Home Selling in Great Falls>Question Details

janderson35, Other/Just Looking in Great Falls, MT

My dad intends to sell a house he inherited to my brother via contract for deed. How can this work in a fair manner for my sister and I?

Asked by janderson35, Great Falls, MT Sat Mar 23, 2013

I have a sister and just want to make sure everything is fair between us three. I see these potential areas of concern:

1) My brother would essentially get a house without having to pay interest on a loan.
2) The value of the house will most likely increase over time. Is the price he pays determined by current market conditions?
3) My parents are not in the best health, and there's a great chance they will pass prior to my brother paying off the house. What happens in this case?

Thanks!

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Answers

8
Janderson,
You're family needs to meet with an estate planning attorney. If your dad doesn't have a will that deals with this, you have a potential disaster on your hands. Creating or amending a will to reflect a change in circumstance is not a morbid thing, but a kind and thoughtful process. Everyone will die someday, and leaving those we love without our intentions is cruel and potentially a financial mess. The State will enforce their intentions on your family’s estate if your parents don't set up the right plans. Get your parents to an attorney as soon as possible, not just for this situation, but for everything.
2 votes Thank Flag Link Sat Mar 23, 2013
Thanks Dan, that is very helpful!
Flag Sat Mar 23, 2013
Always consult an attorney and an accountant when dealing with complicated estate and financial issues. There are several considerations, one is the imputed tax rate for the loan. The IRS has guidelines for this. Another are the consequences for not being current and going into default. These are just a few. We use attorneys to draw up every contract for deed. It is protection for the buyer and the seller. There are several experienced ones in the area and it is well-worth their fee, in my opinion.
0 votes Thank Flag Link Fri Mar 14, 2014
Always consult an attorney and an accountant when dealing with complicated estate and financial issues. There are several considerations, one is the imputed tax rate for the loan. The IRS has guidelines for this. Another are the consequences for not being current and going into default. These are just a few. We use attorneys to draw up every contract for deed. It is protection for the buyer and the seller. There are several experienced ones in the area and it is well-worth their fee, in my opinion.
0 votes Thank Flag Link Fri Mar 14, 2014
There could be a lot of different senerios with this question. The best advise, because we are not attorneys, would be to consult one. We cannot give you legal advise. But, What could happen is your parents could put a provision in there will stating what is to be done with the remainder of the money owed on the house. If they need assisted living and do not have sufficent funds to provide for themselves, the money owed could go for medicade payments, to help pay for their care. Your brother could get a great deal on a house and your parents will be happy they provided one for him. Sometimes in familys not everyone feels they got a fair deal and it is up to the family members to speak there minds. HOWEVER, the sqeaky wheel doesen't always get the grease, they get the dust. Your parents have the right to do whatever they want, these are words you may not like hearing, but it is the truth, talk to an attorney that does estate planning and see what they say. Good Luck
0 votes Thank Flag Link Tue Apr 23, 2013
J, do you know if it was your dad's intent to be fair to the three of you?
0 votes Thank Flag Link Sun Mar 24, 2013
Thank you all for your clarifications!

Mack, yes, it is the intention of my parents to equally share everything.
Flag Sun Mar 24, 2013
1. Who decides what is "fair"? It's your parents' house and they can do as they wish...including paying the mortgage even though son has the deed.
2. Price paid is determined by the agreed upon price between seller and buyer, it can be way under or over the market value, as long as the two parties agree.
3. Whoever owns the deed in the end also owns whatever is attached to it--loans, etc.
0 votes Thank Flag Link Sun Mar 24, 2013
Have to agree with the previous two. An estate planner and attorney needs to be involved. An estate planner will be able to address your concerns in the process. MAKE SURE the contract for deed and will is written by an attorny, not just a handshake.
0 votes Thank Flag Link Sun Mar 24, 2013
There is no law that states "fairness" between siblings.
If I wanted to sell a home, that I owned outright, I can decide the price I sell it for... $5 bucks, $250K or $500K.
Dan is correct. The law firm of Scott, Tokerud & McCarty can help your family with estate planning in GF. Dan Levine is another good source as a real estate attorney.
Good Luck!
0 votes Thank Flag Link Sat Mar 23, 2013
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