#52 Keeping Property in the Family


Let’s face it:  Buying a home in any situation is a big job!   It can be an easy big job, a tough big job and even a complicated big job.   It all depends on the circumstances; and, the circumstances in a family member to family member transaction cover a lot of details that require very careful consideration.

Buying the home of a family member is a really good opportunity, and is one of those situations with a lot of new things to consider – both before and after the possible transaction.  When you are a relative of the owner, there are many advantages to buying their home.

You may simply be the designated inheritor -- that’s probably the easiest path!  Or, you may be a related, named executor in a will for a family member’s property that includes their family home; and the opportunity is just right there in front of you.   You might be another relative of the deceased family member whose disposable property includes a home that you would like to purchase from the estate.  There are other technical connections that would qualify you for the special benefits of buying a residential property that’s in your family – such as being a legally adopted family member. 

Just as “qualifying” as a family member is imperative, knowing what you have to do and when you have to do it is just as critical.  If you believe you qualify and might be interested in purchasing a home that is “in the family,” it is important to connect with the right experts for the right guidance – without delay.   (Buying a family owned property is different from buying a residential property from others --even if they are close enough to feel like family!) 

When a family property becomes available to sell due to the death of the owner, grief often plays a large part in the dynamics surrounding the disposal of the property.  Those natural emotions might obscure the opportunity until it is too late to act.  In some cases there are competitive family politics that can make the circumstances around the transfer of the property difficult, controversial and clouded with confusion.  Misunderstandings and disputes among family members sometimes involve what others “thought and believed was intended by the deceased.” 

Such conditions make it all the more important to be sure that your advisors are in neutral positions where the actual property is concerned, and are specifically knowledgeable and experienced in family-to-family property transactions.   Getting wrong or untimely guidance in the transfer of family property from one relative (or relative’s estate) to another can be the cause of considerable loss.  Loss can take the form of missing your entitlement to certain benefits due to missing imperative time and date mandates; or, ignorance of the appropriate process and ignorance of rightful taxation benefits.

You may have never given thought to purchasing Auntie’s home. So, remember, if you are suddenly presented with that kind of a chance, time is important; so, get the right information you need.   Some of the benefits of buying a home that’s in the family are benefits with very specific stipulations.  For instance, when the property becomes available for purchase, the deceased’s Will might say:  “A family member has first right of refusal.”

When you are the (or an) inheritor of a relative’s residential property, you have the added advantage of using your share of the property in the negotiation process of the transaction.  If the relative was your parent, there are specific tax exclusion advantages in the “parent to child transfer” – if your actions are procedurally correct!

If you are an individual preparing a will and you would like your property to remain “in the family,” be sure to include such wishes (with the appropriate guidance) in your estate planning process!

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