#The Moneyist: ‘She continues to fail upwards’: My parents’ lakefront property has been in my family 100 years. My financially unreliable sister says she deserves it

My parents have a multi-house lakefront property they live on that has been in my mother’s family for nearly 100 years. While my parents aren’t anywhere near their end, the discussion has already come up of what may happen to the house and property. 

My middle sister said our mother told her that she is getting the house unless I move home because I am financially independent. My mother denies she told my sister that, but I believe my sister. I’ll absolutely respect the wishes of my parents, but I worry that the fairest approach will inevitably favor my middle sister. 

I suppose I am somewhat jaded from the difference in treatment between my siblings and how my middle sister continues to fail upwards. I foresee them leaving the house to my middle sister, as she has proven she can’t handle cash or inherited accounts. She will probably move in there after she sells the house my parents bought her, and I will have to watch the property deteriorate. 

With my middle sister being unwed and having no children, I worry what will happen to it after she passes. Of course, my parents won’t discuss this matter, and it is rude of me to even ask at this point. 

My biggest concern is the condition of the home and keeping it in the family, as I have no plans to raise a family there. 

My oldest sister and I are on the same page and feel that it should be a summer home for the family, and a home for someone if they need it, but not a permanent residence. I’ll be able to come to an agreement in a difficult situation with my oldest sister — the middle sister not so much. 

Could you lay out what options my parents may have, knowing they have already put their assets in a family trust, and how it might shake out for me and my sisters? 

Sincerely,

Looking for Equitable Solutions

Dear Looking,

Your sister is floating the idea of her becoming the Lady of the Lake. It’s a mirage.

She has, by hook or by crook, started a conversation, and may want to prepare you and your other sibling for a scenario that you would be unhappy with — and, more importantly, one that may or may not occur. But she has given you and your sibling the opportunity to have another conversation about the property’s future.

Your mother told you it was not true that your middle sister would inherit this property, or live in it permanently. Believe her. It could be that your mother fobbed her off, and your sister ran with a noncommittal response to get the ball rolling on what she sees as her right to live in a house when her other siblings are financially independent.

Your mother and father, if they’re smart, are not going to entrust this property to a family member who has not proven herself to be financially responsible. Tell your mother that it would be prudent to have an estate plan for the property to ensure it does not fall into disrepair. Offer to help. Let go of your sister’s mischief.

Bob Caplan from Caplan & Wong CPAs in San Mateo, Calif., suggests a qualified personal residence trust or an LLC. “The hard part is explaining their actions to the children so they understand or accept the decision,” he said. “In my experience, most parents avoid the hard conversation and leave the next generation to clean up the mess.”

A trust can reduce estate taxes, avoid probate, increase privacy, and ensure that rental income goes toward upkeep rather than being distributed to the family. A trust would also protect the property from unforeseen issues such as a lawsuit or creditors, should one or more of your family members experience financial hardship.

Your sister’s claims to this property are a red herring. Your parents will and should want to ensure that this remains in your family for another 100 years, so future generations can enjoy it. That requires planning and approaching it as a family, rather than becoming distracted by one person’s self-interest. Don’t play that game.

Also read: Jamie Dimon insists his workers return to the office — here’s why that’s a bit rich

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