Am I an old feminist?
A grandmother was widowed over 30 years ago and left with some savings, small pension and a fully paid for house. She decided to move to a senior apartment complex and convert her house into 3 apartments (the rent paid her apartment rent, expenses of the house, and a little extra). Two of her grandsons rented 2 of the apartments in her house and in the last 10 years the value of the house apartments has increased, but grandma did not raise the rent. Then grandma died and the house is now owned by a son (grandsons' uncle). The uncle has offered to sell the home to his nephews at an amount $200,000 under appraised value, but nephews still have problems qualifying for a mortgage. My neice has been living with one of the nephews on and off for about 4 years. My SIL left a large amount of money (about 1/4 of the house purchase price) in a trust fund for my niece with myself as the trustee. The nephews want to move into the large apartment and rent the two others to help pay the mortgage with my neice helping with the down payment and responsible for living expenses but NOT having her name on the deed.
I refuse to release the money unless her name is on the deed or on a LLC which puchases the home and counts ownership as total monies invested, including living expenses, house maintenance, and mortgage payments. LLC must include language for buy outs options when this trio splits up. BTW: My neice does not have to be on the mortgage to be on the deed, she just has to agree to put her share up for the mortgage.
I am, of course, just an old feminist for insisting my niece is legally protected. Or am I? I am advising her from a protective stance, but I do feel an extra burden because her mother wanted me to sign off on how she spent the money.
17 Answers
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Please go to a Trust and Estate attorney who will not only tell you that you are RIGHT, but that you have a FIDUCIARY RESPONSIBILITY to protect your niece. That is one of the highest responsibilities under our law.
Please see the attorney TODAY. Your Trust pays for this expert advice. Do not do this without legal counsel.
Seems like there’s a lot of potential “loaning” in what’s happening here.
What does she gain by "helping with the down payment and responsible for living expenses but NOT having her name on the deed"?
I'm asking this rhetorically since this question needs to be posed to her, to allow her critical thinking skills to form. I think your job is to put options and probable pros/cons in front of her and have her decide. I'd have her talk to a financial advisor, not a CPA. Don't protect her to the point where she won't learn anything.
Maybe she would be better off lending them the money for the downpayment (using a full and sturdy legal contract) at the same going market rate (since they're probably not going to get qualified for a mortgage) but at a better rate than she'd make in any other investment. If the nephews default, a lien could be put on the house?
I think the worst part of the plan is that there's multiple owners involved. I find this likely messy now and into the future.
You're being a responsible (and loving) Aunt and Trustee. Feminism has nothing to do with it, IMO.
If not, then tell her to remove herself entirely from this entire plan. Even if her name was to be on the deed, I sense that her cousins may not be the best co-owners with her.
If the nephews will rent the large apartment together and rent the other 2 apartments out, then where is your niece going to live?
Protect your niece. She has a history of making bad decisions, and if she ties herself into this scheme via you, she isn't likely to be able to get herself out of the resulting mess.
For instance, she's planning to take in her boyfriend (he's then a tenant and eviction problems may result when they break up). And take in boyfriend's brother (same problem). And maybe his girlfriend (same problem). If they don't pay for their food, don't pay her some rent, decide to be jobless and smoke weed all day - then what? If niece had shown any inkling of responsibility and planning in her past actions, maybe. She might know what she's doing. That's unlikely from my vantage point.
This is a situation setting up a downward spiral, loss of friendships, angry relatives, and niece's continuation of aimless meandering through life without any real goals. When it fails, you might feel guilt and have to make it up to niece (bad idea).
Just NO.
My youngest she saved, living home at the time, when she made $9 an hr.
You are right. Your a trustee for a reason. If you let her have the money, it will be squandered.
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