Estate Planning - Real Property Disbursement Problems

Ronald Hudkins
 


Visitors: 513

Many parents want to give an equal share of the family home or some other sentimental form of real property (actual land usually) to their surviving children in equal shares. As an estate-planning attorney, one often sees the strange problems created by such plans. In particular if there are an even number of children, this may create hardships as voting blocks of family members eventually have to resolve votes that are evenly split in court or at least face the hardship of that choice among their siblings.

Suppose, for example, that well-meaning parents leave the family home to four children who are well intentioned adult human beings who generally wish to treat each other fairly, as family members often endeavor to. The problem is that four children will usually have some important differences in age, lifestyle and financial needs. When four such people own property, they must all pay a fourth of the tax and of the general maintenance and upkeep of the property. Suppose one of the children is unsentimental about the family home and wants to sell the property to finance a business or vacation, and two of the other children want to keep the family home to gather for Christmas (or any other important holiday). The fourth child has a hard time deciding, but is also having financial difficulty paying their share of the taxes, maintenance and upkeep. In order to keep the home and avoid going to court, the two children who wish to keep the home will have to pay the other children what their shares of the property are worth. This can create definite hard feelings even if the children who wish to keep the property have the ability to pay the others for their interest in it. When family Christmas (or any other important holiday) comes around, the children who sold their share of the property will feel badly about using it for the celebration of Christmas around their siblings who had to pay to keep it. By the same token, the children who had to pay to keep it may feel awkwardly about having to share it with their siblings whom they had to pay. This kind of thing can create long standing rifts in a family, difficulty between relatives who formerly got along well together.

The problem, from an estate-planning point of view, is that the property was given in equal shares to prevent any of the children from having their feelings hurt or feeling less loved and important than the other children. If, an estate planner does not help their clients see this possibility, for it is a very likely situation in the real world, it is felt that they (the attorney) have failed. Unless the family is extraordinarily wealthy the possibility that they will have differing financial needs is very common. Anyone who is a middle class American is usually at some point in need of money, particularly if they have children.

It is important for both the client and the attorney to face tough questions and to look toward non-idealized versions of the future when crafting estate planning strategies. The problem of the four children is easy enough to fix, but it illustrates a more important principle. When you are ready to start your estate planning it is important that you answer hard questions for yourself. Clients should be asked questions about how they have seen other families handle wills after their loved ones have passed on. Usually the client is able to tell stories about the greedy children or relations of others, and that helps broach subjects that might otherwise be difficult to bring up. When you prepare to visit your estate planner remember the worst family you ever heard of and imagine that part of the problem that they were having is because bad estate planning forced them to do things they might not otherwise have done. If there is any skill estate planners try to hone, it is the ability to talk to their clients about why they are asking for certain bequests and to help them see that there are several options to reach the goal they are seeking, rather than offering them a cookie cutter version of a will or trust.

About Ronald E. Hudkins;
Ronald Hudkins is a retired U. S. Army Military Police member that was assigned as a staff researcher. He has coordinated with military and criminal investigators, set on court marshals and worked closely with the Staff Judge Advocate Generals’ Office (JAG). He has a keen sense of legal matters - their interpretation, initiatives and guidelines. For imperative financial planning needs he suggests his book “Asset Protection and Estate Planning for All Ages. ” Additionally, he offers a Free Newsletter at his web site: http://www.AssetProtectNow.com

(812)

Article Source:


 
Rate this Article: 
 
Commercial Real Estate Property
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

Problems With Your Real Estate Business? Use These Real Estate Marketing ..

by: Teran Dale (July 12, 2008) 
(Business/Marketing)

Selling Your Real Estate Property; Things To Consider When Getting A Real ..

by: Kum Martin (October 03, 2006) 
(Real Estate)

Selling Your Real Estate Property; Engaging A Real Estate Agent

by: Kum Martin (October 02, 2006) 
(Real Estate)

Real Estate Investment Property – Three Ways to Find Property at Bargain ..

by: Joel Teo (September 28, 2006) 
(Real Estate)

Real Estate, Real Property and Leased Land; Definitions, Discussion and ..

by: Mr Jody Hudson (October 22, 2004) 
(Real Estate)

Real Estate Home Prices, Recession & Economic Forecast Predictions From a Real ..

by: Paul F Davis (March 25, 2008) 
(Real Estate)

Planning for Real Estate with Estate Planning

by: Nicole Soltau (July 12, 2005) 
(Finance/Estate Plan Trusts)

Planning For Real Estate Investments

by: Joshua Keleske (August 19, 2008) 
(Investing)

Real Estate Tax For Property

by: Martin Lukac (March 25, 2007) 
(Finance)

Commercial Real Estate Property

by: Ron Redlich (July 06, 2008) 
(Real Estate/Commercial Property)