I inherited my father’s house with my siblings, but the alimony and taxes are too high. How can I get rid of this property without upsetting my family?

My father gifted his house to his four children too late to qualify for Medicaid (it was within the 3 year window) and pay for his nursing home. Three of my siblings took a HELOC to pay his bills and run the house. I didn’t have the same wish.

I paid off my fourth of it, about $6,000. At the request of my eldest brother and executor, I also signed a $10,000 life insurance payout after my father’s death that only siblings received. I assume the policy was taken out before my two younger siblings were born.

I have little to no interest in using the house: I’m not in love with the area. The house needs repairs and maintenance as none of us live in it all the time. The eldest brother is now sending the “budget” for next year’s upkeep, about $2,000 a piece.

“I don’t see a good way out without permanently losing the goodwill of the family.”

A sibling cannot pay anything because he is broke. I retired this year and have not budgeted to maintain this property. I’ve only used it once in two years, but I’m clearly expected to continue paying the upkeep of my late father’s house.

I pay my share of the property taxes and the rest of the HELOC that the third sibling is too broke to pay, but I wish there was a way to overcome those expectations without just giving up my share for nothing. I don’t think I can sell my quarters as it is jointly owned.

I don’t see a good way out without permanently losing the goodwill of the family. Do I have good legal options – other than just giving away my share?

daughter & siblings

dear daughter,

This is not an uncommon dilemma: failing to look back on Medicaid (more on that later) and fighting between siblings of different means trying to jointly manage a family home or vacation home given to them by their parents.

You could either sign over your share, ask your financially stable siblings to buy you out, or sell the property, but you’ll need their permission for the latter. They would have to initiate a foreclosure sale of the property – a partition action where the property is sold under court supervision.

In such a lawsuit, all of your siblings would have an opportunity to show if/how they contribute to property upkeep, HELOC fees, and property taxes. You may take this action and your siblings may agree to the sale when you see the writing on the wall.

Of course, the best time to make a decision about this was when your father made the decision to give you the house as a gift. You don’t state the value of the house, but if you felt it would result in prohibitive expense or discord among your siblings, you could have declined.

A partition drive would obviously do just that – create resentment among your brothers and sisters, perhaps especially among those siblings who cannot afford to contribute financially. Do you sit in a room with your siblings (or Zoom ZM,
-1.18%
you may be able to see everyone at eye level.

“In some states, the owner who wants to exit can sell their interest to a third party, usually a speculator, who then files a partition suit to force the property to be sold below market value,” says Neil V. Carbone, Trusts and Estates partners at Farrell Fritz PC.

“At least 20 states, including New York, have passed the Uniform Partition of Heirs Property Act to protect against these third-party sales,” he adds. “Under this law, the court must determine the value of the property and give the co-owners an opportunity to buy out those who are applying for foreclosure.”

The problem with inheritance, as with life, is that people often only see a situation from their point of view. If you explain how and why you are having a hard time keeping this property, you may be able to reach a peaceful solution, even if it means giving up your share.

It’s a cautionary tale. Nearly 40% of older Americans have a “moderate need” for long-term care, while almost a quarter will have a “minimal need” for such services, according to the Center for Retirement Research, its researchers Processed data from two decades.

Medicaid Rules

For others reading this: Recovery rules vary by state, and Medicaid is generally the last resort for long-term care. As your family has discovered, a Medicaid recipient must spend their assets and resources and maintain their home only within certain value limits.

Look-back rules also vary by state. There is a penalty period if, for example, a house was sold too soon after the prospective Medicaid recipient entered long-term care because the proceeds from your father’s house could have been used to care for him.

“The date of the Medicaid application is the date from which the lookback period begins,” said the American Age Council says. “In 49 states and DC, the lookback period is 60 months. In California, the lookback period is 30 months.”

“For example, if a Florida resident applies for Medicaid on January 1, 2022, their lookback period extends back 60 months to December 31, 2016,” the nonprofit adds. “All financial transactions during this period will be subject to review.”

The review does not only apply to real estate. It also includes “money given to a granddaughter for her high school graduation, a house given to a nephew, collectible coins sold for half their value, or a vehicle donated to a local charity,” says the ACA.

“Even payments to a personal care assistant without a formal care agreement, or assets gifted, transferred, or sold at fair market value by a non-applicant spouse, can violate the lookback period and result in a period of ineligibility for Medicaid. ” It adds.

Carbone sees many cases like yours. “Parents may be overly idealistic in expecting their children to cooperate in dealing with inherited real estate,” he says. “Unfortunately, inherited properties often become a source of family disputes.”

“When it comes to a vacation home, all the joy and good memories associated with the family retreat can quickly be replaced by anger and frustration that tears the family apart,” he adds.

Your family has migrated into territory occupied by many families before you: Medicaid rules and family ownership. It may feel stressful to deal with right now, but rest assured you are not the first person to struggle with this situation and you won’t be the last.

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https://www.marketwatch.com/story/i-inherited-my-fathers-home-along-with-my-three-siblings-but-the-maintenance-and-taxes-are-too-high-what-should-i-do-11664471717?rss=1&siteid=rss I inherited my father’s house with my siblings, but the alimony and taxes are too high. How can I get rid of this property without upsetting my family?

Brian Lowry

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