The topic of common property ownership comes up frequently in the state of Maine with many people owning lake and beach properties in addition to their primary residences. It is commonplace for people to pass down their real estate to the next generation. This holds particularly true for sentimental vacation property.
It may seem relatively straightforward to devise real property to your children in your will, but it is important to consider that common ownership of real estate comes with its own unique set of challenges. That being said, many problems that arise from common ownership can be mitigated or avoided if the grantor takes certain steps to clearly outline their intent.
Being aware of the problem areas along with proper planning are keys to avoiding disputes and successfully keeping the real estate in the family for years to come. Important considerations for common property ownership include, but are not limited to, the following:
- Does each child (devisee) want an interest in the property?
- Will the children each own an equal share of the property?
- Will the property be held by a trust, LLC, or in individual shares?
- Can the children transfer their ownership shares to others during their lifetime?
Use of the Vacation Property
- How is use of the property allocated among children? Grandchildren?
- Who arbitrates disputes regarding usage?
- Can the children rent out their allocated time to non-family members?
- Will the property be rented out when not in use by any of the children?
Designating a Decision Maker
- Who is in charge of the property?
- Can the person in charge be removed or replaced by a majority vote?
- Should the person in charge receive compensation for their duties?
Maintenance and Expenses
- How will maintenance expenses be shared?
- What expenses are included?
- Can a family member work on the premises and be compensated?
- What would be the proper penalty for someone refusing to contribute their share of expenses?
To thoroughly work through the potential pitfalls of common property ownership, grantors should seek out a qualified attorney.
If you have questions, please contact:
Avery A. Dandreta email@example.com
Darcie P.L. Beaudin firstname.lastname@example.org
This article is not legal advice but should be considered as general guidance in the area of estate planning and real estate and corporate transactions. Darcie P.L. Beaudin is a Trust & Estate Planning attorney, Avery A. Dandreta handles all aspects of commercial real estate transactions; others at the firm handle business and other matters. You can contact us at 207.784.3200. Skelton Taintor & Abbott is a full service law firm providing legal services to individuals, companies, and municipalities throughout Maine. It has been in operation since its founding in 1853.