“Dividing a home among siblings takes planning and cooperation,” cautions Caroline E. Mayer, writing in the AARP Bulletin. Mayer recounts the 17-year family rift created among Olivia Boyce-Abel and her three siblings when their mother died, leaving an old family vacation home as part of their inheritance. The legal dispute among the siblings prompted three lawsuits and divided family members for almost two decades. “Despite parents’ best intentions to assure future generations of family togetherness, an inherited home often triggers lifetime grudges, and, at worst, lawsuits, Mayer concludes.
A growing number of boomers will likely go through an experience similar to the Boyce-Abel’s, she predicts, because:
- boomers are expected to inherit $8.4 trillion in assets
- a large portion of that is likely to be real estate given the high rate of home ownership among older Americans
By way of contrast, Caroline Mayer offers an example of four adult heirs to a vacation home who avoided all the contentiousness of the Boyce-Abel saga. Robert Smith and his siblings wanted to make sure the house stayed in the family, but also wanted to avoid disputes. They drew up a notarized agreement setting out conditions:
- Only their parents’ blood relatives could ever be owners
- Decision making was limited to a 4-member management committee
- Each family gets two weeks during July and August; in May, June, and September the house is open to anyone; the rest of the year, it’s closed.
Vacation property is hardly the asset posing the greatest number of potential disagreements among heirs CPA Jordon Rosen told Mayer. Frequently, he says, an adult child may be living at home, taking care of the aging parent or having nowhere else to go. The ensuing problems:
- Parents want to leave the home to that child – who lacks the resources to maintain it
- Siblings don’t want to maintain the home if they aren’t benefitting from it
- Parent believes the child will do what’s fair and share the proceeds, but that often doesn’t happen
At Geyer & Associates, our estate planning attorneys stress the importance of having those family discussions, difficult as they may be, while the parents are still alive. As Boyce-Abel ruefully remarked, “If my mother had been able to sit down and have a conversation with all of us, that would have made a huge difference.”