Legal Question in Wills and Trusts in California
Parents Helping Children Buy Homes
My Dad helped my brother & I get our 1st homes. On mine Dad & I both went on title as undivided 1/2 int. We both paid mortgage pmts. 14 yrs later - Dad (acting as own trustee for his Trust) transferred the remaining 1/2 int. to me & recorded it. He wants me to pay back the amount he put in, ''like a loan.'' I pay monthly on a Note. My sibling does not agree and thinks I owe more. My father said, base the amount lent on the Net, and include that Dad took all tax deductions for yrs. (He went on deed to take advantage of taxbenefits, since my income wasn�t high enough to receive much from shelter.) The area of dispute here is whether or not the tax benefit my father received, should be netted against the money he put into the property, to arrive at the final amount I am paying back? Can you give me some examples of how this works? We refinanced 3x on 30-yr loans, so the principle is same as 1990. Dad said his pmts were mostly interest. This was several mos. prior to his conservatorshp. I�d like to hear some examples of how a child has paid back a parent, when it is based on the Net actually cost? Tax benefits are real money; in some years he wrote off $10k. My bro has made this a huge dispute, & Dad said it was based on logic.
3 Answers from Attorneys
Re: Parents Helping Children Buy Homes
Howdy:
To expand on Ken's comments, your question mentions your dad's conservatorship. From that, I'll assume he's lost some capacity to handle his affairs. I'll further assume that your brother might be his guardian ... maybe acting under the provisions of the trust?
My point here is that if the agreement you have with your father pre-dates any incapacity, than that's all you need. It also appears that your dad deeded his interest in the property to you. I'll assume this was before any incapacity.
So, as Ken said, your brother needs to MYOB.
Blood may be thicker than water, but it's thinner than cash.
rkr
(Oh, what happened to the house your dad helped your brother buy? Just curious, you know? - r)
Re: Parents Helping Children Buy Homes
What your asking for is what I would refer to as 'scratch' work; you just need to put pen to paper and calculate the benefit. Any good accountant or financial person should be able to help you with the calculation.
As for the big picture, I think your Dad sounds very fair and the transaction make sense. If this is the deal you reached with your father, then it should stand.
Re: Parents Helping Children Buy Homes
Your Bro needs to learn the term MYOB (Mind your own business). Any arrangement that you made between you and your father is between the two of you. Unless your father is senile or not of good mind, and you didn't coerce him in any way, whatever the two of you agree on is enough. There is no "formula" to set these things up. Sorry you have a brother like that.
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