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Sunday, December 13, 2020

Unless you really hate your children, don't leave your home to all of them together

As I often do on weekends, I just scrolled through a thread on this blog that had a number of unanswered questions from readers, and I answered five. What the five questions have in common is that each of them came from a person whose parents left him or her a house or cabin, together with his or her siblings.

I can't even tell you how frustrating it is to know that family after family is being damaged - sometimes beyond repair - because parents keep leaving the house to ALL of their children. Stop doing that, parents. Just stop it. All you are doing is setting your children up for disagreements and arguments. How on earth do you suppose that two or three or more adults with their own families are going to share one house? 

It does not work. Can I be any more clear? It does not work to leave one house to multiple children. Unless you really hate your children, don't do this to them.

When I discuss this with parents who want to leave the house to the kids, I explain that in 99.9% of cases the result is a fight among the children, the parents shrug and say that if that's the case, the kids can sell it. Can they? Can they all really agree that it should be sold, when it should be sold, at what price it should be sold? To whom it should be sold? In one question I answered today, one of five siblings refuses to sell unless it is to her son, at 1/3 of market value. In another question, one brother refuses to participate in ownership (i.e. bills) but won't agree to sell. These are just two examples of how people behave in this situation.

So come on, stop putting people in this position. A better idea is to leave your children a share of your estate (i.e. NOT a share of the house, even if the only thing in the estate is a house) so that the executor can sell the house and divide the funds. If one of the kids wants to be the buyer, the executor could sell to that child. Otherwise, your kids could be duking it out for years until the day the whole value of the house has been sunk into legal fees. 

An even better idea is to discuss your plans with an experienced estate planner who isn't afraid to tell you that your idea is poor, and suggest alternatives to achieve your goals.

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