Failure to Launch? Moving back in with your parents

[lenaitch]

reminds me of the fighting when the family cottage has to be decided upon at death of the parents.

Best option is to have a strong will that is openly discussed with your kids beforehand.

A large and ongoing issue, complicated by the fact that it is usually a seasonal property and subject to full capital gains assessment. Many offspring can't afford to take possession of a cottage that was $10K in 1950 and now $1M because neither they nor the rest of the estate has sufficient cash.

It stalked my wife's family, not upon her parent's death but their advanced age to the point they couldn't use or maintain it anymore. One cottage - five kids, with five different financial capacities and five different visions. It got so bad my wife said 'buy me out' (I'm an in-law and stay out of such matters). We have lost the use of the cottage and she has a toxic family dynamic that exists to this day. The very necessary open discussion by the parents did not happen.

 

[innsertnamehere]

reminds me of the fighting when the family cottage has to be decided upon at death of the parents.

Best option is to have a strong will that is openly discussed with your kids beforehand.

My parent's went through this. Cottage property was purchased in the 1950's by my grandparents, and they had 4 kids. How do you hand down the property, especially when all 4 are interested in cottaging?

One ended up marrying someone who had another cottage on the same lake, who then later divorced and bought a property with parental assistance. Another bought a property on the lake themselves in the 1980's when a cottage property could be had for under 20k. The family cottage property was actually 2 lots, so they were severed with my parents and another sibling getting each one. All 4 ended up with cottage properties on the lake, though my parents were the ones who ended up with the original cottage, purchased from my grandparents at market value.

Now it's my parent's turn to start planning the next generation's turn, and it isn't so simple. 3 kids, 2 of them interested in it. They plan on handing it down in their estate, which is probably another 20-30 years out. Details to be arranged. I can only hope it happens smoothly.

 

[blixtex]

Now it's my parent's turn to start planning the next generation's turn, and it isn't so simple. 3 kids, 2 of them interested in it. They plan on handing it down in their estate, which is probably another 20-30 years out. Details to be arranged. I can only hope it happens smoothly.

I fear it will get messy. The one that doesn't want it will want an equitable payout. While the 2 that do, trying to split ownership will ultimately result in an headache of usage, maintenance, etc. Given the way prices are now and reduced supply, it seems unlikely one can just buy surrounding properties without the 2 taking out a notable mortgage (even getting 'proceeds' from the value of the cottage).

 

[Admiral Beez]

I fear it will get messy. The one that doesn't want it will want an equitable payout. While the 2 that do, trying to split ownership will ultimately result in an headache of usage, maintenance, etc. Given the way prices are now and reduced supply, it seems unlikely one can just buy surrounding properties without the 2 taking out a notable mortgage (even getting 'proceeds' from the value of the cottage).

Best fix for this is to transfer ownership to one of them, and reduce their portion of the planned inheritance. The other 2, including the one interested in the cottage may be pleased enough with the possible windfall later. But... the ideal fix is for the owners of the cottage to sell it now, take the money and spend it on enjoying their senior years. Your inheritance is your eye and hair colour, not the fruits of your parents' hardwork.

 

[lenaitch]

Best fix for this is to transfer ownership to one of them, and reduce their portion of the planned inheritance. The other 2, including the one interested in the cottage may be pleased enough with the possible windfall later. But... the ideal fix is for the owners of the cottage to sell it now, take the money and spend it on enjoying their senior years. Your inheritance is your eye and hair colour, not the fruits of your parents' hardwork.

It could still get messy if they try to equitably account for the capital gains unless ma and pa just eat it (possibly to the chagrin of the others kids who see their 'share' diminished).

I have asked this question to others before and have never received a definitive answer: when recreational property is sold on the open market, there is no way that I can find that triggers a capital gains assessment since the provincial titles system doesn't talk to the federal tax system. A real estate lawyer will provide their advice that it is subject, but that is only advice to a client, and it is up to the seller to report. It's different if it part of an estate reconciliation since there has to be an accounting.

I agree that too many offspring are banking on their future windfall. It's a far cry from days of yor when the offspring inherited the family farm or fishing boat.

 

[Admiral Beez]

It could still get messy if they try to equitably account for the capital gains unless ma and pa just eat it (possibly to the chagrin of the others kids who see their 'share' diminished).

Best thing to do is for parents to sell the cottage now, and to give each kid their share now if the parents can afford it. I like the idea of a living inheritance, since such financial "gifts" are entirely tax free, and avoid the lawyer fees, and family squabbles. As long as the parents leave themselves enough to live on and to cover their burials, perhaps through a reverse mortgage, everyone should be happy.

 

[Admiral Beez]

Decides that an entire generation of people lack independence and drive.*

Not an entire generation, but this one is a head scratcher. We have this man-child who at 30 years old never left home, and whose parents had to get a court order for the man to leave their home.

'You have to work!': N.Y. court rules parents have right to boot 30-year-old son from home
http://nationalpost.com/news/world/judge-sides-with-parents-boots-adult-son-from-new-york-home

I can’t imagine being in my parents’ home at 30. By 30 (17 years ago now) I was gainfully employed, married, a homeowner and about to have my first kid. Who would put that off to live in mum’s basement?

I think the main discussion here is at what point are the parents not need to feel responsible for their children and when do they officially move out?

30 is a good maximum point, IMO.

Kippers = Kids In Parents' Pockets Eroding Retirement Savings
https://www.investopedia.com/terms/k/kippers.asp