Legal Question in Wills and Trusts in Minnesota
Estate Planning for Multiple Siblings for single family dwelling
Parents own single family residence with 1-daughter and spouse. Daughter has six siblings. Parents/Daughter own residence 50/50. In planning parents' estate, wish to find a mutually agreeable method of allowing 1-daughter to remain living in her half of the residence, while parents consider bequeathing their 50% of residence to other six siblings allowing them each 1/7 ownership. Daughter/spouse wish to remain in residence and do not wish to be forced to sell residence to pay six siblings for their 1/7 portion. Daughter cannot afford to purchase parents' 50% which will eventually be bequeathed upon both deaths. Is there a caretaker situation of some type that the daughter could be involved in, i.e., allow daughter life estate (possible caretaker position) on residence, making decisions as far as renting out parents' half and dispersing rental income to siblings? Daughter wants provisions to avoid partition action from siblings. Trying to assist parents with making correct decisions in estate planning. Have to also formulate provisions into agreement as far as eventual sale of entire property and dispersing assets from same. Thank you!
1 Answer from Attorneys
Re: Estate Planning for Multiple Siblings for single family dwelling
The life estate thing would work: life estate to daughter, remainder interest to siblings.
However, there are collateral and unexpected results which become possible in such circumstances which could make the cure worse than the original problem. For example, if one of the siblings gets divorced, the remainder interst of that sibling could go one half to the ex-spouse. Also, if one of the siblings files a bankruptcy, the bankruptcy trustee could become owner of the remainder interest of that sibling. With that many of them, the probability of either a divorce or a bankruptcy given the passage of enough time is almost 100%.
I might suggest giving up having the perfect outcome. There's too much trying to have the cake and eat it at the same time.
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