of self-financed mortgage such that my uncle's mortgage payments to my grandfather was what became their retirement income. My grandparents both died about 6 months apart about 15 years after they had passed the farm on to my uncle and I think there was some sort of final balloon payment due to the "estate" at that time, but otherwise the family farm was never part of any inheritance. It has been passed on down to my cousin, and more recently to his son since then, always the same way through private family sale as everyone is still living.

By contrast on the other side of the family there was also a family farm but neither my father nor any of his brothers wanted to take over the farm. Partly because my grandfather was extremely hard-headed and didn't plan to retire. He was going to stay right there and supervise whatever son wanted the farm. When that didn't happen he eventually sold it on very good terms to some younger couple who gave them a big song and dance about wanting to get into family farming. He was taken for a ride because a few years later they sold it to developers for millions and it is now subdivisions. When my grandfather finally died only token amounts of his estate (mostly the farm sale proceeds) went to each of his children and the bulk of it went to his church which left a lot of hard feelings. Because a bunch of my uncles felt that it was they who had actually built that farm through the sweat of their own labor while my grandfather did a lot of running around "conducting business" I think one of my uncles actually would have been interested in taking over the farm had my grandfather actually been willing to retire and move away to let them run things as they saw fit. And it might still be in the family. But when it became clear he had no intention of doing that it didn't happen. None of them wanted to spend the next 10-20 years working "under" my grandfather.

I think no matter how hard you try, inheritances can be tricky things that can cause a lot of grief and headache. And a lot of these things are much better decided and accomplished before one dies than after. Even if it is uncomfortable to deal with.

[RZehr]

The best way is that the heirs understand that an inheritance is not the same thing as a birthright. The healthiest way for heirs to view it, is that inheritance is a gift, and not a heritage.

[Ernie]

Anabaptist Foundation and several Anabaptist attorneys I know of are glad to help people write up wills and deeds in a way that respects Anabaptist values and makes for less headaches down the road. My dad did something of this nature and had everything all placed in a trust before he was killed instantly in an accident. His work ahead of time has been a great gift to us children.

[Ken]

The best way is that the heirs understand that an inheritance is not the same thing as a birthright. The healthiest way for heirs to view it, is that inheritance is a gift, and not a heritage.

That is true. However I think family farms are particularly tricky because children are often major sources of free labor in their development and operation. And so understandably feel they have a bigger vested interest it than they might for inheritances and family wealth that they had no contribution in building.

[steve-in-kville]

This is all great info, thank you.

I think when there are written arrangements, its good to loop all the siblings in as to what is gonna happen when it comes to settling the estate. I've known of situations, in very conservative Anabaptist settings, where mom signed off on some changes in her last days and no one knew until way later that a property that was supposed to stay in the estate was now going to a married daughter and her husband.

Did not help family relations at Thanksgiving dinner

[Josh]

I have a rudimentary common purse, yet co-owning real estate is just too much of a quagmire. Instead I would look for ways to have separate ownership of each parcel. It is a real pain to get mortgages, for example, on co-owned real estate. So are rather basic things like property liability insurance.

If I ever went to the trouble to establish an apostolic community, I guess that entity could own property.

A trust that allows the property to flow from one person to another if someone dies, on the other hand, is fairly simple. Putting two deeds of two unrelated people is not. Another problem is severe tax consequences from having people who aren't spouses co-own real estate. You end up needing a good lawyer to figure it all out.

[violet]

I think it is awesome that you wish to help out a child.

From my point of view...I think I would try to find a way that over the years, your ownership because less and less and his ownership works toward complete ownership....this way you are really helping out the child and it avoids all the pitfalls.

Hoping it works out.