Thursday, November 5, 2009

So Am I A Greedy Daughter?

Whenever there were salacious news stories about inheritance fights between kids of the rich-and-famous, my family always laughed, "It's a good thing we don't have any money." (Remember the inheritance fight between Anna Nicole and J. Howard Marshall, III, after the Cryptkeeper kicked the bucket?)

And my parents being broke is a wonderful thing, since they could never try to control me by threatening to write me out of their will. Anyhow, I just learned I'm apparently one of those greedy children who try to wrest their parent's money with their grubby little paws.

Here's the story: My sister bought a modest home about four years ago. Last year, right when the economy was cratering, her employer transferred her to another state. She had the option to rent her house out, but she really didn't want to be an absentee landlord. She luckily sold her home and broke even. My sister has yet again been transferred (three times in five years) and this time, she'll be living in the same city where our parents live.

My sister sulked that with her constant transfers, she could never buy real estate and own it to profitability without being a long distance, absentee landlord. She hatched the idea that perhaps if she buys a house, she can rent it to my parents once she is transferred again.

I told my sister that she has a great plan, but if she and parents follow through with this, SHE will have to be the one to take care of our parents when there's an emergency. I should not be looked upon to care for my parents, especially if I'm not getting any money from parents. My sister and my mom were aghast when I made this comment.

I know this sounds cold, but I think equity and fairness demands this outcome. Why should my sister expect an immediate transfer of wealth from my parents with no strings attached? Or am I just being a bratty, greedy daughter?


The Lost Goat said...

Assuming that your parents would be renting somewhere anyway ...

I think it's perfectly reasonable that you not take over the duties required of a landlord. If the toilet overflows onto the ceiling in the middle of the night, that's your sister's problem.

I fail to see why your sister's collecting rent makes any difference for other sorts of problems. For instance, if your Dad has heart pain in the middle of the night and calls you for help, you wouldn't expect him to pay you to hold his hand in the ambulance.

It sounds to me like you are upset that your sister is going to get to collect rent from your parents. In some ways she'll come out ahead with this plan - your parents aren't likely to move out, so she'll have guaranteed renters. On the other hand, if they have financial problems in their old age and can't pay her, is she really going to evict her parents? Plus, rental is always more difficult and expensive than you think it is going to be, in my experience.

If you are really bothered by this, maybe you and your sister could work out as system where you go halves for the house, she pays you half rent while she lives there, and then your parents split the rent between you. But I'd just let it lie, except for making it plan that you do not intend to be the substitute landlord.

Money Beagle said...

I wish I could offer more help but I'm an only child, and thus the arguments of siblings is something I can't really understand. I've watched my wife and sister-in-law have the most amazing arguments and I can only watch in confusion.

I guess the one thing I will say is that I can see both sides of the argument. Have you talked to your parents about this? I would recommend doing so together with you and your sister (and any other siblings that you might have). Maybe working it out as a family will leave people with a workable solution for everybody.

Jin6655321 said...

I thought your post was pretty cold. Say one of your parents fell ill, are you saying that she should be the only one taking them to their doctors appointments and helping them deal?

Obviously, I don't know the whole story but, from what you wrote, it doesn't seem like your sister's getting a particularly sweet deal. If your sister plans on charging a fair rent, her only benefit is that she has renters that she can trust.

Let's say you have a car you need to sell. Let's say your mom needs to buy a car so she buys yours at a fair market price. Your parents aren't giving you money, they're buying something from you. The only benefit is that both of you are dealing with someone you can trust.

Would it be fair for your sister to then say, "Well, since mom gave you money, you're responsible for anything that happens to her."

I'm sure there's more to this story, maybe a history of unfairness? I know sometimes, financially, one kid gets screwed over.

A regular follower said...

I've always enjoyed reading your blog. However, I think it's important to remind you that there is much more to life than just money.

Anonymous said...

I think there are two problems in all of this.

The first is the notion that this is a great plan. I wouldn't choose to rent from or to family, because it seems like a road to hard feelings unless everyone is very good and very careful. You're already unhappy about it because you see your sister as potentially benefitting from your parents in a way that you won't--so the hard feelings are already starting. Your parents may become unhappy with it if your sister doesn't take care of things like a landlord should, and leaves it on them to take care of maintenance and repairs. Your sister may become unhappy with it if your parents don't always make the payments on time or if the place gets damaged and she has to pay to get it repaired. It could also become a problem if other things happen. What if your sister gets laid off or something happens where she needs the money out of the house. Wouldn't it create hard feelings in the family if your parents have to move so that she can sell? Or suppose that some years down the road, your parents can no longer live there for some reason. Is your sister going to be able to handle it if your parents have to move out and she has to find other tenants? It just seems like a terrible idea all around.

The other problem is your linking "not caring" for your parents in an emergency with whether or not they go along with this scheme. It might be better if you apologized for saying that, and instead say that you're concerned that you won't be able to afford to contribute as much as you'd like if something happened. If your parents are depleting their reserves in order to rent from your sister, you want to be sure that it's understood that she's going to shoulder a heavier load if someday they can't cover an unexpected expense, whether it's an emergency or day-to-day living. I think that's probably closer to what you meant, or at least I hope it is.

My position for myself is that if my mother gave my sister a large sum of money and me zero, I would be fine, as long as it turned out that my mother never needed that money to take care of herself. If it turned out that my mother needed it someday, I would be mad at my sister for accepting the money or setting herself up to receive it. And I would be twice as mad if, having received it, my sister didn't take on more responsibility in the face of my mother's need.

Miss M said...

Unless your sister is gouging them with the rent, it's hard to see how this helps her much financially. Houses are a lot of work and responsibility and most likely here in CA, the rental would be cash flow negative (rent is less than the cost of keeping and maintaining the place). It may be a bad idea just because they say never landlord to friends or family, you should keep an arm's length relationship with tenants. If your sister takes on the risk of buying a house for them to live in, she probably should benefit in terms of the equity etc.

Abigail said...

I think a couple things need clarification.

First: emergency. Are you talking about house emergency or all emergencies, ie health/financial?

House emergency (repair, etc) I think is absolutely okay. It's your sister's house, therefore her responsibility to keep up.

Medical problems though, that I don't understand. I can't imagine you mean that, if a parent fell ill, you wouldn't drive them to a doctor or be with them in a hospital. So perhaps you meant in the sense of helping out financially? I always figured it was divided based on how much each sibling could afford to help out.

As for the "immediate transfer of wealth," I think Miss Moneybags has a point. You don't get rich renting -- at least, not in the first few years. If you're sister is VERY lucky, she'll break even on the deal. Or unless she has a large down payment, making her mortgage payments small.

I guess I agree with the others that, if you're talking about helping take care of your parents at all, you're being a little cold.

First of all, it's their money to do with as they please. Yes, ideally, parents would split whatever money they have among siblings in equal portions. But that's not how it works, often. Even while they're still alive.

If you think that it's unfair because your sister doesn't need money and perhaps you do, that's one thing. It's still their money and their choice, but you could come to them with, "Gee mom and dad, you know I'm having a hard time with my debt; and Susie is already debt free and makes more than me, and so it kind of hurts that you're willing to offer her help but not me." Maybe that would help them better understand where you're coming from.