What are some ways a property owner could leave property to his/her heirs in such a way that the property would be preserved for a very long time?

Asked by farmer (371

) August 17th, 2015

Suppose I am an elderly man who owns a vacation house on a lake somewhere. I’ve owned the house for thirty years, and my children and especially my grandchildren have enjoyed using this house during these thirty past years. I would like to ensure that my family can continue to use the lake house after my death. I have five children and fifteen grandchildren.

What would be my options in this situation? If I leave the property to my five children jointly, it would only take one of them (or one of their spouses) wanting to sell the property to force everyone else into selling, unless the other four could buy out that person’s share. If I leave it to the five of them, I think the house will be sold rather quickly. Not all of them use the house very much, and it is not realistic to think that they will want to continue paying taxes, insurance, and maintenance on a house that they do not use.

The other option might be a trust. This is mainly what I’m hoping your answers can address. I do not have enough capital to put into a trust where that capital could earn interest enough to pay for all of the taxes, insurance, and other expenses. What I’m wondering is whether there is some way of setting up a trust where the house would be owned by the trust, the trust would have some amount of money to cover certain repairs to the house, but the beneficiaries would be responsible for paying the taxes? Between my fifteen grandchildren (who are all in young adulthood now) each grandchild paying $200 each per year would cover all of the property taxes. I think each of them would be willing to contribute this amount for the privilege of using the house whenever they want to. Is this feasible? If not, is there a similar option I could look into?

I realize before doing anything one would need to take to an estate planning lawyer. I am asking this not as a replacement for talking to a lawyer, but more as a way to know what to ask the estate lawyer when I go to see him.

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7 Answers

Why not create a corporate entity like a non-profit NGO and transfer your assets to it, then give yourself and each of your heirs a seat on the board? Board law would then determine disposition of the assets and who gets to make the decision. This way it would take 50% +1 to sell the assets rather than a single individual.

SmashTheState (14252

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I am not sure how it works, but I know there are organizations that create conservation trusts to preserve wild lands, ranches and farms.

Here are some examples in Colorado.

Colorado Coalition of Land Trusts

Legacy Land Trust

Colorado Cattlemen’s Agricultural Land Trust

jaytkay (25810

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You really need to talk to an estate lawyer.

You might want to talk to your kids also. If two of them don’t use it a lot, maybe they would prefer some money in lieu of ownership.

If you will it to your five children you would have to consider how the ownership changes hands if one of them dies (God forbid). Does it go to a spouse or their children? Or, the surviving siblings who already have partial ownership.

JLeslie (65790

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I think you might be able to stipulate that if any party wishes to sell their share they must first offer to sell it to the others for $100 or any specified amount

Judi (40025

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Just pulling a random number out of my head… Who would sell a $20,000 share for $100? Or is that designed to keep them locked in no matter what?

Dutchess_III (47126

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We have a family farm that has been passed down for several generations since before the civil war. What my family does each generation is sell the property, divide up the money and then one family member buys the farm back, using their profits from the sale as a down payment.

keobooks (14327

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@Dutchess_lll, it’s designed to keep the real estate under family control.

Judi (40025

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