Advice Wanted - Sell the Lakefront House or Keep it in the Family?
 

I grew up in a house on the north side of the lake (moultonboro) that remains very dear to me. My two brothers and I have long since grown up and moved out but we still visit to enjoy the lake, the surrounding area of mountains and beauty, and so on. We didn't have any other houses - we lived in it year round and my parents continue to do so (which made us the rare year-rounders in our neighborhood of summer homes).

Now my parents are getting older and my father is thinking of selling the house and downsizing to a smaller dwelling closer to a city where he and my mom can live. His reasons for doing so include: downsizing as mentioned, the tough cold winters in NH, his desire to be closer to Boston to take advantage of the cultural and other opportunities of the city. But Most importantly, he wants his 3 children and wife to get the substantial inheritance such a sale would offer - he spent something like 20+ years paying off the mortgage and the last time the house/property was appraised (years ago now) its value was around $700,000, so now it's probably (we hope) substantially more. It's his biggest asset by far and I am not positive how much the inheritance would be if the house is not sold. It's a 2 story on about 2 acres.

However, we can't get rid of the nagging feeling that despite the benefits that would accrue to us, we could be missing out on a treasure if we "lose" this house by selling it. This is our favorite place in the world (not the house structure itself necessarily - just its precise location on the lake (it's a lake + mountain view facing due west) and the access to the surrounding area). I like the idea of having it as a place our families can enjoy whenever we want in the years to come - but we also understand the value of an inheritance like this and the needs of my father and mother who have different considerations from mine and who after all still live in the house year round (I am only there perhaps 6 weeks out of the year now). The winters do get tough as mentioned, and the house structure and dock have not been renovated in many years - it's in fairly poor shape actually and the new owners will have to do a lot of renovation work, though it's still livable as is. One thing to note is that we don't actually use a boat anymore ever since my father sold his so we're not as avid users of the lake itself as we used to be. Water depth is decent but water quality is 'mucky' and not great. The view faces due west and you get fantastic sunsets over a mountain.

We're just worried that if the house is sold, we'll regret it and will feel grief over losing the gem we could have kept.

One option - the neighbor's house has been in his family for a few generations now (so they at least chose to go the route of keeping the house rather than selling it) – and they rent it out - so perhaps my brothers and I could rent that house for a week or two at a time each year if our house gets sold? Though of course we wouldn't have that nice feeling of permanence (how long will the neighbors be renting out their place for after all?) and *ownership* that you get from being able to call your house your own.

Any thoughts or advice from this community would be very much appreciated! I understand that this may not be the right place for such a post – and ultimately it's a personal decision on our part – but I figured I'd reach out to other Winnipesaukee people to get their takes - thanks for reading.

Can you and your brothers convince your dad move and to keep the house and you guys carry the yearly taxes and upkeep for him, assuming you can swing it.

If so why sell unless your Dad needs the money to make the move to MA, in which case your assumed inheritance will get eaten up in the new house.

Would you rather inherit cash or an asset?

Ultimately it is your Dads decision to make, its his house.



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Now is a great time to sell. I would at least get an appraisal and then decide.
If it's a big windfall then he could afford to give his children some money now and they could go buy their own vacation homes.

Thank you - we were thinking some benefits of cash inheritance over asset are that we're not sure how often we'd be using this house if they move away and if it would be worth it to deal with renting and upkeep and all that if we're only going to be here 6 weeks out of the year

Also cash/$$ inheritance would help us pay for kids' education - our own housing situations away from the lake - and so on - benefits we would not receive if the house isn't sold

Yes this thought has crossed our minds as well - it's tough b/c there's a lot of nostalgic value in a house you grow up on and you think about having your kids and grandkids and friends etc enjoying that house if it stays in the family - I've always dreamed of having a house on Winnipesaukee as a second home if I ever earn enough money to do so – and I'd love for that house to be this one - but given how prices for Winni houses now are through the roof I'm not sure if I will ever seriously be able to afford one unless I do very well in life (I'm still fairly young) - so that's why there's that feeling of losing something very special that you can't get back again

We have known others who sold under similar situations and REALLY regretted it after the fact. My advice...hold it forever. If you sell, it is unlikely you will afford to rebuy at some future point. If the house is a second home for your father, he will be faced with capital gains tax on the sale....could eat into whatever inheritance you might expect. Stop worrying about inheritance $$$'s...you cannot put a value on the memories you will loose forever. As others suggested, help by paying the taxes and ongoing maintenance. Your dad will be very appreciative that you are preserving this place because of all the favorable memories. Just think how your kids/grandkids will have the same experiences. Selling, unless these is a desperate need for the money, makes for a bad experience. HOLD IT !!

Sell it.

Here’s why:

It is heart breaking for parents to see there kids have a poor relationship with each other.

The potential for that is high because each of you will need to start paying for real estate tax, insurance, utilities and maintenance.

Splitting that equally will still cause trouble because each sibling will value the use of the house differently.

The one that uses it most will be looked upon to pay more.

The one that uses it least will wish to sell.

All this assumes that no extraordinary financial factors come about for the house or siblings that own it.

There goes the relationship!

To everything a season.

Sell it now.

We ran into this issue with a camp my inlaws had. When they passed there were disagreements between the 5 siblings. 3 wanted to sell, 2 wanted to keep it. In the end one sibling bought out the other 4. Now they all have their own second homes.

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We just went through that. Hardest thing we ever went through.

After we sold it, we now regret it, so much so we bought another place.

But it was not our full time home.

If you do want to sell, now is good time. But that's exactly what messed us up. We sold for the wrong reasons.

I know it's difficult for some to control but never make important decisions based on your emotions, esp large financial ones.

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may I ask what those wrong reasons were?

Yes, I think I wouldn't rush. Why can't you take your time? Spend a year or two using it together and see how it works. If it doesn't you can always sell it later.

I've learned that once something beautiful is gone, it's gone... That doesn't mean you shouldn't sell, but it sounds like a lot more thought and planning needs to happen before doing so.

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I know this is a very emotional issue for all involved, but before spinning your wheels too much then why not sit down first with a financial advisor to show the cause/effects on each person involved if the premises were kept versus if it is was sold?

Looking at it from this perspective could be a slam dunk for keeping it within the family versus selling it (or vice versa).

Just a thought.......

When COVID hit we saw properties selling like crazy down in MA, in the burbs. We fled MA to hideout at our place in NH. We asked a realtor how things were doing and they said extremely good (this was in March). We had always thought about "upgrading" or combining our home in MA and NH for one that would be easier in Winter and lower in total taxes. But we never moved on it. The COVID "bubble" was our excuse to move on it. The realtor also gave us an estimate of selling price which was $300K over what I ever expected to get.

We were so busy prepping the place for sale we didn't stop to think about what we were doing. The next thing you know it's sold. All I saw was $$$. And it was not until we started packing we thought, what did we just do? The closer and closer the day came that we had to move out we wear in tears every day !!

The taxes were extremely high and houses literally 3 houses over of the same value were paying half the taxes (different town). I always felt like we never owned it, but rented it, so it wouldn't be very hard to stop "renting it". It was $1300/mo. And we probably only used it in total 3 months a year. So that's like $5000/mo. But I'd pay that tax in heart beat now. We did own it and I see the owner enjoying all the work I put into it.

The good news is the new owners appreciate it for what it is and are already buddy buddy with the great neighbors we had. But if we could turn back the clock there is no doubt in our minds it would be with us until we are both in our graves.

Some things to consider...
 

First, despite what you and/or your brothers might want, if your parents' name is on the deed, it is ultimately their decision. You can certainly try to influence their decision, but ultimately it's their call. I would also highly recommend that your parents consult an estate planning attorney, in the event they do not have one already. (Not a real estate atty who does wills on the side, but a true estate planning atty who is knowledgeable of trusts and estates). If your parents chose to keep the home for your and your siblings benefit, ownership could be transferred either while they are alive or after they are deceased. If they choose to sell the home and intend to pass on the remaining cash to the kids after they are gone, the estate atty can also help that happen via trusts, without things going to probate and being contested.

Just making the assumption that selling the house now will result in a pile of cash inheritance later is a bad assumption, unless it is handled properly via trusts. Example: parents sell the house and have the cash. Mom dies and dad remarries and decides to leave everything to the new wife. You and your brothers are SOL. Or, Dad dies without a will and the new wife fights you and your brothers for his $$.

If your family dynamic is such that you and your brothers and Mom and Dad can sit down and have an open honest discussion about what to do with the lake house, I would highly encourage you to do so, and then whatever the decision is, have an estate/trust atty write it up

Wow - and have you thought about maybe doing a vacation rental near the same spot so that you can enjoy the area still (though without owning anymore obviously)? That's what we have been talking about

This has to be one of the hardest decisions a retired couple must make because of all the ramifications involved. We have heard horror stories of family members really going at it because of disagreements as to how the inherited property can be used, how to split usage, renting it out vs. using it, how to deal with expenses such as property taxes, repairs, etc, etc.....the list of conflicts can be endless....and make no mistake about it: when it comes to $$$, it can get really ugly. In a perfect world, we would leave our waterfront property to our daughter and son and family, with everything in good working order, including all the furniture, furnishings, water toys, even the stacks of games we have enjoyed on the porch year after year. That would be a perfect solution (for us). Would there be arguments and disagreements? Guaranteed. However, if we are no longer here, its not our problem, so hopefully they would work it out. It’s definitely a dilemma.

I think it makes perfect sense to help them sort it out. The parents are doing what they think is best for their children. If the children value the property more than the $$$ don't you think they should speak up and say no dad please don't give it up. They might need to sort out how they get them out of the hard winter if they decide to keep it. But I think it's smart to be involved and ask for options here.

My gut response is help them find a place in Florida for winters. It's not exactly pleasant in Winters near Boston either ;) Sometimes it can be worse than NH. Lot's of ice storms and Nor'easters might hit MA and miss NH. NH often gets the nice fluffy snow ;) Many winters we had more snow in MA than NH.

Wow, there is so much good advice here, and as you can see, there is no easy or right answer. I recently went through this with our family and VERY long story short, we kept it in the family. I have 2 siblings: one had no interest, and one loves the cottage as much as I do, but could not afford it. So when my parents passed, my husband and I bought out my siblings with the intention of keeping it as a family home. (Also, I had been planning financially for this for many years). We pay for everything, my sister and her husband pitch in with "sweat equity" as much as they can (which we appreciate). We all enjoy being there together, and has really worked out well. I will just say this: not all decisions are financial decisions. But also, do not underestimate how much deferred maintenance on an older place will cost. It never ends! But it was inconceivable for me to give up our place, and I knew that once it was gone, there would never be a way to come close to replacing it. Best of luck to you with this tough decision.

Let him sell it.

It's what your dad wants, and hey, you can't ever have too much money.

You no longer spend a lot of time there and probably wouldn't in the future, so it might later seem to be a money pit, an albatross around your neck.

Rent a place on those rare occasions when you need a lake fix.

Next genertion?
 

Many good insights here. What I don't see is any consideration of grandchildren or great grandchildren. My father asked everybody about keeping the camp. His children and grandchildren, noting that at that point, one grandchild was only 6. But he had seen and we have seen many many families sell and only a few years later regretting that they didn't make every effort to keep the place until the next generation could afford it. We can all think of good money management plans that will make it possible to afford the place, especially since there is no mortgage.
Some history, as just one example.
In 1986, we established a realty trust with 5 shareholders. Three of them were grandchildren, to under 18. There was no money in the trust, but Dad paid the taxes and the rest was DIY. In 1991, he and my mother did some more estate planning, again establishing unfunded trusts for future needs. While they were in Florida that winter, they decided to move to a retirement community in NH which we arranged. As they were moving, they established NH residence. Dad died unexpectedly, but as a NH resident, even for only a few days, he and Mom saved a bundle in Massachusetts estate taxes. Over the next 35 years we funded the trusts, having sold the Massachusetts house, and retirement savings for example. Each year everybody involved as heirs got an annual stipend and a little went into the original realty trust. These were "gifts", so no income tax. The kids' money went towards "education", but not necessarily college tuition. Note that if you have large sums of money in the wrong name you may not be eligible for some scholarships or other tuition aid. Two of the original five shareholders didn't have a lot of interest in camp, but no problem, since nobody was asking them for money. My sister gave her shares to her granddaughter, moving things along to the next generation. Just a simple letter of transfer.
I know that was somewhat lengthy, but the point is, if you can see how it works, you may see how something might work for your family.
Key points:
Estate planning is very important
Establishing residence in Boston, MA can be hazardous to your financial
health
Regardless of where you live, a NH Trust does not pay NH Interest and
Dividends tax
Taking money in large lumps almost always incurs large taxes, at higher tax
rates

Aside: Spending 6 weeks at camp is a dream for thousands of folks who only get to do weekends. College tuition saving is way overrated. Your kids will go to college one way or another. They may never again have a place on Lake Wiinipesaukee.

We rented before we initially bought in 1986. My wife's parents rented her entire life (that is what introduced me to the lake life). Her dad always wanted to buy something but her mom refused, she was always worried about the burden of the extra work and cost of owning. They both loved the lake and were thrilled when we bought a place and visited often. They are both passed now.

After owning for 34 years I don't think we could go back to renting. It's not the same. We would go year round and cross country ski on the lake. We'd even go up for one day sometimes. We definitely would take all our vacation time in the summer though.

We did consider buying something just off the lake and getting/ renting a slip. But I know us, it would be too much "work" to go play. It needs to ready on short notice.

Honey, it's 7:30 let's go on the Hobie Kayak for the sunset. Even that took 20 minutes to get ready and sometimes we'd skip. My wife never liked being rushed. But I was happy with 20 minutes.

By the way you could rent the property out part of the time to help things financially. I personally never wanted to deal with renting. But I would/will if that meant the different of keeping it.

You love the lake. Don't give it up for mere money

Whether the OP loves the lake is irrelevant.

It is not his property, it is his parents, and up to them to decide the issue.

His post leads me to suspect that in order for his parents to afford to relocate they must sell the lake property.

I for one would never want to live on the lake in my dotage, due to lousy health care in the area, sparse shopping choices and yes, boredom: I doubt dad snowmobiles or skis anymore.

It is unfair to one's parents to "guilt trip" them into hanging onto an old property when they'd rather move to a new location which would afford them a better quality of life.

The place I bought 7 years ago was in the sellers family for 60 years. Common story of home being passed down and a group of siblings with different financial situations and different interest in lake. Some lived nearby and used a lot, others moved away and did not use much if at all. I have become friendly with the ones who treasured it and they are regular renters. I give them a good rate and I enjoy having them back as I know how much they treasure it. Neighbors house was same situation going back 60 years and it just sold. Hopefully I will be long gone when it comes to that for my place so I won't have to see it go.

This is interesting as this is the scenario that would be great for us if my folks sell the house - we'd love to be able to rent the place moving forward - may I ask if you set up a deal in the contract when you bought the place off them that ensured they'd be able to stay each year as renters? And is it ever annoying for you when you want to go up to your house and can't because they are there (not sure if you rent it out to others as well)? And also if you don't mind me asking - how much of a discount do you give them? Thank you

Now switching my view to 8gv's. You start with this and are injecting new complexity in the sale and your relationships. Some siblings will want to sell to whomever offers an acceptable price first. Many buyers have zero interest in renting. Keep in mind that the buyer is dropping a large chunk of change on an indulgence. Chances are excellent that he does not need/want renters.

it is not an expense...
 

I know there are taxes, maintenance, utilities, etc. in owning. But owning also gives you some upside potential in appreciation. Today, real estate in this area is probably the highest it's been...Maybe even prior to 2008 values. Look what's happened in the last three years.

The money to purchase is not GONE. It's just changed form.

I bought my family's home from my 4 siblings. We owned it for over 60 years and encountered all the sibling issues describe herein.

My permanent home is in San Francisco, 3,200 miles away making logistics for visiting complicated. I have used Bayside Rentals to rent it for part of the summer ...Pretty much pays for all of my expenses and I get to spend spring and fall there and close it for the winter. Never had one problem caused by the renters.

You can also factor in the paper loss of depreciation into whatever your income tax situation is. And almost everything you buy is tax deductible as an expense for operations.

Although you're limited to two weeks for personal use, there is no limit for maintenance stays.

Good information
 

Thanks for this post....it should be helpful to those pondering holding on to a property vs. selling. I would like to add a comment to castle breakfast, however....it’s probably a bad idea to clutter up a sales contract with language ensuring future rental rights. Most buyers are likely to reject such restrictions on their own usage.

I heard a situation like this one one of the call in radio shows, dave ramsey maybe. anyway, the siblings could not all agree to anything so they formed some sort of trust to own the place and hired a management company to rent it and the siblings had to go thru the agency to book time and paid rent like everyone else. the rental income was split between all of them. seemed like a pretty good hands off approach.

2 cents

This is an hard issue to deal with, mostly because it is more based in emotion in most cases. When my parents bought our camp, I knew the long term prognosis was that eventually, I will have to buy my siblings out to maintain the property.
So with that I had to also come to realization, that until such time as I can by my siblings out, I may have to pay more the costs for maintaining the place.

I have made peace with those realizations. Because I know that if we sell the property on Lake Winnipesaukee, I will never buy on the lake again. Not necessarily because I wouldn't be able to financially afford to.... But because the lake has changed so much, that I would want to move on to a new lake, that had the atmosphere Winnipesaukee used to have.

Don't get me wrong Winnipesaukee is a beautiful lake and always will be... But it has become over grown, with huge houses, and manicured lawns... This is simply not my idea of getting away from it all. My yard is sand, my camp is small, and I have trees that I don't take down unless I have too.... I can find plenty of lakes where I am not the only one that thinks like that.

So why am I rambling like this, well its a message, If you keep the camp understand why you are doing and what the costs might be... I know what my costs are to keep my families current camp, and am at piece with it... If my siblings and I ever decide to sell, I have rationalized through that situation as well.

Will I be disappointed if eventually we need to sell yes, but on the flipside, I also know what plan B is, and that is just as exciting finding a new lake to get to know....

sell
 

Sell now. Who knows when the market in M-Boro will be like this ever again. What was 700k years ago is probably double in todays market. Look at what's selling there for > 1m, it's nuts.

$ aside - 3 siblings should NEVER share ownership of a high dollar value asset.
Even if protected in a trust (which it would have to be unless you're insane) you will end up in a bad situation. It ends that way far more often than that (just read the responses above).

Noone wants to give up the childhood home, but strange how much more it suddenly means when you know if might be sold.....

You would be very hard pressed to get a new owner to agree to a long term rental clause in the sale agreement. When my parents bought our property, we had a handshake agreement with them that, we would rent to them if we rented the property but nothing was documented. And we followed through with that promise after we spent time renovating the property. The finding was interesting. Although they where all excited to come back, when they did they found that it wasn't the same. It was no longer their family camp, it was ours. We made changes, and did renovations and it changed the place. They where all very grateful for the opportunity to come back, and wouldn't have changed the experience. They all decided, that the place was in good hands and moving on, to its next phase.... We haven't heard from any of them sense. Once in a while one of the Son's who already had a place on the lake, will ride by slowly in his boat.... but that is really all we ever see of the previous owners....

I agree, as my wise old uncle use to say, "partners are for dancing". I owned one piece of property with a partner and it was a disaster even though he was a great guy I never did it again.
If there are multiple siblings involved it's better to sell and each do their own thing.
I've never been the sentimental type so for me real estate is an investment. I have no problem moving on from one to another. I even enjoy the hunt and enjoy making a new property my own.
I try not to invest more into a place than I would ever get back. That way if I find another place I like better I have no problem selling and moving on.
Of course my wife is much more sentimental and has a harder time with moving on so this keeps me a little more grounded.
As long as I still have my mind I still have my memories no matter what home I'm in. :D

Sell it.

If you like the Lakes Region. Purchase an ordinary house off lake or rent.

Time and time again. I see next generation not agreeing to time and usage. Then the next generation. And on and on.

There was a situation here where two adult daughters inherited a Summer cottage. One had one child. One had five children. Could not agree on maintenance,, taxes, usage, time, etc.

One did not wish to sell and just leave as is. And split the time.

One sister sued the other sister to sell the property. And then that sister bought the property. So much for family unity.

Sit down and agree who gets what.

Next generation ownership rarely works out.

Again, if you wish to stay in the Lakes Region. Just purchase a modest home off lake.

There was no agreement and I would probably not want one. The people I bought from were very nice and it just kind of happened naturally as we met and talked about the property and how it was in the family for years. I use the house plenty so do not mind giving up a week or so here and there. They don't come that often but in my situation I would not mind if they did. Everyones situation is different though. At first I gave them a big break on price but they now insist on paying at least close to market rates. When I do rent I am always happy to take less from someone I know will be a good tenant. At least in my case everyone is happy.

Must be different o the islands. Lots of 4, 5, 6 generations owners. Somehow, we all make it work. For many, it's the one place, after all the others have been sold, that we can all share (multiple) lifetimes of memories and make new ones.

I am living this type of situation now on our family cottage on Upper Suncook Lake. My grandparents purchased and built the cabin back in 1964. They set up a trust and an investment account to help with taxes (which are now extremely high). The trust was set up with their three kids named as the stakeholders, then their kids (7 of us my siblings and cousins) next in line. To dissolve the trust everyone has to agree on what happens.

Unfortunately, all of what people have said about usage, up keep, family feuds is true, contributions towards the investment account, etc. My father passed away early at 53 from cancer which further complicated ownership in the place because now myself and my two siblings are the stakeholders along with my aunt and uncle and everyone wants their own time there. Trying to schedule time to be there is a pain as everyone who is still around and wants to use it wants prime weeks during the summer and the place is not really big enough to accommodate everyone at once. I have tried setting up calendars for us to all schedule a week in on our own over the summer and things like that, but it really hasn't worked.

Financially I couldn't care less about making anything off the place, my three boys really enjoying going there when we can which is what kills me about potentially walking away from it all. The securing time and dealing with everyone involved has made trying to go there stressful, which it shouldn't be.

At the end of the day I have really just tried to put all the BS aside and get up to enjoy the place with my kids when we can. When the money runs out in the fund to help with taxes and maintenance I am not really sure who in the family is left that can afford it (taxes alone are 13k/year) aside from maybe me and one of my cousins who lives local, but doesn't ever utilize the place. I'd imagine at that point it will end up being sold and everyone will get their share of the money and go on their way. At that point I hope to have my own place for use with my family and friends. The whole situation really stinks because my grandparents wanted the place to be enjoyed by many generations down the line and did their best to try and make that happen, but with so many people at so many different places in their lives it is difficult.

I think you nailed the major potential issue in your response: the financial health of the family members.

My parents wanted their camp to go to someone in the family, but we sold it last summer when it became abundantly clear none of my siblings would ever be financially stable enough to take it over long term.

If there's any question on that end, there'd have to be a major trust account of funds to make me not run away.

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The more people involved the harder it is to get everyone to agree on anything. That's why, in most cases it's best to sell and everyone to go their own way.
We try to get everyone together 4th of July week and with 3 kids and 6 grand children that's even a struggle.

Terrific post. We are heading down the same road. Purchased in 66. We are the second generation and had to buy out the other half six years ago. Thinking ahead we would love to leave it too all three kids, but unsure how that will work. They can’t agree on what’s for dinner never mind maintenance required and tax payments. Understand the trust and investment need to pay the bills. But, as you note once the money is gone it will be sold. Difficult decisions all around. My idea is to give it to one child and allow all to enjoy. If the property is too much for one to handle then it should be sold and proceeds split.

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Putting emotion aside, if the deed is in the parents name, inheritance may not be the main issue when selling the real estate.

Selling the property as a married couple will avoid some taxes. If single and have lived in a house for two of the previous five years, you owe no taxes if you make $250,000 or less in profit. For married couples filing jointly, if both of you have lived in the house for two of the previous five years, then the limit is $500,000 in profit; note profit, not sell price.


Gift tax (while living): If the parents sell the property, they, presently, can each give $15,000 annually ($30,000). Amount will probably, periodically, go up as it has been doing. The gift tax is not considered income, to the recipient. No tax to the parents for that amount.

I do not believe NH has an inheritance tax.

Estate tax may not be a factor. An estate tax is a tax on the right to transfer property when you die. The IRS exempts estates of less than $11.4 million from the tax in 2019 and $11.58 million in 2020, so few people actually end up paying it. Plus, that exemption is per person, so a married couple could double it.

A trust could be set up to avoid probate for the disposition of the asset.

If the house is "willed" to all three, especially with a trust, joint ownership of the house may be an option. Any future disposition of the house would be up to the three siblings, presuming they are still all living. Maybe the siblings can accommodate a downsizing, in conjunction with the trust.

These are just some issues that quickly come to mind, and the suggestions to seek professional advice are good suggestions.

Pretty sure that if you leave the place to your kids, then they will pay no tax on the gain that occurred during your lifetime--all the assets get marked up on your death, tax-free (except if there is an estate tax).

Thank you, OP!
 

This is a more than useful thread.

Your original post, clearly/concisely/personally expressed, has struck an obvious chord for many of us.

I, too, am now experiencing similar circumstances. It is a mentally draining process and a familially destructive pill.

As each scenario presents its own problems there is, of course, no one size fits all solution. The thoughts/information being discussed here are immensely interesting and thought provoking.

Geez! :(

Our accountant told us this exact thing yesterday. We sold the parent homestead in March after my dad passed in February, so the "gain" will be calculated in that time, not from when they bought.

That being said, if someone were to have inherited property a couple years ago, there would still be a ton of gains?

Finally, the number we heard in terms of estate tax was $1M. Anything over begins to be taxed.

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It would probably be helpful to provide the name of an experienced attorney who has substantial experience setting up trusts to keep lakefront property in the family.

I guess our family is in the minority for making joint ownership work. Our camp was originally our family homestead, built in 1814, and has been passed down through 7 generations and used only seasonally since 1971. My mom and her siblings are the first generation to own the properties as a group and since they took over in 1997, things have run fairly smoothly.

I think there are several contributing reasons why things have worked. The first being they all genuinely care about the house and its place in our family history for the last 2 centuries.

Another being that before my grandmother gave her kids the house she invested a significant amount of money into it (new siding, windows, roof, foundation work, etc) to make sure that it did not become an immediate burden to her children. Additionally, when my grandmother passed a few years later, some money was put aside to help with expenses.

When the siblings took over, an extensive list of rules was put in place to define everything from how you schedule your time at the lake to what is turned off or left on when you leave. This has been very helpful to reduce potential conflict points.

I think the most difficult decision was how to fund operations. The siblings worked through many different scenarios, and ultimately decided that they would set a budget for the upcoming year and everyone would be assessed to same dues, regardless of their usage. They also decided that renting it out would not be an option to raise funds.

I think the rule that creates the most tension is that the "cousins generation" (spanning in age from 31-53) is not allowed to occupy the camp overnight without an owner present. 20 years ago this was rooted more in nobody wanting their children/nieces/nephews having huge parties at the lake, these days it has more to do with the owners being retired and each wanting as much time as they can have at the lake and don't want to be competing for scheduling with the next generation. For our branch, this isn't an issue as we enjoy being their with my parents for our vacation weeks and weekends - we are also close with our Aunts and Uncles and get invitations to join them regularly. My feeling is they pay the bills they should get first dibs for use.

One sibling (my mom) is the manager and collects all of the dues, pays the bills, schedules and coordinates maintenance, and keeps the master calendar.

I do think there will be some issues when it comes to deciding who it gets left to in the next generation. But, not everyone has an interest in the house/lake or the means to support it. Thankfully I have never heard anyone, in either generation, talk about camp as a financial asset, in fact, one sibling who didn't use the property signed off and gave his siblings his portion.

There have certainly been squabbles and bumps along the way, but, so far they have been able to work it out.

Joey may want to double check my answers here:

The house should be valued at time of death, so gains the past two years would be taxed. But I would guess there is a fair bit of judgement involved about when the gains occurred, so you can probably argue the lion's share occurred earlier.

Some states have inheritance taxes (I don't know which ones, but I don't think the list includes Mass), but a married couple can transfer $23MM or so to their kids, tax free from the Feds.

From mass.gov......

If you're responsible for the estate of someone who died, you may need to file an estate tax return. If the estate is worth less than $1,000,000, you don't need to file a return or pay an estate tax. Massachusetts estate tax returns are required if the gross estate, plus adjusted taxable gifts, computed using the Internal Revenue Code in effect on December 31, 2000, exceeds $1,000,000.

Sad that if you live in Mass. you have to pay an estate tax on property in NH. Because their is no estate tax (state) in NH if it is passed on to children. If it is passed on to others NH does have an estate tax.

I don't believe NH has an inheritance tax however I do believe that in the case of ownership change even within the same family it may be subject to the NH real-estate transfer tax unless there is some way to skirt that. Can you add an additional owner on the fly at any time and not trigger this?

Mass doesn't distinguish if assets of the "estate" are within the borders on MA or not. My guess is if you are a resident it doesn't matter. They have no problem assessing income tax on income not earned in MA so why would and inheritance be looked at any different?

NH doesn't have an inheritance tax IF you leave it to your children. If you leave it to other relatives or friends, it is taxed. I don't believe there is a real estate transfer tax for children either.

Please check the laws...my reading is that NH does not have an estate or inheritance tax now. But one can aways be introduced as it is up to the legislature. If you are a MA resident, they tax ALL your assets regardless of state, except they do give you a dollar credit for any estate taxes you pay to another state. So being a resident of MA would certainly bring any NH property into the estate tax calculation, including any other assets in NH or elsewhere. Makes little sense to be a MA resident.... MA is one of the few states with an estate tax now. Please note..this reply is not tax or legal advice. Seek qualified professionals to guide you.

Anyone residing in a high tax state, but having a second residence in NH, should consider making NH their principal residence when their circumstances permit the transition. In our case, the state tax savings by transitioning our principal residence to NH after I retired more than offset the carrying costs of our NH home. We kept our other state residence as a vacation home for Winter and family visits with our kids and grandchildren who still live there. To make it work from a tax perspective, we spend more time in NH than in our other state and use healthcare and other professionals mostly located in NH, which are among the factors analyzed by the tax authorities in our other state. Of course, you should check the tax laws of your own state to determine what you need to do for a successful transition. To bring this back on topic, the potential tax savings from a transition to NH residency at some point might facilitate one or more in the next generation to take over ownership of our NH lake home, which we love and hope will be available to future generations.

Tough call
 

Property been in the family since 1892. Prime view of the Broads. Welch, Long, Sandy, Cow and Diamond Island. The Ossipees and Mt Washington. I can see sunny side of WV glistening with snow late season.

Countless memorable family vacations/reunions and weekends made it difficult to comprehend. 'On Golden Pond' style cottages are becoming non existance. Daily sight of the Mt Washington was our way of keeping time. Being on the Southern end of the lake, the huge trees kept the sun from roasting the cottage.

It was tough decision to sell. Situated on a fairly steep slope, Dad had a difficult time climbing stairs. Because of 'view tax' regulation, property tax nearly six-folded.

With 3 kids heading off to college, I couldn't afford to take over so we sold it in 1998. The money was used to buy a condo on Winnisquam, less maintenance, flat landscape, great view so my dad can enjoy his last days.

We didn't regret the move, but we miss the spot! Current owner built a Macmansion and completely ruin a beautiful campy atmosphere.

Still have the Winnisquam property and enjoying the peace and quiet the Winnipesaukee now lacks. It's all about timing, moving forward. You will miss but won't regret.

Tough call
 

Property been in the family since 1892. Prime view of the Broads. Welch, Long, Sandy, Cow and Diamond Island. The Ossipees and Mt Washington. I can see sunny side of WV glistening with snow late season.

Countless memorable family vacations/reunions and weekends made it difficult to comprehend. 'On Golden Pond' style cottages are becoming non existance. Daily sight of the Mt Washington was our way of keeping time. Being on the Southern end of the lake, the huge trees kept the sun from roasting the cottage.

It was tough decision to sell. Situated on a fairly steep slope, Dad had a difficult time climbing stairs. Because of 'view tax' regulation, property tax nearly six-folded.

With 3 kids heading off to college, I couldn't afford to take over so we sold it in 1998. The money was used to buy a condo on Winnisquam, less maintenance, flat landscape, great view so my dad can enjoy his last days.

We didn't regret the move, but we miss the spot! Current owner built a Macmansion and completely ruin a beautiful campy atmosphere.

Still have the Winnisquam property and enjoying the peace and quiet the Winnipesaukee now lacks. It's all about timing, moving forward. You will miss but won't regret.

Put the property in a trust fund. Transfer within the trust fund. When you die the trust fund 'transfers' to the trustees avoiding all tax liens.

Seek professional help
 

If you are considering a transfer find a lawyer who specializes in this. Gifting is complex and could have future ramifications. A life estate could mean financial surprises years from now if your parents go into long term care and you suddenly need to pay for it because of a parent's ownership interest.

It seems the NH inheritance tax for other than children was repealed. I guess I had forgotten that.

Same date as Broadhopper, 1892, but luckily we still occupy our Center Harbor bay lake cottage. As we are several generations from our founder we of course have increased the number of owners. However, my parents’ generation made the excellent decision to establish a trust and lockin the number of voting shares. This has allowed us to make decisions on expenditures for upgrades and repairs without having to deal with a myriad of opinions. Memories can be too fleeting so we have documented in diaries, photo albums, and genealogical charts each generations fondest times, greatest challenges, and even our slack time sitting on the front porch watching sunsets.

Hope this helps in your decision.

You are clearly blessed with a wonderful family and the fact that this has extended through so many generations for over two hundred years is hard to comprehend. Great story.

I'm one of three siblings who inherited family camp after parents passed. It's been 11 years and we have shared it quite amicably. Two of us use it all summer and one might spend a weekend now and then, so we split the taxes, insurance and any MAJOR repairs (new roof, new septic) 3 ways. The day-to-day stuff are shared by the two of us who do use it. And while this isn't in anything written/legal, our parents asked us before they died to plan for an eventuality of one or two wanting to sell and one or two wanting to keep. They had us promise (verbally) that there would be two appraisals completed, and averaged to one price. The the buyer(s) would be able to buy out the seller(s) at half of that price. So it depends on your relationship with your brothers, I guess. We are very fortunate to have the property still in the family; none of us would ever be able to afford to buy. I'd keep it.

Our family had the same place for nearly 70 years in Tuftonboro, and we were forced to sell when one of the second-gen owners demanded to be bought out. At the time (2012), I had 3 kids in college, and my brother is a school teacher. So coughing up half the price of a place with 200 feet of shoreline, a boathouse, and 3+ acres was out of the question.

So it sold.

I could see this coming, and although it didn't lessen the pain, it helped me put it in perspective. My four kids, who, like me, grew up there and always considered it a constant, were devastated. Personally, I still grieve the loss. And I know it was a contributing factor in my dad's demise. He'd been there all his life. It was central to his being.

Fast-forward, and after a few years of renting here and there, camping, and learning how very different life on the Lake can be without owned waterfront, or a boat, we've found a wonderful spot that we rent for 2-3 weeks between July and September. The pros: we don't pay the taxes, don't need to do the maintenance, and don't lie awake in January wondering if that big old oak tree is going to smash the main beam of the house during an ice storm. The cons: no guaranteed home base. The loss of the family gathering spot. Sunsets on the dock. Scheduling the annual "opening up" long weekend in early May, and the closing in the fall. The tenuous nature of renting...not knowing if the new place you've grown to love will be sold, developed, etc. The heartache of knowing that my kids' kids will not know the same privilege (that I think we often took for granted).

One other "pro" -- and a big one, which was not foreseen: Proceeds from the sale enabled my mother to spend her final few years in the continuing care/assisted living facility that she *wanted* to be in. It was very nice and afforded a quality of life that just wouldn't have been possible without those funds.

So...personal experience says keep it all costs. The practical side says you never know what the future holds, and sometime those tough choices just can't be avoided.

But we're still here, and always will be!!

Good luck.

Grant, that is a very moving post. You have painted both sides of the canvas , and presented pros and cons of the issue in a compelling way. As the “seniors” in this dilemma, we are hoping our two heirs will be fair when decision time comes for keeping the place here on the lake or selling it. We would love to see the memories live on for generations, as so many here on the forum have described.

Don't sell
 

Speaking from experience, don't ever sell.
You'll regret it for the rest of your life...

The failure in most of these posts is looking at only the next generation. The successful pass downs have dealt with giving it to grand children and a generation after that. The stories related to parents and the kids are stories of people who waited too long to make plans.

Oldsters who want to do something for their kids are reacting to old age. Oldsters who want to do something for grandchildren and those unborn, are planning.

As noted earlier, it took us 30-40 years to get the plan (financially) in place. It isn't just sitting down with a lawyer and signing the papers.

I’m definitely in the regret we sold camp. And rebuying hoping we’ll heal.

But a couple things that confuse me are. Are we emotionally attached to the property / lake / location or the memories themselves?

I feel like we are acknowledging and reviewing the memories when we sold it. Memories we can relive.

We get choked up when we sold our 20 year old rusted out Jeep and replacing it with a shiny new one. My daughter grew up having that Jeep and we went hiking with it and it got us to the lake and back reliably year after year. Clearly the new Jeep will be better, safer etc. than the old one. But we are still sad.

Should we have kept the old one forever? Isn’t it the same thing?

To everything a season.

When I jump into the water at my current place, I relive the memories of other lakes and waterfronts from my childhood. So as long as you love your Squam house, I think it will remind you of your last house.

My only comparison would be when my parents sold my childhood home. Of course I had moved out long ago and had my own house but it really hit hard, for about a month. Then it was all new again helping my parents move into a new house and it no longer mattered much. It was just a place. I drive by once in a while but friends told me the inside was all remodeled and I have never had any desire to go inside again.

But, having said all that the financial consideration of being able to buy back in at the lake would be my main reason for keeping it if you can swing it. Which is a point already made above.

I'm back in the same house I grew up in 66 years ago in Ma. I have fond memories of growing up in this house but those will always be with me. The area has changed and I'm done with the house. I want to move on but my wife has trouble letting go even though she didn't grow up here.
She just has trouble with change in general where I just feel every new home is a chance to start fresh even now at 66.
I embrace change where my wife dreads it. So moving is an emotional process for her.
I'm on my 3rd lake house on 3 different lakes and although I have fond memories of the first two I love the one I have now.
Everyone is different so you have to take that into consideration when there are multiple siblings involved.

I think one of the hardest parts of a home change (vacation or primary) is letting go of old friends and making new friends, especially as you get older. It takes some work.
And with COVID it can slow that process down.

Just think of it as adding more friends. You're not that far away from your old friends that you can't get together.

This was published in NH magazine back in January. We moved to N.H. from NY in February. Brings a tear to my eye when I read it.

https://www.nhmagazine.com/home-no-more/