#647 in a series of true experiences in real estate
September 2012, Hills Newspapers
I don’t plan on dying anytime soon but I do think and fret about how I should leave what I own to my children. I’ve got a living trust, set up after my divorce was settled and my children were still young teenagers living at home.
It was hard figuring out what the trust would say. Not as hard as when they were babies and their dad and I had to decide who we would name to raise them if both of us should die. Because no one knows what the future holds, there was plenty to think about. And so, when I went to the trust attorney, I said that I didn’t know how to do it.
Would my children be married, well, living in this country, prospering in life at the time I die? Should I leave what I have regardless of their age or circumstances? The attorney was very helpful. She pointed out that no matter how I worried and imagined, I was not going to know the answers. She suggested that I concentrate on a 5-year-forward period only. What would be best for my kids if I died in the next 5 years?
That did make it easier. The kids would still be young and probably still dependent. They would likely be at home, or away at school perhaps, but coming home at least sometimes, and so the trust says that Anet would make sure the kids could live at home and otherwise be provided for until they turned 22. My assets would be distributed to them when they were a little older: ages 25 and 30.
The idea was that I would change the trust as time went along but here I am now, a little late, wondering again what the provisions should be, and my children are 27 and 28. Neither is married or has kids. They’re healthy and they live nearby, my daughter Annie with her boyfriend, my son Nick with a roommate friend. Annie works and largely supports herself. Nick is in school and has large student loans.
I don’t have a great deal to pass along but I do own my house, beloved by us all. Both kids have said many times that when I die they’d move right back in. They’d like to live again in the house where they grew up. They might still feel that way in the future, or maybe not.
But Anet lives here and what about her? And there are two kids and they can’t both have the house. Would they, anyway, be able to afford it? I have a good size loan on my house. Whoever lives there would have loan payments, property taxes, insurance and other house expenses to pay.
Which brings to mind the property tax issue. If my children (or grandchildren) inherit the house directly from me, they will retain my advantageously low property taxes.But if, as happened with my mother’s house after she died, one sibling buys out the other’s interest, only part of the lower taxes stay in place.
So, it might be a better idea for me to leave the house entirely to one child. How could I make that fair?
I realize now that I am thinking the way my own mother did: I want to leave as much to my children as possible and I want them to receive equal shares. I’m surprised by this. I remember telling my mom that she did not owe me or my brother an inheritance. I said that I hoped she would spend what she had on herself. Maybe it’s just a mother thing.
I’ve witnessed bad, ugly, never-speak-to-one-another-again feelings between brothers and sisters over inheritances. Such a shame. I hate to think of my children upset over what they get when I’m gone, disappointed in their share and angry with each other.
Sometimes, by the time the last parent dies and the family home is left to the children, the children are grown and gone, established elsewhere, often with families of their own. They no longer want to keep the family home. Or there is only one child so there is no need to share and, of course, no disagreement.
But all too often, at least one of the children wants his share while the sibling or siblings can’t bear to part with the house. The stalemate can go on for years with everyone becoming more and more emotional and determined that his way be had.
My own kids have always gotten along fine but, at least at this point in their lives, if they could, they would both lay claim to my house. I’m still here and hope to be for some years. Changes will certainly happen between now and then, for them and for me. The problem is what the trust should provide for now. I’ll probably go with the 5-years-in-the-future idea again.
