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It’s Important how you hold title to properties
DEAR BENNY: Years ago our dad built a cabin in Colorado and left it to the five children from two marriages. Since that time, four of us have split the expenses of maintenance, taxes and insurance. We have a large family reunion at the cabin every four years, and family members use the cabin annually. One brother has never contributed and is difficult to locate when needed.
The four of us are getting older and would like to keep the property in the family, as everyone enjoys the use of the cabin and the reunions. There are 12 children from the four of us plus two from the brother who does not participate. What is the best option for keeping the cabin in the family and splitting the costs involved? --R.J.
DEAR R.J.: The first question is how all five of you hold title to the cabin. There are two ways: first, each of you could hold title as "tenants in common," meaning that each has a one-fifth interest. While it may be difficult to find a buyer for that small portion, as a tenant in common you have the right to sell. In this arrangement, on the death of any one of the tenants in common, your share will be distributed accordingly to your last will and testament (which you should have). And in many states, probate will be necessary.
Alternatively, you all could hold title as "joint tenants with rights of survivorship." Here, if one of you dies, the remaining four siblings will then own the entire cabin. This is not fair to the spouses or to your children who may lose the right to have any ownership. (I am ignoring for this discussion spousal rights to claim an interest despite any provisions in the will.)
So, just for this issue alone, you should consult an attorney who will review the title and advise you the best way to deal with this. My suggestion: "Title is held by each of the children and their wives as joint tenants with rights of survivorship, but as to each of the other children, as tenants in common."
What does this accomplish? If one of you should die, your spouse will automatically inherit your one-fifth interest in the cabin. If your spouse predeceased you, you will be the sole owner of your share and can arrange to leave it to your children on your death. But since you own your one-fifth interest as tenants in common with your other siblings, they keep their interests and you do not lose yours.
But talk to your attorney. She may recommend that you create a limited liability company to hold title to the property.
As for the brother who does not make payments, you can ignore it from a family point of view, or you can demand that either he pay his fair share or sell his interest to the remaining four of you.
