This is a scenario that you and your family must be aware of, especially if you are the rightful owners of inherited property also known as “heirs’ property”…
Your’re spending time with your siblings at the family property when the phone rings:
“We’re interested in buying your property,” the caller says.
One of your sisters is very interested. The other siblings have mixed feelings, so the family clearly needs to discuss the matter among themselves.
However, that real estate investor is likely to call back again on another day. The investor might actually offer to buy your sister’s share of the property for a few thousand dollars. If she agrees and signs the paperwork, then that investor will become a co-owner of the property along with you and your other siblings. The title might actually appear as if the investor is the true owner of the entire property.
When joint ownership of heirs’ property is divided in this way, it may result in long legal battles with complex issues. Some common claims and procedures in these situations include the following:
RPAPL Article 15
Waiting too long to resolve these issues is not wise. Legal representation is advisable, and prompt action is the best approach to try and salvage the property or its fair market value.
No one wants to feel played for the fool, especially not by a family member. But it is not uncommon for serious disputes to arise among family, especially when money and property are involved.
When seeking legal counsel about an intra-family dispute, it is important to understand the following:
You may have a valid legal claim, but litigation is usually NOT quick or inexpensive. Litigation may not be the best first course of action for your situation.
In New York the civil courts require plaintiffs and defendants to make a good faith effort to settle or resolve issues within a case before it can go to trial. Therefore, settlement or informal mediation is an approach that some attorneys might take to try and resolve a case early on.
In reality some intra-family disputes can be alleviated through conversation. It may not be easy, and it might not be instant, but in some situations it is possible to talk things through to a resolution.
If you are at an impasse with your relative(s) regarding property, estate, or business, the Law Office of Isa Abdur-Rahman, PLLC, is available for an initial consultation about options for your situation.
Collaborating in business is based on trust. However, insisting on a written contract with a collaborator is not a sign of distrust. The contract serves several important purposes for your entrepreneurial venture or real estate investment, such as the following:
Clarifies the financial terms of the collaboration (who contributes what, who gets what).
Specifies the duties/obligations of each party (who does what).
Manages expectations (what are the benchmarks, timelines and deadlines).
Contracts for collaboration might take the form of a joint venture agreement, LLC operating agreement, independent contractor agreement or other forms. The more detail is included within your agreement, then the more clarity you and your partner(s) will have to execute the vision successfully.
More families are implementing “legacy transactions” to accomplish their quality-of-life objectives. A legacy transaction is the sale or transfer of an asset to a younger member of the family, whether outright or in trust.
A legacy transaction may be useful for a variety of purposes, including the following:
An older family member downsizing from a larger home to a smaller condo or co-op
A younger family member purchasing a first home
Leveraging a property to get cash for retirement using a forward mortgage instead of reverse mortgage
Transferring assets for Medicaid planning purposes
Depending on the market conditions and the family’s objectives, “keeping it in the family” with a legacy transaction may be more advantageous than an institutional product or a brokered transaction.
The “family office” generally refers to financial professionals whose work is dedicated to one or just a few very wealthy families. The idea is that the wealth of these families is so massive that it warrants an entire financial firm dedicated only to them.
Most families do not fit into this category, but the wealth of any family is of the utmost importance to that family. Therefore, every family should have at least two components in place to make sure their financial health is kept priority: (1) access to good advisors, and (2) the habit of talking as a family about financial matters.
These two components will empower any family to steadily improve its financial position over time, accomplishing such goals as real estate purchases, business start-ups, and generational legacies.
It’s great that we have Facebook, WhatsApp and various social media tools to keep in touch with friends and family. However, the legal system has not yet evolved to allow every matter to be handled online. Knowing your family members’ physical addresses is vital to certain important legal matters, such as probate of a Will or conveyance of property via intestacy.
It may be wise to have at least one family member designated as the “registrar” of family information — at least one registrar for each group of siblings. The registrar can keep written record of names, residence addresses, phone numbers, email addresses, etc.; and that information may even be stored in the cloud.
Ideally, there should not come a situation where one sibling has gone off on his or her own for one reason or another, and no one knows how to get in to contact with him or her.
Our elders are the crown of the family. While they are healthy we often feel reluctant to ask our elders if their business affairs are in order, because in a way we feel that it dishonors them.
Looking at it a different way, the younger generation and the older generation honor each other by tending to business matters. The most basic item to put in place is a Durable Power-of-Attorney. This document will authorize one or more “agents” (usually family members) to act on behalf of a “principal” (usually an elder family member).
A power-of-attorney can take effect immediately once it is signed and notarized, or it can be written to spring into effect at a later date or only upon the occurrence of a specific event or situation, such as a certain medical diagnosis. The power-of-attorney may be broad or may be limited for use in particular matters, such as banking or real estate transactions.
Housing burden is an important measure of a family’s financial health. Spending too much of their monthly income on rent or mortgage will frustrate a family’s ability to build long-term wealth.
In recent years many families around NYC have spent as much as 50-60% of their monthly income on rent or mortgage, making housing a very burdensome obligation for many New Yorkers. State and local lawmakers have wrestled to address this challenge through affordable housing programs, offering tax incentives to housing developers to keep rents at affordable levels.
The challenge is a complex and ever-evolving one, but it has also created opportunities for real estate investors, home owners, and even first-time home buyers who do their homework. Most important is for each individual and family to pay attention to their own housing burden percentage and to take practical steps to optimize it for long-term wealth building.