A Chance To Share Your Stories

In my area of legal expertise, I often find that I not only act as legal advisor but also as a family counselor and sometimes referee.

It’s a harsh reality that shared ownership of an inherited vacation property generally comes on the heels of the loss of a parent or another family member.  It is already a time fraught with emotion.

Add to this situation the legal frustrations that come with probating a will, dealing with the executor or executors, figuring out who owes what in property taxes and who handles the arrangements for payment if the property is financed.

Then there are details to be handled like shared use, shared maintenance and decisions about property management.

Throw all of these factors in together and you have the ingredients for a potentially divisive and unpleasant family dynamic.

Of course, having a sound cottage succession plan in place can significantly reduce the opportunities for disagreement, but I’m very interested in the experiences my readers have had and how they handled the difficulties inherent in sharing a family vacation home.

Are you in a situation where you own vacation property jointly with siblings or other family members?  Was there a workable plan in place when you inherited your share of the family cottage?  If not, did it cause family discord?  Do you have any stories or suggestions for our readers on how you handled family relations in a positive way?  Were you able to find resolution?

Please share your stories in the comments below. I’d appreciate hearing how you maintained family harmony while dealing with a potentially divisive situation.

Comments

  1. Phyllis Heimall says:

    Our parents built a large lakeside home in 1978, intending it to be a “gathering place”‘ for us and our families when they were gone. They specified that whichever of us assumed ownership of the home , to be determined by a bidding process, would then compensate the other three siblings with “equalization” payments, so each sibling would benefit equally from their estate. My brother persuaded my mother that he, as the eldest and the only male, should be granted ownership outright, because he would then make these “equalization” payments to his three sisters. Problems arose when our mother passed away in 2011, leaving the home to him, but he stated that he had no money to pay us. We then dissolved the previous agreement, and we four became Tenants in Common. We met and agreed on a system of proportioned payments of taxes, insurance and maintenance costs, taking into account that our brother has lived in the house full-time since 2001. He has not kept up with payments for six months, and we have been obligated to pay his share. He refuses to discuss any financial arrangements and ignores phone calls and letters. Is there any way we can force him to pay his fair share, or to leave the premises so we could prepare it as a part-time rental in order to pay the expenses?

  2. Since the four owners have title to the property as tenants in common, I”m afraid the law is on your brother’s side in this case. As a tenant in common, he has no obligation to pay rent, no obligation to pay his share of the cottage expenses, and no obligation to share use and enjoyment of the property with the other owners. However, you and your sisters are not without recourse. Each tenant in common may exercise a right of “partition” in which the property would be either divided in 4 parts of substantially equal value, or if such a division cannot be done for any reason, then the property would be sold on the open market and the proceeds divided among the owners. It is possible that you three could even recover the portion of the expenses that your brothe refused to pay before the remaining sale proceeds are divided among the owners.

    Unfortunately, the only way to exercise your right of partition is to institute a lawsuit involving all of the owners of the property. This is a step that should not be taken lightly, but is the only legal remedy for the situation where one owner refuses to act cooperatively in dealing with the property. Your brother cannot prevent the sale of the property under a partition proceeding, and anyone can bid on it, including the other 3 owners. You should contact an experienced attorney who has dealt with partition cases in your area if you wish to pursue this.

  3. Tracy Spratt says:

    Great book, it helped to get our slow moving family to create an LLC and tear down the old shack and begin building a true lake house, with heat and everything!

    I have been appointed treasurer. Can anyone recommend a financial management software program that would be effective for a branch-based family cottage LLC? i particularly need to track exactly how much each member contributes. And pay bills and so forth.

    I could, of course, program Excel to help me but a commercial package would be preferable.

    • Thank you for your comment. Many families have found that Quick Books software is adequate for their needs. Otherwise, creating an Excel spreadsheet may be your best option.

  4. Diane Hercher says:

    My sister and I inherited the family cabin in 2008 . My parents had it since 1963 . I read all your updates but is the anything for those of us who have inherited family cabins before the 2015 law that deals other the uncapping of the property taxes. I was told the taxes would go up but wasn’t papared for how much. It’s a lake front property. We struggle to keep them up but just can’t give it up, too many memories. How do we help those of us that are in the same issuation?

    • Unfortunately, I know of no way to help in this situation. In 2008 when you inherited the property, the property tax law provided that the property value uncapped (typically causing the property taxes to increase, sometimes dramatically) when there was a transfer of ownership of the property. The law has changed several times over the last few years, and now provides that there is no uncapping of property value when the property is inherited by children (among a few other close relatives) of the owners. However, there is no provision making this retroactive to previous inheritances, and I think it extremely unlikely that this will ever change. Thus, all people who inherited Michigan property before December 31, 2014 will face your situation where taxes (in most cases) have gone up.

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