Inheritance question: Inheriting something you aren't supposed to sell

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miamivice
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Inheritance question: Inheriting something you aren't supposed to sell

Post by miamivice » Tue Nov 28, 2017 3:27 pm

I have an inheritance question. Of my siblings, myself and one sibling are in financially good shape with our remaining siblings are experiencing various challenges. Similar story with my wife. She's (we) are financially much better off than her siblings.

There's an outside chance that either our sets of parents might end up leave her or myself an item (piece of real estate) with the condition it not be sold, as her/my portion of inheritance. We are financially the ones that have the means to pay taxes and provide upkeep on the piece of real estate, and we are also the ones who could afford not to liquidate it, thereby, keeping it in the family for another generation.

I'm not thrilled with the idea of receiving an item with the expectation not to sell it, while still having to pay taxes and upkeep of the item.

I'm wondering if others have experienced this, and it if is worthwhile discussing with family if they choose to discuss inheritance?

Has anyone else receiving inheritance with strings attached?

KlangFool
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by KlangFool » Tue Nov 28, 2017 3:32 pm

OP,

There is a simple solution. Give that real estate equally to your siblings. Or, just tell your parents not to give you anything.

KlangFool

Jack FFR1846
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by Jack FFR1846 » Tue Nov 28, 2017 3:35 pm

My dad and his 4 siblings inherited land in Florida. While there were no strings, it was still a real pain in the butt. In the end, the land was given to the HOA neighborhoods where they sat as it was too much bother and cost to do anything with them. Perhaps a sit down with the parents at this time, expressing that you are not interested in holding the land and siblings doing the same would be in order. If they hold onto their requirement, let them know that you won't be accepting the inheritance and to perhaps leave it to a charity who might be willing to not sell the land for some period of time.
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miamivice
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by miamivice » Tue Nov 28, 2017 3:40 pm

Jack FFR1846 wrote:
Tue Nov 28, 2017 3:35 pm
My dad and his 4 siblings inherited land in Florida. While there were no strings, it was still a real pain in the butt. In the end, the land was given to the HOA neighborhoods where they sat as it was too much bother and cost to do anything with them. Perhaps a sit down with the parents at this time, expressing that you are not interested in holding the land and siblings doing the same would be in order. If they hold onto their requirement, let them know that you won't be accepting the inheritance and to perhaps leave it to a charity who might be willing to not sell the land for some period of time.
Thanks Jack.

You post helps me see the answer. I don't mind inheriting real estate, but don't wish to accept anything that has strings attached (a verbal agreement not to sell). I always want the option of liquidating an investment if that's what makes the most sense later, and I think that's reasonable. I think that conversation is reasonable if either of our parents bring it up.

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Tamarind
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by Tamarind » Tue Nov 28, 2017 3:41 pm

If feasible, the time to have a conversation with parents about this is now. Ask them for your sakes not to try to rule from the grave.

It's not kind to your children to give inheritances with strings, especially when one sibling gets the "benefit" and another the "strings". It depends on if your parents' goal is primarily to preserve the thing FROM the less well off siblings or to preserve it FOR the siblings.

FROM - I would think the best way to do this would be to sell the item (or have the estate instructed to sell it, if it's their primary residence) and divide the money among the siblings as desired either outright or in trust. The appropriate vehicle for reserving money to the benefit of a child is a trust.

FOR - If the item is of sentimental value it should be left to a single child who feels similarly. But they need to understand that that child owns the thing and can sell it at need. If none of their children feel similarly or if the child who loves the thing cannot afford its upkeep, they should sell it to someone else that they think does appreciate it and leave the children the proceeds.

Worst of all would be asking some siblings to pay upkeep and taxes on a house for another sibling to live above their means. We see threads about this here and it can be the last straw that breaks the relationship between siblings.

Broken Man 1999
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by Broken Man 1999 » Tue Nov 28, 2017 3:52 pm

My father gave my brother and I some good advice when we were considering the selling of our citrus groves. My brother wanted to somehow retain the grove that was on the land that also was the location of the family home. His (my father's) advice was to do business with your head, and not your heart. I'm sure he wasn't the first to tell someone that particular advice. Nevertheless it was good advice.

People sometimes place high value on things that are no longer profitable, productive, or even truly wanted because of sentimental reasons. I would have loved to have had the resources to buy the homestead myself. But, it would have been a mistake. An absentee landlord coupled with managing a declining citrus grove that had seen it's best days would have ruined the efforts my wife and I were doing to better our standard of living across the state.

Another grove was on land where my grandfather settled. Instead of growing citrus, the new owners grew residences.

What makes this land so special that such restrictions would be appropriate?

Broken Man 19990
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flamesabers
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by flamesabers » Tue Nov 28, 2017 3:54 pm

Tamarind wrote:
Tue Nov 28, 2017 3:41 pm
Ask them for your sakes not to try to rule from the grave.
+1.

I see inheritance as a two-way street. Just as the parents have the right to decide how they want to distribute their estate, the children have the right to decide how they want to utilize their inheritance once they have taken ownership of it. If your parents aren't comfortable with the possibility of you selling the real estate at some point in the future, they should find a beneficiary who is willing to hold and maintain the real estate.

new2bogle
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by new2bogle » Tue Nov 28, 2017 3:58 pm

Just sell it. Dead parents can't ground you.

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FIREchief
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by FIREchief » Tue Nov 28, 2017 4:00 pm

miamivice wrote:
Tue Nov 28, 2017 3:27 pm
There's an outside chance that either our sets of parents might end up leave her or myself an item (piece of real estate) with the condition it not be sold, as her/my portion of inheritance.
How is this possible in the absence of a trust with an independent trustee?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

Rupert
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by Rupert » Tue Nov 28, 2017 4:10 pm

FIREchief wrote:
Tue Nov 28, 2017 4:00 pm
miamivice wrote:
Tue Nov 28, 2017 3:27 pm
There's an outside chance that either our sets of parents might end up leave her or myself an item (piece of real estate) with the condition it not be sold, as her/my portion of inheritance.
How is this possible in the absence of a trust with an independent trustee?
+1. I think the only way your parents can be 100% sure their wishes with respect to the property will be honored is to put the property in a trust. If they do that, they should fund the trust sufficiently to maintain the property for a generation.

You should strongly recommend that your parents (both sets) see good estate planning attorneys. The attorneys will likely strongly recommend against doing what you say they want to do. Conditional bequests complicate an estate. They can lead to challenges to the will, and create problems that reach far into the future. For example, who is going to enforce the condition that you not sell the properties if you decide to sell them 20 years from now? It can become a huge mess and end up costing everyone (estate, beneficiaries) a lot of money.
Last edited by Rupert on Tue Nov 28, 2017 4:23 pm, edited 2 times in total.

badger42
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by badger42 » Tue Nov 28, 2017 4:13 pm

We have that situation with a bunch of low-value collectibles (milk glass), early to mid 1900s brown furniture, antique non-microwavable / non-dishwashable china, and a ton of what's basically "curio cabinet clutter" that one of my parents sees as their legacy and wants to give to somebody who will 'love' it.

I've made it clear that I don't want to inherit anything I can't sell. None of my siblings want the stuff either. It may go to a cousin, which is just fine.

Gnirk
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by Gnirk » Tue Nov 28, 2017 4:29 pm

Depending upon how the will is written, and your state laws, you may just be able to disclaim that portion of your inheritances, and your share will be split among your siblings. Discuss it with the estate attorney, or discuss it with your respective parents.

Gill
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by Gill » Tue Nov 28, 2017 4:35 pm

FIREchief wrote:
Tue Nov 28, 2017 4:00 pm
miamivice wrote:
Tue Nov 28, 2017 3:27 pm
There's an outside chance that either our sets of parents might end up leave her or myself an item (piece of real estate) with the condition it not be sold, as her/my portion of inheritance.
How is this possible in the absence of a trust with an independent trustee?
Legally it could be done without a trust by leaving a legal life estate to B with remainder to C. No need for a trustee and B only has life use of the property.
Gill

Gnirk
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by Gnirk » Tue Nov 28, 2017 4:36 pm

badger42 wrote:
Tue Nov 28, 2017 4:13 pm
We have that situation with a bunch of low-value collectibles (milk glass), early to mid 1900s brown furniture, antique non-microwavable / non-dishwashable china, and a ton of what's basically "curio cabinet clutter" that one of my parents sees as their legacy and wants to give to somebody who will 'love' it.

I've made it clear that I don't want to inherit anything I can't sell. None of my siblings want the stuff either. It may go to a cousin, which is just fine.
Those items obviously hold much meaning for your parents. I have inherited family heirlooms, and each one has a story to go with it. I intend to leave them to my children, but have told them they can keep what they want, and are under no obligation to keep any of them. However, I'd be pretty ticked off if one of my children told me they don't want to inherit anything they can't sell. But that's just me.

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lthenderson
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by lthenderson » Tue Nov 28, 2017 4:45 pm

flamesabers wrote:
Tue Nov 28, 2017 3:54 pm
Tamarind wrote:
Tue Nov 28, 2017 3:41 pm
Ask them for your sakes not to try to rule from the grave.
+1.

I see inheritance as a two-way street. Just as the parents have the right to decide how they want to distribute their estate, the children have the right to decide how they want to utilize their inheritance once they have taken ownership of it. If your parents aren't comfortable with the possibility of you selling the real estate at some point in the future, they should find a beneficiary who is willing to hold and maintain the real estate.
+2

Be honest with them if they ask your feelings but in the end, it is yours to do as you please.

badger42
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by badger42 » Tue Nov 28, 2017 5:56 pm

Gnirk wrote:
Tue Nov 28, 2017 4:36 pm
badger42 wrote:
Tue Nov 28, 2017 4:13 pm
We have that situation with a bunch of low-value collectibles (milk glass), early to mid 1900s brown furniture, antique non-microwavable / non-dishwashable china, and a ton of what's basically "curio cabinet clutter" that one of my parents sees as their legacy and wants to give to somebody who will 'love' it.

I've made it clear that I don't want to inherit anything I can't sell. None of my siblings want the stuff either. It may go to a cousin, which is just fine.
Those items obviously hold much meaning for your parents. I have inherited family heirlooms, and each one has a story to go with it. I intend to leave them to my children, but have told them they can keep what they want, and are under no obligation to keep any of them. However, I'd be pretty ticked off if one of my children told me they don't want to inherit anything they can't sell. But that's just me.
I have no doubt some of them have stories, but we live in a small place in a VHCOL area (as do my siblings - different VHCOL area), and said parent with the pile of collectibles and brown furniture lives in a huge place in a low-cost area. They also asked what we wanted, and the answer was essentially "nothing".

However, having dealt with strings-attached gifts before - unless you're totally broke and it gets you out of the hole, I would not accept anything with strings attached.

Dottie57
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by Dottie57 » Tue Nov 28, 2017 6:08 pm

lthenderson wrote:
Tue Nov 28, 2017 4:45 pm
flamesabers wrote:
Tue Nov 28, 2017 3:54 pm
Tamarind wrote:
Tue Nov 28, 2017 3:41 pm
Ask them for your sakes not to try to rule from the grave.
+1.

I see inheritance as a two-way street. Just as the parents have the right to decide how they want to distribute their estate, the children have the right to decide how they want to utilize their inheritance once they have taken ownership of it. If your parents aren't comfortable with the possibility of you selling the real estate at some point in the future, they should find a beneficiary who is willing to hold and maintain the real estate.
+2

Be honest with them if they ask your feelings but in the end, it is yours to do as you please.
There is probably a missing condtion. OP Doesn't want to inherit something he can't sell when it incurs liability and taxes.
The bequest is quite costly.

overthought
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by overthought » Tue Nov 28, 2017 7:16 pm

I have this vague memory that there is a specific legal term (encumbrance?) for cases where a will forbids the beneficiary from selling inherited property or otherwise restricts their ability to deal with the inheritance as they see fit... and that the practice has been illegal/unenforceable for a long time, perhaps more than 100 years under English Common Law (which is the starting point for US law as well).

Having trouble finding a citation, however...

basspond
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by basspond » Tue Nov 28, 2017 7:35 pm

I was looking to purchase some land from a family with three remaining siblings. Two of them wanted to sell and had no interest in the property, the other had taken care of their parent and I could tell was very distraught that they were selling and the person who wanted to keep it didn't have the funds to purchase. I would suggest a family meeting with all involved to ensure that there will be no grudges within your family. Good luck, the almighty dollar easily spoils the blood bond.

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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by technovelist » Tue Nov 28, 2017 8:38 pm

overthought wrote:
Tue Nov 28, 2017 7:16 pm
I have this vague memory that there is a specific legal term (encumbrance?) for cases where a will forbids the beneficiary from selling inherited property or otherwise restricts their ability to deal with the inheritance as they see fit... and that the practice has been illegal/unenforceable for a long time, perhaps more than 100 years under English Common Law (which is the starting point for US law as well).

Having trouble finding a citation, however...
I believe you are thinking of an "entailed estate".
In theory, theory and practice are identical. In practice, they often differ.

2comma
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by 2comma » Wed Nov 29, 2017 12:38 am

badger42 wrote:
Tue Nov 28, 2017 4:13 pm
We have that situation with a bunch of low-value collectibles (milk glass), early to mid 1900s brown furniture, antique non-microwavable / non-dishwashable china, and a ton of what's basically "curio cabinet clutter" that one of my parents sees as their legacy and wants to give to somebody who will 'love' it.

I've made it clear that I don't want to inherit anything I can't sell. None of my siblings want the stuff either. It may go to a cousin, which is just fine.
I was in a similar situation and had little interest in inheriting dad's things that had passed down through several generations. Then at a family reunion I finally figured out he desperately wanted to pass these onto his sons who had sons so it would be kept with the family name. Dad has done a lot of genealogy work and has passed many things onto a historical society but some things were special to him and he wanted to pass them down the family line. I told my bother, the only other male with male children that we'd better show some interest and sign up. I could see it brought him great joy when we both asked to see the list of things he wanted us to inherit, and later our sons to take care of. I'll honor his request and at the appropriate time ask my son to do the same for me. Luckily for us the carrying cost of these keepsakes is small and I do hope some far descendant gets a kick out of this in the future. I do feel a little sexist/unbalanced about all of this but they hold only sentimental value and my other sibling don't have any problems with his wishes.
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not4me
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by not4me » Wed Nov 29, 2017 2:50 pm

I'll admit to not reading all the above & so apologize if this has been covered. I take it that you expect from either or both sets of parents that your inheritance would be non-income producing property of some sort. It almost sounded as if you felt the parents would be ok if the property were sold after your generation -- in which case the question comes up as to whether the property is appreciating in value at any significant rate.

I'm assuming that you feel both sets of parents have emotional attachments to the property -- maybe vacation home, undeveloped property, etc. And they are not wanting to face having to dispose of it; maybe even received it from previous generation with a similar constraint. That being the case, I would caution that they may react very negatively if you tell them you don't want it. It could sound as if you reject their legacy.

One approach might be to suggest they leave the property in trust with sufficient assets to sustain the property. The process of thinking through the rigors of that might help them to see they are asking you to "get" an obligation while siblings get an inheritance. Perhaps the trust could distribute income after property expenses & all share annually & when the trust is dissolved. Might even help other siblings avoid blowing a windfall

ny_knicks
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Re: Inheritance question: Inheriting something you aren't supposed to sell

Post by ny_knicks » Wed Nov 29, 2017 9:01 pm

Easy solution: "Yep mom will cherish old grandads plot forever"...for sale sign goes up when the times right. They won't know and certainly won't care. I wouldn't turn down free money.

Maybe I lack the proper conscience...

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