Strange situation in the future

[Jnbmom]

My hubby's mother is getting up there 82. She is in okay health but starting to slip a bit .She informed us (me and hubby) yesterday of her wishes in a friendly conversation. She owns her home and it sits on 15 acres if I had to guess probably worth 400-500K . She said she is putting the house in my hubby and his 2 sisters names and will have everything in place .

Now this skinny his one sister was given an acre and she put house on it , however it didn't perk and the sewage/water is on mom's property. His other sister moved in with her a few years ago to "help her out" but doesn't do **bleep** for her, just helping herself.

His mom asked us would we want to keep the property or sell it, my hubby said he would not want to sell and loves the property, trouble is we really don't get along with either sister. The house is big and has a complete finished basement with kitchen and bathroom just no shower. I guess it could be remodeled to add shower and it's open but could be changed to some separate rooms. We would consider moving in the downstairs and remodeling but would insist it be sealed off and stairs taken out. I could never ever live with his sister EVER.

Not sure if that even an option and have no idea what his sisters think . We really don't like to think about his mom being gone but it will happen and she seems adamant about telling us what she has put in place. I suggested my dh dit down with his mom and sisters and see what everyone thinks and go from there .

I told my dh that if we all couldn't live that close or in that situation not sure what we could do ?

Just looking for advice or suggestions?

Thanks

[Curious_George2]

The stakes are pretty high, so you would be wise to talk to a local lawyer who specializes in real estate to understand your options. That doesn't necessarily mean anyone will sue anyone, but there are state laws that govern this situation (which is more common than you might think) and you really ought to have an expert explain them to you.

I know it's hard, but try to forget everything from the past regarding the sisters. These things can get very ugly (and very expensive) when people are driven by a desire to punish past transgressions. It's much better to let that stuff go and focus on finding a mutually beneficial path forward. 

[wasCB14]

Does your MIL have any other assets? Maybe your husband could receive other property worth $200k instead?

There's a similar situation in my family. Despite owning half of a property (the whole property now worth nearly $2M) we've not gotten one cent of rent on it for over 50 years. The relative-inhabitants could certainly afford to pay rent, but it's long been a case of being pushed around but not wanting to make things worse by pushing back.

Don't expect things to necessarily improve over time. Moochers continue to mooch. The last shared-blood relative-inhabitant is likely to die in the next 10 years at which point we will move to sell the property, suing if necessary.

*I should add that in the relative-inhabitants pay the property taxes and other upkeep, though neither is at all significant compared to the lost rent and opportunity cost.

[tacpoly]

Can you buy out your SILs?  You can start saving for a down payment now to buy the property from the estate.

You may have to learn to tolerate your SIL who built her house, but you can come to an agreement re sewage/water. I don't know how this works - can you ask her to establish her own or pay you for the service?

And talking about her wishes is great, but your MIL needs to put it in writing in a will. This is the case for families that get along and is mandatory for those with conflict.  

[coldfusion]

You absolutely need to consult with an attorney specializing in elder affairs for several reasons if the intent is to keep the property within the family.

Given the value of the property there are almost certainly going to be tax implications if it is outright gifted.

Because so many elders were gifting away assets as a way to protect inheritances and later becoming indigent many states now have reachback provisions where recipients of assets can be made liable to reimburse the state up to the value of the gifted assets if the donor later enters long-term care without having sufficient assets remaining to pay for it.   You would need an attorney to advise if this applies in your MIL's state of residence and what contingencies, like the use of a blind trust, may be available.   Massachusetts for example has such regulations and the reachback period is 5 years.

Another option could be to purchase the property from MIL at a fair market value and she structures/restructures her will accordingly.

Having one's septic system on someone else's property can become an issue later for a variety of reasons if there are no legal documents or deeded rights in play outlining rights and responsibilities. You'll want to confirm what if anything is documented.

The last piece off the top of my head to take under consideration is to have a legal agreement in place outlining the exit strategy if someone later wants out or passes away. 

I can't emphasize enough that you really want to engage an attorney here.

[Jnbmom]

Thanks all . She has a will and it is very specific that the property which she owns outright is to be put in all 3 of their names . We could never buy out either of them we just simply don't have that kinda of money and never will 😞

Yes I agree we need to at least run this by an attorney as I am sure they both have one on speed dial.

I told him he really needs to sit down with mom and his sisters to see what they are thinking as well. I know she has some savings and life insurance but I don't think it would be enough to buy them out.

Again appreciate the insight and advice .

[tacpoly]

The current federal estate tax exemption is $11.5 million and this is slated to adjust for inflation for another 5 years. A few states have an additional estate tax and even fewer have an inheritance tax, most with lower exemptions.  Unless your MIL has far more valuable assets than her property, you probably won't have to worry about taxes -- unless you and/or the property are located in one of those few states. 

Maybe your DH can give up any cash inheritance to your SILs for their share of the real estate. It's risky, but if your DH loves the house that much, it may be worth it.