Question: My mother sold our family home to my sister for half its market value. My mother will continue to live there in an in law apartment. My sister and her family live in the main house. I feel the sale price is too low. Is this fair?
Answer: Fair to whom?
Fair to your mother? Sure she could have gotten twice the price on the market. But, she would have to buy or rent a new home. Over time, the extra sale proceeds would be used toward this significant cost. Here, your mother is ensured lifetime housing, presumably by reserving a life estate in her deed. If she lives another 20 years, the value of her life estate could easily be $300,000 (vs paying $1,500/month rent & utilities).
Fair to your sister? She got a price break, but, the house comes with a tenant. Remember, your sister will be the primary caretaker of your mother for the rest of her days.
Fair to you? Don’t worry about your inheritance shrinking. Many seniors sell because they need home maintenance support, general companionship, or perhaps the cash flow. Your mother made this deal because she felt it was needed. Trust her and look beyond the reduced sale price.
Do you have more questions about estate planning? Contact Priority Law for a free consultation.
This article was originally published in the Lowell Sun and is for informational purposes only and not to be relied on as legal advice, in any manner.