The Indian Business Owner TIBO Magazine - Volume 003 | Page 15

• Plan for the Unexpected:
Sit down together and create guidelines to ensure
fair use of the property and manage potential
conflicts, include points such as:
• Expenses and financial considerations:
Determine how expenses and capital
improvements are going to be handled!
• Scheduling & usage: Who can use the
home and when, how are holidays handled,
and can friends and extended family use the
home?
• Standards of conduct: Cleaning
expectations, quiet hours, dealing with
damages and sharing property such as toys
and bikes.
• Decision making: Who is involved in
decision making, resolving issues and dealing
with conflicts? Who can assist with mediating
issues that arise?
• Remove the Handcuffs:
Include in the policy a way for owners to opt-out.
Sometimes life events make it difficult for someone
to take advantage of the property, such as divorce
or not being able to contribute financially. Forcing
connectivity and ownership can lead to greater
resentment and discord. Many families will agree
to buy out the sibling’s ownership in installments
so the property can stay in the family and other
family owners are not faced with the urgency of
coming up with immediate liquidity.
• Review and Revise Regularly:
Having a policy is just the first step. Some owners
review quarterly and some less frequently. We
recommend reviewing at least every three years to
make adjustments.
• Get tax help:
Consider setting the property up as an LLC to
minimize liability and make transfers of partial
interests easy among parties invested in the
property. You may also consider a Qualified
Partner Residence Trust (QPRT) that allows you
to transfer the property with little or no gift tax.
Most families and friends have shared properties to
gather, laugh, and build memories. Having a plan
and getting some help to stay accountable can make
a world of difference in achieving this goal. Having
patience helps too.
Jill Shipley
Abbot Downing
www.AbbotDowning.com
Jill Shipley is a managing director at Abbot Downing who
strives to identify families’ wealth objectives and develop long
range strategies critical to sustaining wealth over generations.
Overall, she is focused on the preservation and continued
development of the qualitative aspects of a client family’s
wealth.
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