mom giving cabin to 4 kids

[4ofus]

What is the name of your state? AZ

My mom and dad built a beautiful family cabin up north 25 years ago. They built it with cash so it is free and clear of any mortgage. Dad died 10 years ago. The 4 brothers/sisters have been paying for upkeep and taxes for the past 7 years. Mom wants to give the cabin to the 4 living children now since we have been paying for the taxes, upkeep, and renovations for so long.

We are trying to research the best way to transfer the property to the best financial benefit of all involved. Least amount of taxes, protection from lawsuits, protection from possible future divorce case involvement, etc.

One brother seems to do the most upkeep on the cabin with one sister's family contributing zero to the physical labor and maintance of the cabin. Is there someway we should deal with this to keep the peace.

The grandchildren are causing additional problems. Each sibling is married and has a family of their own. The grandchildren range from 34-17. The grandchildren have all been raised with the mind set that this is a family cabin. When the 4 siblings started paying for everything they talked about grandkids not going up with out their parents. Everyone was responsible for damages caused during their stay, etc. A couple of the siblings allow their children to go up to the cabin by themselves. Some of the 11grandchildren treat it as their own private free vacation cabin. When accidents happen as they do with immature people, no one is taking financial responsibility.

How do we control the fair use of the cabin and the financial responsibilities of accidents?

Any help would be appreciated. The 4 of us get along well. WE have accepted each other for who we are, but we have different idea's about how our children should be allowed to use the cabin. We don't want this issue to be our family's demise. The cabin was built to stregnthen the family unit, not tear it apart. We are all well aware of the fact we need to take action fast.
Thanks.

 

[Ozark_Sophist]

Is your mother in good health? Does she have health insurance? Long-term care insurance? If she or you dad is/was currently on Medicaid or could expect to with the next five years (if she had to go into an assisted living facility), how she disposes of her assets could have a financial impact on her care.

Given the number of siblings and depending on your answers to the above questions, a visit to a financial planner and/or attorney would be a good investment.

 

[lwpat]

You need to answer the above questions first and then ask the elder care attorney about
placing the cabin in a living trust with the four of you as beneficiaries. Whatever you do one person needs to take responsibility for taxes, insurance and upkeep. Anyone wishing to use the cabin should reserve the time and pay rent. I also suggest a signed agreement as to damages.

I have found the best way to preserve family peace is to let a professional third party manage the property.

 

[4ofus]

Is your mother in good health? Does she have health insurance? Long-term care insurance? If she or you dad is/was currently on Medicaid or could expect to with the next five years (if she had to go into an assisted living facility), how she disposes of her assets could have a financial impact on her care.

Given the number of siblings and depending on your answers to the above questions, a visit to a financial planner and/or attorney would be a good investment.

Yes, she is in good health. She has great health insurance and long term care insurance. She is on Medicaid with an additional policy. At first she wanted to keep the cabin in case she needed to sell it to cover long term care. Then she decided she had ample insurance/money/investments.

Thank you for your help.

 

[Ozark_Sophist]

How did your mother qualify for Medicaid with the additional real property asset or does she live in the cabin? Or perhaps you meant Medicare?

If your mother has Medicaid, her eligiblity could be affected by a transfer of real property without compensation at or near fair market value (some states say 90% of FMV). But it sounds like she has Medicare so this doesn't apply.

In that case, lwpat has an excellent suggestion with the living trust.

 

[anteater]

I also suspect that the OP means Medicare.

But, a living trust is not going to help regarding eligibility for Medicaid. As long as the assets are avaialble to the person applying, they are counted.

 

[4ofus]

Yes, I am so sorry. I meant Medicare, not Medicaid. My brother was the first to catch me on the mistake.

We are in the process of looking for an elder care lawyer in our area. I do understand the laws change from state to state. I have learned so much from my research this weekend.

I am not sure if I understand this correctly. If we form an LLC and place the cabin in a trust owned by the LLC I think it is the best way to protect our asset.

Other research conducted suggested mom start gifting portions of the cabin to us. We are also going to pursue that with an accountant.

We are also looking into VERY specific rules/regulations in writing with everyone signing off on them. The siblings get along great now- we want to keep it that way.

Thank you so much with all the suggestions. I am still open to more suggestions.