Share

The Montana Estate Lawyer

Monday, March 18, 2013

When mom and dad want to leave property to the kids jointly.

Whether it's a family's business, ranch or cabin, when parents want to leave property to the kids jointly we often recommend that the parents set up an ownership structure that will be in place when the kids take over.  

We may suggest that they form a limited liability company with an operating agreement. They can then give the kids ownership interests in the LLC rather than in the property itself.  

The advantage with such an arrangement is, when the kids inherit, there are already rules in place to cover the issues the kids will face.  The kids don't have to negotiate or argue about issues mom and dad already resolved. 

The toughest issue the kids will face is often what to do when one kid wants to be bought out.  The kids don't have to figure out how to handle this thorny issue.  It's already been decided.  No need to head to the courthouse.  Just look at the LLC operating agreement.

Our philosophy is that the arrangement should be fair to all, but mom and dad can give those kids who want to hold onto the property a fighting chance to keep it. 

We don't want any dispute about the price, so we'll specify a mechanism to set the price.  It will be fair but likely not on the high side.  Perhaps there will be a discount from appraised value.  After all, there won't be a realtor's commission.

The departing family member won't be cashed out.  We'll provide for payments over time, perhaps eight to ten years.  Not thirty years.  There will be interest paid on the balance, but the rate will not be exorbitant.  

Most importantly, all these decisions will be made ahead of time, before tempers have flared.  So that what mom and dad worked so hard to put together will benefit - and not burden - the family when they're gone.


Archived Posts

2019
2018
December
November
October
September
August
July
June
May
April
March
February
January
2017
December
November
October
September
August
July
June
May
April
2016
2015
2014
2013
2012
2011
2010


Our law firm, attorneys and lawyers handle matters throughout Montana (MT), including Billings, Bozeman, Great Falls, Havre, Helena, Kalispell, Lewistown, Livingston, Missoula, Shelby and Whitefish.



© 2019 Scott, Tokerud & McCarty, P.C. | Disclaimer
Eight 3rd St. North, Suite 507, Great Falls, MT 59401
| Phone: 406-727-2200

Estate Planning | Elder Law | Veterans Aid & Benefits | Advanced Estate Planning | Probate / Estate Administration | Business Law | Business Succession Planning | Purchase/Sale of a Business | Special Needs Planning | Guardianships | Asset Protection | Planning for Children | Pet Trusts | Events | Articles & Videos | Professional Advisors | Newsletters

Attorney Website Design by
Zola Creative