Sharing a lakehouse

[This'nThat]

Originally Posted by winterh

Was wondering if anyone had any experience in splitting a home and the use of it with someone they know.

If you are asking Forum members advice on whether this will work or not, you are probably not yet prepared for the answer.

[dpg]

If one of the owners kids goes up with friends and have a dumb-ass party and something happens who pays for it? Does that come out of the general maintenance fund or that family directly? Haven't been in the situation just can see some hostility there also. Oh personally I'd stay away from that set up...Just me.

[Winnisquamguy]

Originally Posted by dpg
If that rider got in an accident that morning would insurance pay out?

Originally Posted by dpg

If one of the owners kids goes up with friends and have a dumb-ass party and something happens who pays for it? Does that come out of the general maintenance fund or that family directly? Haven't been in the situation just can see some hostility there also.

What's up with you and all these insurance questions? Do you have some ideas running through your head?

[dpg]

Originally Posted by Winnisquamguy

What's up with you and all these insurance questions? Do you have some ideas running through your head?

No just curious that's all. Kind of like the discussions here in the past about cars through the lake. Thought I read (here) a car is not covered but a truck/SUV would be cause their the type vehicle "expected" to be used in that manner, or something like that. You don't "expect" to see a bike coming down the street in December,,,,

[ApS]

Originally Posted by This'nThat

If you are asking Forum members advice on whether this will work or not, you are probably not yet prepared for the answer.

I just stumbled on this:

Jointly Owned Assets

The IRS can legally seize property owned jointly by a tax debtor and a person who doesn’t owe anything. But the nondebtor must be compensated by the IRS, meaning that the co-owner must be paid out of the proceeds of any sale.

If, however, you owe taxes and add a co-owner to a piece of property—without that person paying you fair consideration for the property—the IRS can ignore the interest of the other person. In law, this is called a fraudulent transfer or conveyance.

Example:

Rudolph owns a vacant lot worth $25,000. He sells a one-half interest in it to his sister, Wilma, for $10. The IRS could seize the lot and sell it to pay off Rudoph’s taxes, ignoring Wilma’s ownership because she did not pay a fair price. Wilma might get her $10 back, though.
http://taxattorneydaily.com/topics/c...y-owned-assets

(Also, that attornies aren't likely to take cases involving such seizures by The Government).

[jeffk]

I think that, as pointed out, it depends on the people involved. But given that, there are still bound to be differences. For example, you agree to split maintenance. OK, the house needs painting/staining. Do you all come together for a 3 day staining weekend? Or hire a bunch of college kids to slap it on? Or hire a good local painter? The "cost" can vary significantly and so can the opinions about the way to go about it. If you are dealing with a family member it becomes not only a battle about the issue but strains the family as well.

What happens if one or the other runs into financial trouble. Find another partner (usually one not as easy to get along with but who has the money) or sell. Your partners troubles become your troubles. What happens if they don't tell you until the day before the taxes are due that they don't have the cash? Big panic! Your life is mixed in with theirs.

I'm sure there are some such arrangements that work well, where the family is mellow and respectful of each other (not most families by my experience) but more likely to see problems than not. Better not become too attached to the arrangement and ready to dump for a loss if need be.

My sister got into renting apartments for a while and some tenants were good and others were a nightmare. She got out of it. I think partnerships are the same and you can't tell the good from the bad up front.

[dpg]

Wife currently has brothers and sisters not speaking to each other over a home in Vermont.

[Bigstan]

At the least research and come up with a figure that represents at least 1 years worth of expenses (taxes, upkeep, fuel, registrations, mortgage, utilities - become inventive). Inflate that number by 1-200% so you have some emergency buffer to cover emergencies.

Create a trust (pay the lawyer) and place that money into a trust that is to be only used for the property.

Make sure the other party understands this is an ongoing expense, and that they contribute their 50% up front - if they are not willing to put this minimal amount down in the beginning you know they will never do it on a month to month basis, no matter how well intentioned. If they see what they need to pay initially (and what they will be on the hook for) things may change.....

Been there, done that, never ever again.