HiMy mother passed away recently and the question of what we do with her house will be raised soon.
The house is held in a Trust.
Her property has a current GV is $225,000.
The house has no mortgage against it and is rented for $230 per week.
The property is in a fair state now but will need work on it in the next few years.
I am asking your thoughts on the different ways that we might use the property to help our nieces and nephews in to their own homes. There are 7 of them.
The different ways of dealing with mums house as I see it are...
1/ Sell now and the money is split 4 ways ,I have 3 siblings. Then each of us can contribute what we would like to as each niece or nephew needs our help. Two of us have no kids so will be helping out anyway.
For...Makes money from the house available right now and that would help each of us 4 kids as we all have property's that could do with a bit of money injected in to them.
Against...All though I am sure that us two childless kids will help out the nieces and nephews when the time comes would we be able to help out as much as the other scenarios ?
House is sold and any potential capital gains are lost forever.
2/ Keep the house and as each niece of nephew needs help then the Trust raises a loan against the house that is the given interest free. To be paid back to the trust.
For...Each niece and nephew would be given a good amount to help them into a home and the house would always still be there gaining a bit of capital each year.
Against...The house would need to be maintained and that will cost the Trust.
Possibly difficult paper work involved in running the trust..I am not up to speed on Trusts yet.
Possibility that the niece of nephew default and dose not pay back the loan or loses their house all together.
3/ Keep the house and as each niece or nephew needs help then the Trust raises a loan against the house and that is used to purchase a percentage of that niece or nephews house.This loan is not paid back by the niece or nephew but the Trust then holds a percentage of each property purchased and gets that percentage of any sale that might be made in the future.
For...Each niece and nephew would be given a good amount to help them into a home and the house would always still be there gaining a bit of capital each year.
Against...The house would need to be maintained and that will cost the Trust.
What are the potential pit falls of the above scenarios and are there alternatives that I have not thought about.
Thanks
Richard
The house is held in a Trust.
Her property has a current GV is $225,000.
The house has no mortgage against it and is rented for $230 per week.
The property is in a fair state now but will need work on it in the next few years.
I am asking your thoughts on the different ways that we might use the property to help our nieces and nephews in to their own homes. There are 7 of them.
The different ways of dealing with mums house as I see it are...
1/ Sell now and the money is split 4 ways ,I have 3 siblings. Then each of us can contribute what we would like to as each niece or nephew needs our help. Two of us have no kids so will be helping out anyway.
For...Makes money from the house available right now and that would help each of us 4 kids as we all have property's that could do with a bit of money injected in to them.
Against...All though I am sure that us two childless kids will help out the nieces and nephews when the time comes would we be able to help out as much as the other scenarios ?
House is sold and any potential capital gains are lost forever.
2/ Keep the house and as each niece of nephew needs help then the Trust raises a loan against the house that is the given interest free. To be paid back to the trust.
For...Each niece and nephew would be given a good amount to help them into a home and the house would always still be there gaining a bit of capital each year.
Against...The house would need to be maintained and that will cost the Trust.
Possibly difficult paper work involved in running the trust..I am not up to speed on Trusts yet.
Possibility that the niece of nephew default and dose not pay back the loan or loses their house all together.
3/ Keep the house and as each niece or nephew needs help then the Trust raises a loan against the house and that is used to purchase a percentage of that niece or nephews house.This loan is not paid back by the niece or nephew but the Trust then holds a percentage of each property purchased and gets that percentage of any sale that might be made in the future.
For...Each niece and nephew would be given a good amount to help them into a home and the house would always still be there gaining a bit of capital each year.
Against...The house would need to be maintained and that will cost the Trust.
What are the potential pit falls of the above scenarios and are there alternatives that I have not thought about.
Thanks
Richard
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