Dear Quentin
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According to my parents’ will, my brother and I were to split the inheritance equally. This includes the family home. I bought my current house nearby in preparation for my parents’ aging, so I would like to leave this house to my children as well.
I understand that the best time to sell a home is soon after inheritance to avoid capital gains taxes. The problem is that my brother is single and currently lives in the house, and he may not want to sell his share right away. I would be happy if he could live in the house we share.
Either he decides to sell his half and I have to take a financial hit, or he gets married and moves into a house with his family, which complicates things. I’m worried that this may be the case. How can I ensure that my interests at home are protected while making sure my siblings are doing the right thing?
Thank you very much.
complex problem
Dear Complex,
Your last question is a good question and also rhetorical.your interests are already protected: As you correctly suggest, you are entitled to 50% of this house, not 100%. If a childless sibling inherits the property on her own, that sibling does not automatically have full ownership and is not obligated to sell his share to you. It doesn’t happen. Inheriting real estate can cause discord between siblings. Not everyone understands this like you do.
What to ask your brother so you can do the right thing by his side. he I want it too. This seems to be the only home he knows, and considering you live elsewhere with your family, he has an equal or 50.1% right to buy you out. Some might argue. If he wants to continue living there, you will be generous and considerate in allowing him to do so. Many siblings will insist on paying cash and filing a resignation letter to get the sibling out of the family home.
There is no doubt that the house will be passed on to you through “”. Basic step up ” is valued at its current value rather than the purchase price, which reduces capital gains tax when sold. Even if the house was originally purchased for $500,000, if the house is sold for his $1 million, you and your brother will have no capital gain on the $500,000 if they decide to sell. have to pay taxes. Long-term capital gains are paid based on the increase in value after inheritance.
rite of passage scenario
However, there is no definitive right or wrong way to go about a family dilemma, other than the two of you working through the process with transparency and respect. If he lives in the house all his life, gets married and has children, it seems reasonable to maintain the status quo. So he continues to live there, but on one condition. That means he will buy you. You can ask him to do it anyway, but if he can’t afford it, he’s relying on your generosity.
Broadly speaking, this is a normal sibling rite of passage scenario. I have received letters from people such as: Brothers “borrow” hundreds of thousands of dollars From parents who will never pay them back. Brothers who hid their father’s will ; and their possible parents I was forced to put my son’s name on my parents’ home. , the other family members were very surprised and confused. The list goes on.
What now? Scenario No. 1: He lives there as a single man, but you don’t ask him to buy you out. All things considered, you’re pretty decent. However, you have the right to change his mind and buy him out or ask him to downsize. Scenario No. 2: He has started his family and lives there, and you ask him to buy you out. If he doesn’t have the money, you can either sell him or buy him out. That’s fair. Scenario No. 3: You both have families and money to buy each other out. Toss a coin.
Often, putting aside our egos, fears, and desires is the better choice.trying to argue the reason we Thinking you deserve something more than the person next to you is a bad example of the old “do-re-mi-me-me-me-me” thing, but can lead to further resentment and one-manship. It doesn’t seem like it’s going to end well. If you flip a coin for financial or family reasons, agree that whether you like it or not, the final result is the correct one: heads are a win. Tails is your win.
This house should not be more important than your relationship.
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