Legal Question in Wills and Trusts in Michigan
Who owns the motel?
Mary bought a small motel in 1980 which was her personal business, not incorporated. In 1997 she added her son, Jim, to the deed hoping that he would be responsible with the business. Mary died in January 1999. Mary's will stipulated that all of her assests were to be divided equally between her three children, Jim, Carol, and Bob. Do Bob and Carol own part of the motel? If so, are Bob and Carol personally liable for taxes or debts that the motel incurs while being run by Jim? (fictitious names) Thank you.
1 Answer from Attorneys
Re: Who owns the motel?
According to your post Mary and Jim were joint owners of the motel prior to Mary's death. Each, then, owned 1/2.
When Mary died her will transferred her assets to Jim, Carol and Bob equally. That means that Jim, Carol and Bob succeeded to Mary's 1/2 interest in the motel, giving Jim, Bob and Carol each 1/6 of the motel.
Jim now owns 4/6's, Bob 1/6 and Carol 1/6 of the motel, and each is legally entitled to participate in the profits AND losses of the motel to the extent of their individual interests.
Liability for the expenses of running the motel are the responsibility of the owners, and if there isn't sufficient income to pay the expenses then each of the owners will have to come up with their share of the shortfall, which is exactly their proportion of ownership.
Yes, Carol and Bob are liable, each for 1/6. They also participate in any profits to the same extent.
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