Posted by VJ -(ga) on March 18, 2003 at 11:18:50:
Duhh! I completely forgot about a land trust. You have great ideas when it’s someone else’s problem. But when it’s your issue, your mind goes blank.
This way, they know I’m not trying to cheat them but trying not to be slammed in the end.
Best way for siblings to hold title - Posted by VJ -(ga)
Posted by VJ -(ga) on March 18, 2003 at 10:05:05:
Right before our mother died, she deeded the house over to one of 3 children for a quick transfer(who is also the only one living at the house). We all decided to put all of our names on the deed, which hasn’t been done yet. My problem is this, I’m the responsible one. I pay the bills(utility, tax, insurance, etc.) I’m also the only one making an effort to raise money to pay the bills. The one who lives at the house is in college and has no job. Our other brother lives out of state and owes us money.
We wanted to be fair by putting everyone’s name on title, but I don’t want to set myself up to continue paying everyone’s share if they end up not paying.
Is there a way to hold title that would insure everyone getting their share, but at the same time allowing the responsible party(bill payer) majority control? If the one who lives there doesn’t pay his share of the bills, he shouldn’t be allowed to live there. Or is there a way to hold title that would hold everyone responsible for their own share and not responsible for the other’s share?
By the way, house is paid for, but has a few small leins. I also figured, since I’m currently paying for 2 homes, I might as well sell my mortgaged home and move into the note free home.
Re: Best way for siblings to hold title - Posted by Don Dion
Posted by Don Dion on March 19, 2003 at 02:07:17:
This is an easy one. Just set an interest rate that would be a good return for you and keep records of how much you have spent. Each year send a letter to the other two telling them the current balance and offering to let them bring their share back into balance. When the property sells you get your cash you put in plus the interest earned on your investment. Compounded simple interest of course.
Best way for siblings to hold title - Posted by David Krulac
Posted by David Krulac on March 18, 2003 at 18:21:07:
you have more problems than you know:
getting a property as a gift and losing the stepped up basis costs you money in the form of federal taxes.
imho, holding a property either in individual names, an llc, corp, flp, etc. when only one person is a responsible person is a accident waiting to happen.
1 option would be to sell the property split the proceeds and let everybody go do what they want with the money.
another option is to buy out the irresponsible people and let them do what they want, which usually is blow the dough.
I’ve seen people blow their inheritance on gambling, day trading, pizza, cars, drugs and high living, only to be worse off when the money runs out than they were before getting the windfall.
Re: Best way for siblings to hold title - Posted by Phil (CO)
Posted by Phil (CO) on March 18, 2003 at 10:56:59:
I’m not sure that it’s the best way, but I would put the house in a land trust, with you as the trustee (which means that you would be responsible for making sure that all house related things are taken care of).
The benficial interest in the trust would be divided between the siblings, I assume in equal portions, but it wouldn’t have to be.
Another nice thing about the trust is that in the trust agreement, you could spell out all of the “rules” that you are worried about. For example, the first thing that you would put in there is that the trustee (you) is allowed to live in the house rent-free as compensation for your work as trustee. You might have other things written in about what happens when the others don’t pay, for example the beneficial interest might change.
You would definitely want to have an attorney draw up the papers, but you would first want to get all of your concepts down on paper to give the attorney some direction.
Again, I’m not sure that this is the “best” way, but if it were me, that’s the way that I would do it.
Hope this helps