#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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