Advice Wanted - Sell the Lakefront House or Keep it in the Family?

[castlebreakfast]

Originally Posted by mswlogo

When COVID hit we saw properties selling like crazy down in MA, in the burbs. We fled MA to hideout at our place in NH. We asked a realtor how things were doing and they said extremely good (this was in March). We had always thought about "upgrading" or combining our home in MA and NH for one that would be easier in Winter and lower in total taxes. But we never moved on it. The COVID "bubble" was our excuse to move on it. The realtor also gave us an estimate of selling price which was $300K over what I ever expected to get.

We were so busy prepping the place for sale we didn't stop to think about what we were doing. The next thing you know it's sold. All I saw was $$$. And it was not until we started packing we thought, what did we just do? The closer and closer the day came that we had to move out we wear in tears every day !!

The taxes were extremely high and houses literally 3 houses over of the same value were paying half the taxes (different town). I always felt like we never owned it, but rented it, so it wouldn't be very hard to stop "renting it". It was $1300/mo. And we probably only used it in total 3 months a year. So that's like $5000/mo. But I'd pay that tax in heart beat now. We did own it and I see the owner enjoying all the work I put into it.

The good news is the new owners appreciate it for what it is and are already buddy buddy with the great neighbors we had. But if we could turn back the clock there is no doubt in our minds it would be with us until we are both in our graves.

Wow - and have you thought about maybe doing a vacation rental near the same spot so that you can enjoy the area still (though without owning anymore obviously)? That's what we have been talking about

[Sue Doe-Nym]

This has to be one of the hardest decisions a retired couple must make because of all the ramifications involved. We have heard horror stories of family members really going at it because of disagreements as to how the inherited property can be used, how to split usage, renting it out vs. using it, how to deal with expenses such as property taxes, repairs, etc, etc.....the list of conflicts can be endless....and make no mistake about it: when it comes to $$$, it can get really ugly. In a perfect world, we would leave our waterfront property to our daughter and son and family, with everything in good working order, including all the furniture, furnishings, water toys, even the stacks of games we have enjoyed on the porch year after year. That would be a perfect solution (for us). Would there be arguments and disagreements? Guaranteed. However, if we are no longer here, its not our problem, so hopefully they would work it out. It’s definitely a dilemma.

[mswlogo]

Originally Posted by castlebreakfast

Wow - and have you thought about maybe doing a vacation rental near the same spot so that you can enjoy the area still (though without owning anymore obviously)? That's what we have been talking about

We rented before we initially bought in 1986. My wife's parents rented her entire life (that is what introduced me to the lake life). Her dad always wanted to buy something but her mom refused, she was always worried about the burden of the extra work and cost of owning. They both loved the lake and were thrilled when we bought a place and visited often. They are both passed now.

After owning for 34 years I don't think we could go back to renting. It's not the same. We would go year round and cross country ski on the lake. We'd even go up for one day sometimes. We definitely would take all our vacation time in the summer though.

We did consider buying something just off the lake and getting/ renting a slip. But I know us, it would be too much "work" to go play. It needs to ready on short notice.

Honey, it's 7:30 let's go on the Hobie Kayak for the sunset. Even that took 20 minutes to get ready and sometimes we'd skip. My wife never liked being rushed. But I was happy with 20 minutes.

By the way you could rent the property out part of the time to help things financially. I personally never wanted to deal with renting. But I would/will if that meant the different of keeping it.

[FlyingScot]

You love the lake. Don't give it up for mere money

[Mr. V]

Whether the OP loves the lake is irrelevant.

It is not his property, it is his parents, and up to them to decide the issue.

His post leads me to suspect that in order for his parents to afford to relocate they must sell the lake property.

I for one would never want to live on the lake in my dotage, due to lousy health care in the area, sparse shopping choices and yes, boredom: I doubt dad snowmobiles or skis anymore.

It is unfair to one's parents to "guilt trip" them into hanging onto an old property when they'd rather move to a new location which would afford them a better quality of life.

[winterh]

The place I bought 7 years ago was in the sellers family for 60 years. Common story of home being passed down and a group of siblings with different financial situations and different interest in lake. Some lived nearby and used a lot, others moved away and did not use much if at all. I have become friendly with the ones who treasured it and they are regular renters. I give them a good rate and I enjoy having them back as I know how much they treasure it. Neighbors house was same situation going back 60 years and it just sold. Hopefully I will be long gone when it comes to that for my place so I won't have to see it go.

[castlebreakfast]

Originally Posted by winterh

The place I bought 7 years ago was in the sellers family for 60 years. Common story of home being passed down and a group of siblings with different financial situations and different interest in lake. Some lived nearby and used a lot, others moved away and did not use much if at all. I have become friendly with the ones who treasured it and they are regular renters. I give them a good rate and I enjoy having them back as I know how much they treasure it. Neighbors house was same situation going back 60 years and it just sold. Hopefully I will be long gone when it comes to that for my place so I won't have to see it go.

This is interesting as this is the scenario that would be great for us if my folks sell the house - we'd love to be able to rent the place moving forward - may I ask if you set up a deal in the contract when you bought the place off them that ensured they'd be able to stay each year as renters? And is it ever annoying for you when you want to go up to your house and can't because they are there (not sure if you rent it out to others as well)? And also if you don't mind me asking - how much of a discount do you give them? Thank you

[FlyingScot]

Originally Posted by castlebreakfast

This is interesting as this is the scenario that would be great for us if my folks sell the house - we'd love to be able to rent the place moving forward - may I ask if you set up a deal in the contract when you bought the place off them that ensured they'd be able to stay each year as renters? And is it ever annoying for you when you want to go up to your house and can't because they are there (not sure if you rent it out to others as well)? And also if you don't mind me asking - how much of a discount do you give them? Thank you

Now switching my view to 8gv's. You start with this and are injecting new complexity in the sale and your relationships. Some siblings will want to sell to whomever offers an acceptable price first. Many buyers have zero interest in renting. Keep in mind that the buyer is dropping a large chunk of change on an indulgence. Chances are excellent that he does not need/want renters.

[garysanfran]

I know there are taxes, maintenance, utilities, etc. in owning. But owning also gives you some upside potential in appreciation. Today, real estate in this area is probably the highest it's been...Maybe even prior to 2008 values. Look what's happened in the last three years.

The money to purchase is not GONE. It's just changed form.

I bought my family's home from my 4 siblings. We owned it for over 60 years and encountered all the sibling issues describe herein.

My permanent home is in San Francisco, 3,200 miles away making logistics for visiting complicated. I have used Bayside Rentals to rent it for part of the summer ...Pretty much pays for all of my expenses and I get to spend spring and fall there and close it for the winter. Never had one problem caused by the renters.

You can also factor in the paper loss of depreciation into whatever your income tax situation is. And almost everything you buy is tax deductible as an expense for operations.

Although you're limited to two weeks for personal use, there is no limit for maintenance stays.

[Sue Doe-Nym]

Originally Posted by garysanfran

I know there are taxes, maintenance, utilities, etc. in owning. But owning also gives you some upside potential in appreciation. Today, real estate in this area is probably the highest it's been...Maybe even prior to 2008 values. Look what's happened in the last three years.

The money to purchase is not GONE. It's just changed form.

I bought my family's home from my 4 siblings. We owned it for over 60 years and encountered all the sibling issues describe herein.

My permanent home is in San Francisco, 3,200 miles away making logistics for visiting complicated. I have used Bayside Rentals to rent it for part of the summer ...Pretty much pays for all of my expenses and I get to spend spring and fall there and close it for the winter. Never had one problem caused by the renters.

You can also factor in the paper loss of depreciation into whatever your income tax situation is. And almost everything you buy is tax deductible as an expense for operations.

Although you're limited to two weeks for personal use, there is no limit for maintenance stays.

Thanks for this post....it should be helpful to those pondering holding on to a property vs. selling. I would like to add a comment to castle breakfast, however....it’s probably a bad idea to clutter up a sales contract with language ensuring future rental rights. Most buyers are likely to reject such restrictions on their own usage.

[jbolty]

I heard a situation like this one one of the call in radio shows, dave ramsey maybe. anyway, the siblings could not all agree to anything so they formed some sort of trust to own the place and hired a management company to rent it and the siblings had to go thru the agency to book time and paid rent like everyone else. the rental income was split between all of them. seemed like a pretty good hands off approach.

2 cents

[LIforrelaxin]

This is an hard issue to deal with, mostly because it is more based in emotion in most cases. When my parents bought our camp, I knew the long term prognosis was that eventually, I will have to buy my siblings out to maintain the property.
So with that I had to also come to realization, that until such time as I can by my siblings out, I may have to pay more the costs for maintaining the place.

I have made peace with those realizations. Because I know that if we sell the property on Lake Winnipesaukee, I will never buy on the lake again. Not necessarily because I wouldn't be able to financially afford to.... But because the lake has changed so much, that I would want to move on to a new lake, that had the atmosphere Winnipesaukee used to have.

Don't get me wrong Winnipesaukee is a beautiful lake and always will be... But it has become over grown, with huge houses, and manicured lawns... This is simply not my idea of getting away from it all. My yard is sand, my camp is small, and I have trees that I don't take down unless I have too.... I can find plenty of lakes where I am not the only one that thinks like that.

So why am I rambling like this, well its a message, If you keep the camp understand why you are doing and what the costs might be... I know what my costs are to keep my families current camp, and am at piece with it... If my siblings and I ever decide to sell, I have rationalized through that situation as well.

Will I be disappointed if eventually we need to sell yes, but on the flipside, I also know what plan B is, and that is just as exciting finding a new lake to get to know....

[Bigstan]

Sell now. Who knows when the market in M-Boro will be like this ever again. What was 700k years ago is probably double in todays market. Look at what's selling there for > 1m, it's nuts.

$ aside - 3 siblings should NEVER share ownership of a high dollar value asset.
Even if protected in a trust (which it would have to be unless you're insane) you will end up in a bad situation. It ends that way far more often than that (just read the responses above).

Noone wants to give up the childhood home, but strange how much more it suddenly means when you know if might be sold.....

[Biggd]

Originally Posted by Bigstan

Sell now. Who knows when the market in M-Boro will be like this ever again. What was 700k years ago is probably double in todays market. Look at what's selling there for > 1m, it's nuts.

$ aside - 3 siblings should NEVER share ownership of a high dollar value asset.
Even if protected in a trust (which it would have to be unless you're insane) you will end up in a bad situation. It ends that way far more often than that (just read the responses above).

Noone wants to give up the childhood home, but strange how much more it suddenly means when you know if might be sold.....

I agree, as my wise old uncle use to say, "partners are for dancing". I owned one piece of property with a partner and it was a disaster even though he was a great guy I never did it again.
If there are multiple siblings involved it's better to sell and each do their own thing.
I've never been the sentimental type so for me real estate is an investment. I have no problem moving on from one to another. I even enjoy the hunt and enjoy making a new property my own.
I try not to invest more into a place than I would ever get back. That way if I find another place I like better I have no problem selling and moving on.
Of course my wife is much more sentimental and has a harder time with moving on so this keeps me a little more grounded.
As long as I still have my mind I still have my memories no matter what home I'm in.

[LIforrelaxin]

Originally Posted by castlebreakfast

This is interesting as this is the scenario that would be great for us if my folks sell the house - we'd love to be able to rent the place moving forward - may I ask if you set up a deal in the contract when you bought the place off them that ensured they'd be able to stay each year as renters? And is it ever annoying for you when you want to go up to your house and can't because they are there (not sure if you rent it out to others as well)? And also if you don't mind me asking - how much of a discount do you give them? Thank you

You would be very hard pressed to get a new owner to agree to a long term rental clause in the sale agreement. When my parents bought our property, we had a handshake agreement with them that, we would rent to them if we rented the property but nothing was documented. And we followed through with that promise after we spent time renovating the property. The finding was interesting. Although they where all excited to come back, when they did they found that it wasn't the same. It was no longer their family camp, it was ours. We made changes, and did renovations and it changed the place. They where all very grateful for the opportunity to come back, and wouldn't have changed the experience. They all decided, that the place was in good hands and moving on, to its next phase.... We haven't heard from any of them sense. Once in a while one of the Son's who already had a place on the lake, will ride by slowly in his boat.... but that is really all we ever see of the previous owners....

[songkrai]

Sell it.

If you like the Lakes Region. Purchase an ordinary house off lake or rent.

Time and time again. I see next generation not agreeing to time and usage. Then the next generation. And on and on.

There was a situation here where two adult daughters inherited a Summer cottage. One had one child. One had five children. Could not agree on maintenance,, taxes, usage, time, etc.

One did not wish to sell and just leave as is. And split the time.

One sister sued the other sister to sell the property. And then that sister bought the property. So much for family unity.

Sit down and agree who gets what.

Next generation ownership rarely works out.

Again, if you wish to stay in the Lakes Region. Just purchase a modest home off lake.

[winterh]

Originally Posted by castlebreakfast

This is interesting as this is the scenario that would be great for us if my folks sell the house - we'd love to be able to rent the place moving forward - may I ask if you set up a deal in the contract when you bought the place off them that ensured they'd be able to stay each year as renters? And is it ever annoying for you when you want to go up to your house and can't because they are there (not sure if you rent it out to others as well)? And also if you don't mind me asking - how much of a discount do you give them? Thank you

There was no agreement and I would probably not want one. The people I bought from were very nice and it just kind of happened naturally as we met and talked about the property and how it was in the family for years. I use the house plenty so do not mind giving up a week or so here and there. They don't come that often but in my situation I would not mind if they did. Everyones situation is different though. At first I gave them a big break on price but they now insist on paying at least close to market rates. When I do rent I am always happy to take less from someone I know will be a good tenant. At least in my case everyone is happy.

[Descant]

Must be different o the islands. Lots of 4, 5, 6 generations owners. Somehow, we all make it work. For many, it's the one place, after all the others have been sold, that we can all share (multiple) lifetimes of memories and make new ones.

[Juiced06GTO]

I am living this type of situation now on our family cottage on Upper Suncook Lake. My grandparents purchased and built the cabin back in 1964. They set up a trust and an investment account to help with taxes (which are now extremely high). The trust was set up with their three kids named as the stakeholders, then their kids (7 of us my siblings and cousins) next in line. To dissolve the trust everyone has to agree on what happens.

Unfortunately, all of what people have said about usage, up keep, family feuds is true, contributions towards the investment account, etc. My father passed away early at 53 from cancer which further complicated ownership in the place because now myself and my two siblings are the stakeholders along with my aunt and uncle and everyone wants their own time there. Trying to schedule time to be there is a pain as everyone who is still around and wants to use it wants prime weeks during the summer and the place is not really big enough to accommodate everyone at once. I have tried setting up calendars for us to all schedule a week in on our own over the summer and things like that, but it really hasn't worked.

Financially I couldn't care less about making anything off the place, my three boys really enjoying going there when we can which is what kills me about potentially walking away from it all. The securing time and dealing with everyone involved has made trying to go there stressful, which it shouldn't be.

At the end of the day I have really just tried to put all the BS aside and get up to enjoy the place with my kids when we can. When the money runs out in the fund to help with taxes and maintenance I am not really sure who in the family is left that can afford it (taxes alone are 13k/year) aside from maybe me and one of my cousins who lives local, but doesn't ever utilize the place. I'd imagine at that point it will end up being sold and everyone will get their share of the money and go on their way. At that point I hope to have my own place for use with my family and friends. The whole situation really stinks because my grandparents wanted the place to be enjoyed by many generations down the line and did their best to try and make that happen, but with so many people at so many different places in their lives it is difficult.

[thinkxingu]

Originally Posted by Juiced06GTO

I am living this type of situation now on our family cottage on Upper Suncook Lake. My grandparents purchased and built the cabin back in 1964. They set up a trust and an investment account to help with taxes (which are now extremely high). The trust was set up with their three kids named as the stakeholders, then their kids (7 of us my siblings and cousins) next in line. To dissolve the trust everyone has to agree on what happens.

Unfortunately, all of what people have said about usage, up keep, family feuds is true, contributions towards the investment account, etc. My father passed away early at 53 from cancer which further complicated ownership in the place because now myself and my two siblings are the stakeholders along with my aunt and uncle and everyone wants their own time there. Trying to schedule time to be there is a pain as everyone who is still around and wants to use it wants prime weeks during the summer and the place is not really big enough to accommodate everyone at once. I have tried setting up calendars for us to all schedule a week in on our own over the summer and things like that, but it really hasn't worked.

Financially I couldn't care less about making anything off the place, my three boys really enjoying going there when we can which is what kills me about potentially walking away from it all. The securing time and dealing with everyone involved has made trying to go there stressful, which it shouldn't be.

At the end of the day I have really just tried to put all the BS aside and get up to enjoy the place with my kids when we can. When the money runs out in the fund to help with taxes and maintenance I am not really sure who in the family is left that can afford it (taxes alone are 13k/year) aside from maybe me and one of my cousins who lives local, but doesn't ever utilize the place. I'd imagine at that point it will end up being sold and everyone will get their share of the money and go on their way. At that point I hope to have my own place for use with my family and friends. The whole situation really stinks because my grandparents wanted the place to be enjoyed by many generations down the line and did their best to try and make that happen, but with so many people at so many different places in their lives it is difficult.

I think you nailed the major potential issue in your response: the financial health of the family members.

My parents wanted their camp to go to someone in the family, but we sold it last summer when it became abundantly clear none of my siblings would ever be financially stable enough to take it over long term.

If there's any question on that end, there'd have to be a major trust account of funds to make me not run away.

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[Biggd]

The more people involved the harder it is to get everyone to agree on anything. That's why, in most cases it's best to sell and everyone to go their own way.
We try to get everyone together 4th of July week and with 3 kids and 6 grand children that's even a struggle.

[longislander]

Putting emotion aside, if the deed is in the parents name, inheritance may not be the main issue when selling the real estate.

Selling the property as a married couple will avoid some taxes. If single and have lived in a house for two of the previous five years, you owe no taxes if you make $250,000 or less in profit. For married couples filing jointly, if both of you have lived in the house for two of the previous five years, then the limit is $500,000 in profit; note profit, not sell price.


Gift tax (while living): If the parents sell the property, they, presently, can each give $15,000 annually ($30,000). Amount will probably, periodically, go up as it has been doing. The gift tax is not considered income, to the recipient. No tax to the parents for that amount.

I do not believe NH has an inheritance tax.

Estate tax may not be a factor. An estate tax is a tax on the right to transfer property when you die. The IRS exempts estates of less than $11.4 million from the tax in 2019 and $11.58 million in 2020, so few people actually end up paying it. Plus, that exemption is per person, so a married couple could double it.

A trust could be set up to avoid probate for the disposition of the asset.

If the house is "willed" to all three, especially with a trust, joint ownership of the house may be an option. Any future disposition of the house would be up to the three siblings, presuming they are still all living. Maybe the siblings can accommodate a downsizing, in conjunction with the trust.

These are just some issues that quickly come to mind, and the suggestions to seek professional advice are good suggestions.

[FlyingScot]

Originally Posted by longislander

Putting emotion aside, if the deed is in the parents name, inheritance may not be the main issue when selling the real estate.

Selling the property as a married couple will avoid some taxes. If single and have lived in a house for two of the previous five years, you owe no taxes if you make $250,000 or less in profit. For married couples filing jointly, if both of you have lived in the house for two of the previous five years, then the limit is $500,000 in profit; note profit, not sell price.


Gift tax (while living): If the parents sell the property, they, presently, can each give $15,000 annually ($30,000). Amount will probably, periodically, go up as it has been doing. The gift tax is not considered income, to the recipient. No tax to the parents for that amount.

I do not believe NH has an inheritance tax.

Estate tax may not be a factor. An estate tax is a tax on the right to transfer property when you die. The IRS exempts estates of less than $11.4 million from the tax in 2019 and $11.58 million in 2020, so few people actually end up paying it. Plus, that exemption is per person, so a married couple could double it.

A trust could be set up to avoid probate for the disposition of the asset.

If the house is "willed" to all three, especially with a trust, joint ownership of the house may be an option. Any future disposition of the house would be up to the three siblings, presuming they are still all living. Maybe the siblings can accommodate a downsizing, in conjunction with the trust.

These are just some issues that quickly come to mind, and the suggestions to seek professional advice are good suggestions.

Pretty sure that if you leave the place to your kids, then they will pay no tax on the gain that occurred during your lifetime--all the assets get marked up on your death, tax-free (except if there is an estate tax).

[JEEPONLY]

This is a more than useful thread.

Your original post, clearly/concisely/personally expressed, has struck an obvious chord for many of us.

I, too, am now experiencing similar circumstances. It is a mentally draining process and a familially destructive pill.

As each scenario presents its own problems there is, of course, no one size fits all solution. The thoughts/information being discussed here are immensely interesting and thought provoking.

Geez!

[thinkxingu]

Originally Posted by FlyingScot

Pretty sure that if you leave the place to your kids, then they will pay no tax on the gain that occurred during your lifetime--all the assets get marked up on your death, tax-free (except if there is an estate tax).

Our accountant told us this exact thing yesterday. We sold the parent homestead in March after my dad passed in February, so the "gain" will be calculated in that time, not from when they bought.

That being said, if someone were to have inherited property a couple years ago, there would still be a ton of gains?

Finally, the number we heard in terms of estate tax was $1M. Anything over begins to be taxed.

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[Mr. V]

It would probably be helpful to provide the name of an experienced attorney who has substantial experience setting up trusts to keep lakefront property in the family.

[mneck1814]

I guess our family is in the minority for making joint ownership work. Our camp was originally our family homestead, built in 1814, and has been passed down through 7 generations and used only seasonally since 1971. My mom and her siblings are the first generation to own the properties as a group and since they took over in 1997, things have run fairly smoothly.

I think there are several contributing reasons why things have worked. The first being they all genuinely care about the house and its place in our family history for the last 2 centuries.

Another being that before my grandmother gave her kids the house she invested a significant amount of money into it (new siding, windows, roof, foundation work, etc) to make sure that it did not become an immediate burden to her children. Additionally, when my grandmother passed a few years later, some money was put aside to help with expenses.

When the siblings took over, an extensive list of rules was put in place to define everything from how you schedule your time at the lake to what is turned off or left on when you leave. This has been very helpful to reduce potential conflict points.

I think the most difficult decision was how to fund operations. The siblings worked through many different scenarios, and ultimately decided that they would set a budget for the upcoming year and everyone would be assessed to same dues, regardless of their usage. They also decided that renting it out would not be an option to raise funds.

I think the rule that creates the most tension is that the "cousins generation" (spanning in age from 31-53) is not allowed to occupy the camp overnight without an owner present. 20 years ago this was rooted more in nobody wanting their children/nieces/nephews having huge parties at the lake, these days it has more to do with the owners being retired and each wanting as much time as they can have at the lake and don't want to be competing for scheduling with the next generation. For our branch, this isn't an issue as we enjoy being their with my parents for our vacation weeks and weekends - we are also close with our Aunts and Uncles and get invitations to join them regularly. My feeling is they pay the bills they should get first dibs for use.

One sibling (my mom) is the manager and collects all of the dues, pays the bills, schedules and coordinates maintenance, and keeps the master calendar.

I do think there will be some issues when it comes to deciding who it gets left to in the next generation. But, not everyone has an interest in the house/lake or the means to support it. Thankfully I have never heard anyone, in either generation, talk about camp as a financial asset, in fact, one sibling who didn't use the property signed off and gave his siblings his portion.

There have certainly been squabbles and bumps along the way, but, so far they have been able to work it out.

[Winilyme]

Originally Posted by mneck1814

I guess our family is in the minority for making joint ownership work. Our camp was originally our family homestead, built in 1814, and has been passed down through 7 generations and used only seasonally since 1971. My mom and her siblings are the first generation to own the properties as a group and since they took over in 1997, things have run fairly smoothly.

I think there are several contributing reasons why things have worked. The first being they all genuinely care about the house and its place in our family history for the last 2 centuries.

Another being that before my grandmother gave her kids the house she invested a significant amount of money into it (new siding, windows, roof, foundation work, etc) to make sure that it did not become an immediate burden to her children. Additionally, when my grandmother passed a few years later, some money was put aside to help with expenses.

When the siblings took over, an extensive list of rules was put in place to define everything from how you schedule your time at the lake to what is turned off or left on when you leave. This has been very helpful to reduce potential conflict points.

I think the most difficult decision was how to fund operations. The siblings worked through many different scenarios, and ultimately decided that they would set a budget for the upcoming year and everyone would be assessed to same dues, regardless of their usage. They also decided that renting it out would not be an option to raise funds.

I think the rule that creates the most tension is that the "cousins generation" (spanning in age from 31-53) is not allowed to occupy the camp overnight without an owner present. 20 years ago this was rooted more in nobody wanting their children/nieces/nephews having huge parties at the lake, these days it has more to do with the owners being retired and each wanting as much time as they can have at the lake and don't want to be competing for scheduling with the next generation. For our branch, this isn't an issue as we enjoy being their with my parents for our vacation weeks and weekends - we are also close with our Aunts and Uncles and get invitations to join them regularly. My feeling is they pay the bills they should get first dibs for use.

One sibling (my mom) is the manager and collects all of the dues, pays the bills, schedules and coordinates maintenance, and keeps the master calendar.

I do think there will be some issues when it comes to deciding who it gets left to in the next generation. But, not everyone has an interest in the house/lake or the means to support it. Thankfully I have never heard anyone, in either generation, talk about camp as a financial asset, in fact, one sibling who didn't use the property signed off and gave his siblings his portion.

There have certainly been squabbles and bumps along the way, but, so far they have been able to work it out.

You are clearly blessed with a wonderful family and the fact that this has extended through so many generations for over two hundred years is hard to comprehend. Great story.

[September]

I'm one of three siblings who inherited family camp after parents passed. It's been 11 years and we have shared it quite amicably. Two of us use it all summer and one might spend a weekend now and then, so we split the taxes, insurance and any MAJOR repairs (new roof, new septic) 3 ways. The day-to-day stuff are shared by the two of us who do use it. And while this isn't in anything written/legal, our parents asked us before they died to plan for an eventuality of one or two wanting to sell and one or two wanting to keep. They had us promise (verbally) that there would be two appraisals completed, and averaged to one price. The the buyer(s) would be able to buy out the seller(s) at half of that price. So it depends on your relationship with your brothers, I guess. We are very fortunate to have the property still in the family; none of us would ever be able to afford to buy. I'd keep it.

[Grant]

Our family had the same place for nearly 70 years in Tuftonboro, and we were forced to sell when one of the second-gen owners demanded to be bought out. At the time (2012), I had 3 kids in college, and my brother is a school teacher. So coughing up half the price of a place with 200 feet of shoreline, a boathouse, and 3+ acres was out of the question.

So it sold.

I could see this coming, and although it didn't lessen the pain, it helped me put it in perspective. My four kids, who, like me, grew up there and always considered it a constant, were devastated. Personally, I still grieve the loss. And I know it was a contributing factor in my dad's demise. He'd been there all his life. It was central to his being.

Fast-forward, and after a few years of renting here and there, camping, and learning how very different life on the Lake can be without owned waterfront, or a boat, we've found a wonderful spot that we rent for 2-3 weeks between July and September. The pros: we don't pay the taxes, don't need to do the maintenance, and don't lie awake in January wondering if that big old oak tree is going to smash the main beam of the house during an ice storm. The cons: no guaranteed home base. The loss of the family gathering spot. Sunsets on the dock. Scheduling the annual "opening up" long weekend in early May, and the closing in the fall. The tenuous nature of renting...not knowing if the new place you've grown to love will be sold, developed, etc. The heartache of knowing that my kids' kids will not know the same privilege (that I think we often took for granted).

One other "pro" -- and a big one, which was not foreseen: Proceeds from the sale enabled my mother to spend her final few years in the continuing care/assisted living facility that she *wanted* to be in. It was very nice and afforded a quality of life that just wouldn't have been possible without those funds.

So...personal experience says keep it all costs. The practical side says you never know what the future holds, and sometime those tough choices just can't be avoided.

But we're still here, and always will be!!

Good luck.

[Sue Doe-Nym]

Originally Posted by Grant

Our family had the same place for nearly 70 years in Tuftonboro, and we were forced to sell when one of the second-gen owners demanded to be bought out. At the time (2012), I had 3 kids in college, and my brother is a school teacher. So coughing up half the price of a place with 200 feet of shoreline, a boathouse, and 3+ acres was out of the question.

So it sold.

I could see this coming, and although it didn't lessen the pain, it helped me put it in perspective. My four kids, who, like me, grew up there and always considered it a constant, were devastated. Personally, I still grieve the loss. And I know it was a contributing factor in my dad's demise. He'd been there all his life. It was central to his being.


Fast-forward, and after a few years of renting here and there, camping, and learning how very different life on the Lake can be without owned waterfront, or a boat, we've found a wonderful spot that we rent for 2-3 weeks between July and September. The pros: we don't pay the taxes, don't need to do the maintenance, and don't lie awake in January wondering if that big old oak tree is going to smash the main beam of the house during an ice storm. The cons: no guaranteed home base. The loss of the family gathering spot. Sunsets on the dock. Scheduling the annual "opening up" long weekend in early May, and the closing in the fall. The tenuous nature of renting...not knowing if the new place you've grown to love will be sold, developed, etc. The heartache of knowing that my kids' kids will not know the same privilege (that I think we often took for granted).

One other "pro" -- and a big one, which was not foreseen: Proceeds from the sale enabled my mother to spend her final few years in the continuing care/assisted living facility that she *wanted* to be in. It was very nice and afforded a quality of life that just wouldn't have been possible without those funds.

So...personal experience says keep it all costs. The practical side says you never know what the future holds, and sometime those tough choices just can't be avoided.

But we're still here, and always will be!!

Good luck.

Grant, that is a very moving post. You have painted both sides of the canvas , and presented pros and cons of the issue in a compelling way. As the “seniors” in this dilemma, we are hoping our two heirs will be fair when decision time comes for keeping the place here on the lake or selling it. We would love to see the memories live on for generations, as so many here on the forum have described.

[Sammy]

Speaking from experience, don't ever sell.
You'll regret it for the rest of your life...

[Descant]

Originally Posted by Sue Doe-Nym

Grant, that is a very moving post. You have painted both sides of the canvas , and presented pros and cons of the issue in a compelling way. As the “seniors” in this dilemma, we are hoping our two heirs will be fair when decision time comes for keeping the place here on the lake or selling it. We would love to see the memories live on for generations, as so many here on the forum have described.

The failure in most of these posts is looking at only the next generation. The successful pass downs have dealt with giving it to grand children and a generation after that. The stories related to parents and the kids are stories of people who waited too long to make plans.

Oldsters who want to do something for their kids are reacting to old age. Oldsters who want to do something for grandchildren and those unborn, are planning.

As noted earlier, it took us 30-40 years to get the plan (financially) in place. It isn't just sitting down with a lawyer and signing the papers.

[FlyingScot]

Originally Posted by thinkxingu

Our accountant told us this exact thing yesterday. We sold the parent homestead in March after my dad passed in February, so the "gain" will be calculated in that time, not from when they bought.

That being said, if someone were to have inherited property a couple years ago, there would still be a ton of gains?

Finally, the number we heard in terms of estate tax was $1M. Anything over begins to be taxed.

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Joey may want to double check my answers here:

The house should be valued at time of death, so gains the past two years would be taxed. But I would guess there is a fair bit of judgement involved about when the gains occurred, so you can probably argue the lion's share occurred earlier.

Some states have inheritance taxes (I don't know which ones, but I don't think the list includes Mass), but a married couple can transfer $23MM or so to their kids, tax free from the Feds.

[MAXUM]

Originally Posted by FlyingScot

Joey may want to double check my answers here:

The house should be valued at time of death, so gains the past two years would be taxed. But I would guess there is a fair bit of judgement involved about when the gains occurred, so you can probably argue the lion's share occurred earlier.

Some states have inheritance taxes (I don't know which ones, but I don't think the list includes Mass), but a married couple can transfer $23MM or so to their kids, tax free from the Feds.

From mass.gov......

If you're responsible for the estate of someone who died, you may need to file an estate tax return. If the estate is worth less than $1,000,000, you don't need to file a return or pay an estate tax. Massachusetts estate tax returns are required if the gross estate, plus adjusted taxable gifts, computed using the Internal Revenue Code in effect on December 31, 2000, exceeds $1,000,000.

[tis]

Originally Posted by MAXUM

From mass.gov......

If you're responsible for the estate of someone who died, you may need to file an estate tax return. If the estate is worth less than $1,000,000, you don't need to file a return or pay an estate tax. Massachusetts estate tax returns are required if the gross estate, plus adjusted taxable gifts, computed using the Internal Revenue Code in effect on December 31, 2000, exceeds $1,000,000.

Sad that if you live in Mass. you have to pay an estate tax on property in NH. Because their is no estate tax (state) in NH if it is passed on to children. If it is passed on to others NH does have an estate tax.

[MAXUM]

Originally Posted by tis

Sad that if you live in Mass. you have to pay an estate tax on property in NH. Because their is no estate tax (state) in NH if it is passed on to children. If it is passed on to others NH does have an estate tax.

I don't believe NH has an inheritance tax however I do believe that in the case of ownership change even within the same family it may be subject to the NH real-estate transfer tax unless there is some way to skirt that. Can you add an additional owner on the fly at any time and not trigger this?

Mass doesn't distinguish if assets of the "estate" are within the borders on MA or not. My guess is if you are a resident it doesn't matter. They have no problem assessing income tax on income not earned in MA so why would and inheritance be looked at any different?

[tis]

Originally Posted by MAXUM

I don't believe NH has an inheritance tax however I do believe that in the case of ownership change even within the same family it may be subject to the NH real-estate transfer tax unless there is some way to skirt that. Can you add an additional owner on the fly at any time and not trigger this?

Mass doesn't distinguish if assets of the "estate" are within the borders on MA or not. My guess is if you are a resident it doesn't matter. They have no problem assessing income tax on income not earned in MA so why would and inheritance be looked at any different?

NH doesn't have an inheritance tax IF you leave it to your children. If you leave it to other relatives or friends, it is taxed. I don't believe there is a real estate transfer tax for children either.

[tummyman]

Please check the laws...my reading is that NH does not have an estate or inheritance tax now. But one can aways be introduced as it is up to the legislature. If you are a MA resident, they tax ALL your assets regardless of state, except they do give you a dollar credit for any estate taxes you pay to another state. So being a resident of MA would certainly bring any NH property into the estate tax calculation, including any other assets in NH or elsewhere. Makes little sense to be a MA resident.... MA is one of the few states with an estate tax now. Please note..this reply is not tax or legal advice. Seek qualified professionals to guide you.

[WinnisquamZ]

Originally Posted by Juiced06GTO

I am living this type of situation now on our family cottage on Upper Suncook Lake. My grandparents purchased and built the cabin back in 1964. They set up a trust and an investment account to help with taxes (which are now extremely high). The trust was set up with their three kids named as the stakeholders, then their kids (7 of us my siblings and cousins) next in line. To dissolve the trust everyone has to agree on what happens.

Unfortunately, all of what people have said about usage, up keep, family feuds is true, contributions towards the investment account, etc. My father passed away early at 53 from cancer which further complicated ownership in the place because now myself and my two siblings are the stakeholders along with my aunt and uncle and everyone wants their own time there. Trying to schedule time to be there is a pain as everyone who is still around and wants to use it wants prime weeks during the summer and the place is not really big enough to accommodate everyone at once. I have tried setting up calendars for us to all schedule a week in on our own over the summer and things like that, but it really hasn't worked.

Financially I couldn't care less about making anything off the place, my three boys really enjoying going there when we can which is what kills me about potentially walking away from it all. The securing time and dealing with everyone involved has made trying to go there stressful, which it shouldn't be.

At the end of the day I have really just tried to put all the BS aside and get up to enjoy the place with my kids when we can. When the money runs out in the fund to help with taxes and maintenance I am not really sure who in the family is left that can afford it (taxes alone are 13k/year) aside from maybe me and one of my cousins who lives local, but doesn't ever utilize the place. I'd imagine at that point it will end up being sold and everyone will get their share of the money and go on their way. At that point I hope to have my own place for use with my family and friends. The whole situation really stinks because my grandparents wanted the place to be enjoyed by many generations down the line and did their best to try and make that happen, but with so many people at so many different places in their lives it is difficult.

Terrific post. We are heading down the same road. Purchased in 66. We are the second generation and had to buy out the other half six years ago. Thinking ahead we would love to leave it too all three kids, but unsure how that will work. They can’t agree on what’s for dinner never mind maintenance required and tax payments. Understand the trust and investment need to pay the bills. But, as you note once the money is gone it will be sold. Difficult decisions all around. My idea is to give it to one child and allow all to enjoy. If the property is too much for one to handle then it should be sold and proceeds split.

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