Property in Hawaii held in confusion

[kahea414]

I have been made the beneficiary and trustee of an acre of land on the Big Island of Hawaii. This acre was left to me by my grandfather. We have lived here on this property for over 35 years. The acre of property we live on is not owned exclusively by my grandfather but by 3 other family members as well, each owning a quarter share. This parcel of land was originally bought and owned by my grandfather's father. He left a quarter share each to his daughter, her two children, and my grandfather. My grandfather and his sister have since passed leaving his share in a trust to me, and his sister's share with her children. I have moved my family back onto the property to take care of my grandmother who suffers from Alzheimer's Disease. She is in the late stages of this illness. Since she is not competent, I am responsible for her and all the decision making. This home has not had any repairs made to it since the '70s and it is falling apart!! Ever since moving onto this property 35+ years ago, the other family members have shown no interest in this property, and according to my grandfather, they have not paid land taxes at all. All payments have been made by my grandfather and he has made sure that all payments made at the land tax office reflected that HE was the one making payments. (payments filed under his name and number) Upon his passing, I am noticing that our land tax payments are in arrears. We have a balance due of about $15,000. This includes the last installment for 2016 and all of 2017 and 2018. (including penalties and interest) Our law here in Hawaii says that if you fall behind more than 2 years on your land tax payments then they can foreclose on your property.
I recently got a tax sale jeopardy letter in the mail asking for $8,900.00 by the 30th of June to be taken off the list. I need some advice as to what I can do? I do not have very good credit and I'm not sure if banks will work with me being that there are other parties/owners listed on the deed. Should I start with getting the property out of trust and into my name? Can I hold the other parties on the deed accountable for past land tax payments? Should I see a lawyer? I haven't spoken with the other family members in years. The last time words were exchanged they were not nice. How can I get some equity out of this property being that it is paid off in full and worth approx. $700,000. Any help or advice would be greatly appreciated.

 

[justalayman]

It’s not clear. Do you, as trustee and beneficiary of the trust, hold a 1/4 share only of the property or something else? Is it only your share that is held in trust?

Why does your grandmother live on the land? Is it based on courtesy of the owners or does she hold some legal right to be on the land? Depending on that answer, it may be your grandmother who is liable for the taxes.

Its very difficult to borrow against the property without all holders of interest agreeing to agree and allow a lien against all of their interest.


When a person enjoys the benefits of a property when other shareholders do not enjoy the same benefits, it is often accepted that those enjoying the benefits should pay the costs of the property. A life estate tenant, which would be as close a comparison to you and your grandmothers situsiton as anything, are typically liable for the cost of taxes and general upkeep of the property. The others that do not benefit from the property typically would not be liable for the regular costs of owning or using the property.



You might address the other owners as they may be willing to assist in paying the taxes so they do not lose their interest to a tax foreclosure. Maybe they don’t care. You’ll never know unless you ask.

 

[xylene]

Offer to sell your share to one of the other 3 owner entities could be one approach to getting equity out.

Bluntly, you need legal help to protect your assest. You need to act on that very very soon. You need to come to terms with the fact that you may have to pay the whole tax due before going after the other owners, if that is even possible. Worry about the immediate tax foreclosure 1st before addressing past tax payment inequities.

 

[kahea414]

It’s not clear. Do you, as trustee and beneficiary of the trust, hold a 1/4 share only of the property or something else? Is it only your share that is held in trust?

Why does your grandmother live on the land? Is it based on courtesy of the owners or does she hold some legal right to be on the land? Depending on that answer, it may be your grandmother who is liable for the taxes.

Its very difficult to borrow against the property without all holders of interest agreeing to agree and allow a lien against all of their interest.


When a person enjoys the benefits of a property when other shareholders do not enjoy the same benefits, it is often accepted that those enjoying the benefits should pay the costs of the property. A life estate tenant, which would be as close a comparison to you and your grandmothers situsiton as anything, are typically liable for the cost of taxes and general upkeep of the property. The others that do not benefit from the property typically would not be liable for the regular costs of owning or using the property.



You might address the other owners as they may be willing to assist in paying the taxes so they do not lose their interest to a tax foreclosure. Maybe they don’t care. You’ll never know unless you ask.

Thank you for your response.
I own 1/4 share in the property and it is my grandfather that set up the trust with the property being the only thing in it. I'm guessing to avoid probate. My grandparents have lived on this land since I was little. My grandmother was the initial beneficiary, but since she is incompetent, I am next in line.

I agree with it being difficult to borrow against the property since there are others involved.

I understand that since we live here we should be responsible for the upkeep. I'm thinking that at some point in time the other parties may be responsible for back payment of property taxes as well as any improvements that I decide to make?

Looks like I will have to confront the other family members soon. I just wanted to know if there was any leverage that I could use to help plead my case regarding my grandfather paying everyone's share for so long.

 

[kahea414]

Offer to sell your share to one of the other 3 owner entities could be one approach to getting equity out.

Bluntly, you need legal help to protect your assest. You need to act on that very very soon. You need to come to terms with the fact that you may have to pay the whole tax due before going after the other owners, if that is even possible. Worry about the immediate tax foreclosure 1st before addressing past tax payment inequities.

Selling is NOT an option.

I appreciate you being blunt. So, I need a lawyer, and that lawyer will help to protect my assets by getting my interest out of the trust? and possibly offer any advice that I can use to help protect our interest? I'm sorry...I'm so new to all of this.
Also, I'm not sure but I heard that it is part of the law here in Hawaii that the other owners have to pay back all the years that they haven't paid property tax?? Does this even sound somewhat correct?

Lastly, any feedback on some of the property tax lenders that I'm seeing here on the internet? Are they any good?

Thank you again for your help.

 

[justalayman]

Thank you for your response.
I own 1/4 share in the property and it is my grandfather that set up the trust with the property being the only thing in it. I'm guessing to avoid probate. My grandparents have lived on this land since I was little. My grandmother was the initial beneficiary, but since she is incompetent, I am next in line.

I agree with it being difficult to borrow against the property since there are others involved.

I understand that since we live here we should be responsible for the upkeep. I'm thinking that at some point in time the other parties may be responsible for back payment of property taxes as well as any improvements that I decide to make?

Looks like I will have to confront the other family members soon. I just wanted to know if there was any leverage that I could use to help plead my case regarding my grandfather paying everyone's share for so long.

A life tenant is liable for taxes on a property. If fhis is formal life tenancy for your grandmother, she would be liable for the taxes. If this is informal, morally you and the grandmother would be liable for the taxes. You might want to consider the possibility that if you expect the others to share in the taxes they may take issue with your situstion of having control of the property and move to change that. If there is a shared ownership, all owners have a right of possession and use. If you bar them from exercising such rights, you could be held liable for 3/4 of the market value rent.

A lot depends on information not provide. It would probably be a good idea to speak with an attorney who could advise you after learning all of the pertinent facts.

 

[justalayman]

Selling is NOT an option.

I appreciate you being blunt. So, I need a lawyer, and that lawyer will help to protect my assets by getting my interest out of the trust? and possibly offer any advice that I can use to help protect our interest? I'm sorry...I'm so new to all of this.
Also, I'm not sure but I heard that it is part of the law here in Hawaii that the other owners have to pay back all the years that they haven't paid property tax?? Does this even sound somewhat correct?

Lastly, any feedback on some of the property tax lenders that I'm seeing here on the internet? Are they any good?

Thank you again for your help.

You would be wrong on the law regarding the property taxes. Owners in general owe for the taxes on a property but there are issues that can affect who is liable for their payment. Depending on the situstion, even if the others pay the taxes, depending on all the facts, they may have a valid claim against you and or your grandmother for what they paid.



You keep mentioning the trust. If the trust holds the entire ownership (not just your 1/4 share but all interest in the property including the other relatives), you, as trustee, would be liable to pay the taxes. The trust would owe the taxes, not the beneficiary. If you fail to pay the taxes and lose the property, the other beneficiaries of the trust could have an action directly against you for all of their losses. Where the money to pay the taxes would come from would have to be addressed in the trust documents.

I also don’t see where your grandfather paid anybody’s share of anything. If he crated the trust, either he, if it was a revocable trust until it became irrevocable or the trust itself if it was an irrevocable trust would be liable to pay the costs of the property.

The more you write, the less responsibility I see the other family members have and the more I see you, as trustee having in this situation. Again, if you failed to protect the beneficiaries interest, they would have an action against you personally for failing to fulfill your fiduciary duty to the trust and as such, the beneficiaries.


I think you really need to speak with a lawyer to help you understand what is going on

 

[xylene]

Selling is NOT an option.

It would be a tough option, but yeah it is. Your grandmother is not the first person to be land rich and cash poor. Step back from the family legacy angle and see the situation, a property with a complex title and contentious owners and a house that you say is in poor repair and a looming tax foreclosure. You need to weight that in your plan of action, because yes it would potentially preserve the equity of an unmortgaged fully owned property. Plus selling to other owners would preserve family legacy.

 

[not2cleverRed]

Selling is NOT an option.

I appreciate you being blunt. So, I need a lawyer, and that lawyer will help to protect my assets by getting my interest out of the trust? and possibly offer any advice that I can use to help protect our interest? I'm sorry...I'm so new to all of this.
Also, I'm not sure but I heard that it is part of the law here in Hawaii that the other owners have to pay back all the years that they haven't paid property tax?? Does this even sound somewhat correct?

Lastly, any feedback on some of the property tax lenders that I'm seeing here on the internet? Are they any good?

Thank you again for your help.

Well, because June 30th is this Sunday, you are correct.

No one has paid property taxes since 2016.

When the property is seized for the tax lien, all the owners lose any claim on it. Since you cannot afford to live on the property, remind your relatives: if the taxes are not paid, they lose their interest as well. They may be rather upset, since they could have forced a sale, had they known earlier.

 

[justalayman]

It isn’t clear, to me at least, on what is held by the trust. I kind of suspect grandma may have been allowed to live on the property until she passes. After thst the trust assets would be distributed to the beneficiaries. (I caution all that read this. That is only a wag based on what the op has statwd and what they have not answered when asked)

If that is the case and op is the trustee, op may find themselves liable to the other beneficiaries to the tune of nearly $200,000 each for failing to fulfill his fiduciary duty to the beneficiaries of the trust.


Op needs to stop playing around with this trying to blame others and speak with an attorney. As trustee he has great responsibilities if he is not then only beneficiary. If he is the sole beneficiary then he is only hurting himself by not acting as are the others.

 

[kahea414]

It would be a tough option, but yeah it is. Your grandmother is not the first person to be land rich and cash poor. Step back from the family legacy angle and see the situation, a property with a complex title and contentious owners and a house that you say is in poor repair and a looming tax foreclosure. You need to weight that in your plan of action, because yes it would potentially preserve the equity of an unmortgaged fully owned property. Plus selling to other owners would preserve family legacy.

Thank you for this perspective. As tough as it may be, I am open to advice.