I have noticed a troubling emerging trend in estate planning. More families are owning property with different generations. This could be because real estate in Hawai‘i is expensive to purchase and even harder to maintain and keep. It is further exacerbated in situations where there are multiple children beneficiaries and/or where the parents need to leverage the equity in the home for their care, and are unable to access the equity due to a lack of income. We have seen situations where the parent gives up some or all interest in the home to their children, in fractionalized interests, so that the children can pool their resources together to qualify for a HELOC or a mortgage.
These situations are difficult to manage because of the conflicting intentions and layers of complex relationships. Parents want to preserve the home for their children; however, they also need the home for their long-term care. The children want to help their parents but have a family of their own and are also trying to plan for their own future. You can imagine problems surfacing when there are multiple owners with fractionalized interests, all with lives and families of their own. It’s a recipe for conflict, not a family legacy.
To mitigate family conflict, be proactive about your legacy and start to plan now. If you find yourself in this situation or heading in this direction, contact your estate planning attorney to ensure a lasting legacy for you and your family.
STEPHEN B. YIM, ATTORNEY AT LAW
2054 S. Beretania St., Honolulu, HI 96826
808-524-0251 | www.stephenyimestateplanning.com
Leave a Reply