What to Do When Unable to Afford Buying Out of Our Mother’s $450,000 House, Leaving My Sister Without a Home
In a heartfelt letter to financial columnist Quentin Fottrell, a reader shares their concern about their sister’s financial irresponsibility and the potential implications for their inheritance. The reader’s father has passed away, and their mother’s home, valued at $450,000, is fully paid for. The reader and their sister are the only children and both have their names on the deed as second life tenants. The reader worries about what will happen when their mother eventually passes away, as their sister and her husband are financially unsavvy and ill-prepared for the future.
The reader acknowledges that they are in a better financial position than their sister and her husband, with double the income and more financial stability. They express a desire to receive a fair share of their inheritance based on their own success and decision-making, without being punished for their sister’s choices.
One option presented by the reader is to force the sale of the home when their mother passes away, which would leave their sister and her husband with cash but no house. However, this would make the reader look like the bad guy and potentially strain family relationships. The reader is unsure if their sister and her husband would even be able to afford a mortgage on the property, even with all of their mother’s liquid assets.
Another concern raised by the reader is the liability of keeping their name on the house forever. Their brother-in-law has a history of avoiding homeowner’s insurance, which puts the reader at risk of loss if something were to happen to the house.
In response to the reader’s concerns, Fottrell advises that splitting the inheritance 50/50 is the right thing to do. However, he also suggests exploring the exact status of the inheritance as life tenants, as this may limit the ability to sell the property. Fottrell emphasizes that the reader cannot live their sister’s life for her or make decisions on her behalf. Instead, the reader should focus on how they will spend, save, and invest their own inheritance.
Fottrell provides various options for the reader to consider, such as upgrading or downsizing their own home, investing in CDs or high-quality dividend-growth stocks, and diversifying into other assets like gold or commodities. He also mentions a woman from Texas who inherited a life-changing sum of money and used it wisely to build an off-grid tiny house and invest in her own well-being.
Regarding the sister and her husband, Fottrell suggests offering to provide a financial adviser as a gift to help them make smart decisions with their inheritance, rather than spending it on depreciating assets. However, he warns against going into business with a family member, as it can lead to complications and potential conflicts. A clean break may be the best solution for everyone involved.
In conclusion, the reader’s concerns about their sister’s financial situation and the potential impact on their inheritance are valid. However, it is important for the reader to focus on their own financial decisions and seek professional advice on how to make their inheritance work for them. Ultimately, they cannot control their sister’s choices but can offer support and guidance if needed.
