Now she is saying I stole the condo and the money from the sale. She claims that because it was bought with her trust fund money that it was legally hers. And yet, she insisted on only putting my name on the title to the condo. Meanwhile, I paid all the taxes, association dues, utilities and made all the repairs to the unit since it was purchased.
Who gets the cash from the sale and what recourse do I have?
A: We get plenty of letters from our readers detailing some fairly complicated family real estate situations, but this one really takes the cake.
Setting aside the legal issues, let’s just say that it seems that neither you nor your sister seem to want to do what’s right.
Your sister didn’t want to play by the rules. She had a trust fund and wanted you on the title to the home to assume the responsibilities of homeownership while she continued to receive government benefits. In your email, you even stated that she might lose those benefits if the property was in her name.
So, you did her a favor. Was there a written agreement as to who would cover the expenses of owning the unit? Or what would happen to the equity down the line when the property was sold? Doesn’t seem like it. Still, when you sold the property, we think you could have fairly expected to be reimbursed for the out-of-pocket expenses you paid for while she lived in the property, and return the balance of the cash to your sister’s trust.
Our question to you is, why do you think you’re entitled to more? And why, since your sister has trusted you with her trust funds, do you think it’s okay to abuse her trust in you?
Both you and your sister are trying to get away with something to which neither of you are entitled. Clever tax planning seems to have allowed your sister to get government assistance while having access to substantial assets. And you should not get the benefit of the proceeds from the sale of the condo unless your sister had explicitly given the condo to you. In writing.
For a legal perspective, you’ll have to talk to an attorney to get that attorney’s opinion on the many issues you’ve raised. One of those issues would be whether your sister intended to gift you the condo. It doesn’t seem like she did from your email. You never said that she gifted you the condominium, only that she put you on title to avoid losing her government benefits. So, on that one, it looks like you agreed to hold the title for her. Whether this situation causes you tax problems or other legal issues, we’ll leave that for you and your attorney to parse.
Your sister seems to have taken advantage of you by having you pay all of the expenses of the condo. You paid the taxes, the assessments and even the utility charges. While she lived in the condo, she apparently never reimbursed you for these expenses. That doesn’t seem fair to us either. Your sister shouldn’t ask you to do her a favor and then turn around and ask you to support her financially.
This situation combines family, a lack of trust, bad faith and lots of cash. In short, a disaster waiting to happen. But fair is fair. Our take is that you shouldn’t be out of pocket for any costs related to the ownership of the condo and she should get the remaining proceeds from the sale returned to her trust (if you can do that) after making you whole.
Clearly, you and your sister need to sit down in a mediated environment and hash this out, or you’ll wind up losing family over money, which is the worst outcome for both of you.
Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact them through the website, ThinkGlink.com.
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