I am seeking advice on a vacation property that my siblings and I are about to inherit. The waterfront summer home has been in the family for my entire life. The parcel is a double lot with multiple structures on the premises.
The property needs to be updated, however the location is valuable and the property is fully functional with a lot of potential. Ideally I would like enhance the house to make it livable during the winter since there is a ski mountain a few minutes away. With some love and care the property could be rented out and has the potential to be a cash machine. And of course enjoyed by my family and I!
However, a few of my siblings do not wish to keep the property. I am looking for advice regarding the best way to proceed in "buying out" my siblings. I have discussed this with some friends before. I would appreciate the BP community’s perspective on the best way to approach this.
How many siblings and what are there reasons for not wanting to keep? Are there any interested in working with you?
I see a few options
1. I assume the property is paid off. Get an appraisal. Borrow against the property and buy out their share.
2. Form an LLC with all siblings as partners and manage it for them. They get a percentage of proceeds as you would, but you get an additional percent to manage. Each sibling would get access to it on an agreed upon basis.
3. If another sibling is also interested, partner up with them and buy out the ones who have no interest. Divide the shares 40/50/10. you get 50 for management and the 10% goes for repairs and maintenance.
My two siblings and I set up an LLC for the oil leases my parents had. they were spread out and had different cash flows. We did not wish to split them as that would make it difficult down the road. Forming the LLC, we split the proceeds evenly with a 20-year term at which time the LCC would sell off the shares and split proceeds between the children or their heirs.
@Matt Steele Are there other assets that are inheritable? Do they amount to their proportional ownership in the property? Basically: Can Matt get the vacation home, Johnny get the stock portfolio, and Amy get the primary residence? Who knows how you’d structure that will/trust but you probably want to get an appraisal. You don’t need sibling strife during a mourning process. That’s about the worst time to argue asset value.
That said, I ain’t no attorney 🤷🏻♂️
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