a slow moving train wreck.

March 25, 2008 9:52 AM

My grandfather recently passed and left me as the co-owner of a house with my VERY irresponsible uncle. How can I protect myself from liability and how do / should I attempt to save my uncle from himself? What kind of professional should I talk to?

My grandpa still owns the house that he grew up in(in addition to his primary residence). This house is set to be split two ways between myself and one of my uncles who has lived in the house for several years rent free. My uncle is chronically irresponsible and despite living off government checks which total a large monthly sum ($3,500 ish) he was a huge financial and psychological drain on my grandfather. Long story short my grandparents when they were alive was the only thing standing between my uncle and ruin. Perfect example of his behavior: Yesterday he went to his bank and pulled out $1900. The next morning he was asking for money to fix a flat tire from family. It appears that he spent a very large portion of the $1900 on lottery tickets.

I am scared that I now am co-owner of a house with him. I am concerned that he will not make all the utility / insurance / tax payments to maintain the property. Nor do I want this property to become a financial drain on me since I dont live there. Furthermore I am concerned that he will not maintain the property and fear that in the event of some visitor getting injured that I may be held legally liable.

My uncle has expressed interest in selling the property and taking his half and moving somewhere else. While this would let me off the hook I KNOW that my uncle would end up homeless in a year without the free rent of his current situation. Then I KNOW he would start asking me for money.

Do I consent to the sale and let him ruin himself? Or do I hold out and maintain the liability of the house just for his own good?

Finally when the time comes that he hits me up for money, what kind of formal legal relationship can I set up so that instead of giving him any of my money I just help him manage his? Do I need to consult a lawyer, accountant, or some other professional?

posted by jlowen to human relations (17 comments total)

I think, ultimately, you need to treat avoiding financial liability and helping your uncle as two different issues. Selling the house to avoid entangling your finances with his is a completely reasonable thing to do if you both would rather have the money than the house. If his irresponsibility affects you, then it lessens your ability to help him. You definitely need to consult a lawyer and from there you can decide whether an accountant will help your uncle. If your grandparents were the only thing between your uncle and ruin, no amount of rent-free housing is really going to help him because he'll keep blowing money on frivolous things whether he lives in that house or not.
posted by Inspector.Gadget at 10:01 AM on March 25

... no amount of rent-free housing is really going to help him because he'll keep blowing money on frivolous things whether he lives in that house or not.

Worse, the rent-free housing is enabling him to blow all his money on pointless things. Work on selling the house while trying to find finding some counseling/therapy for your uncle. Your grandparents made his ultimately destructive lifestyle possible for years (out of kindness, to be sure) and he's not instantly going to become a self-sufficient person. He's almost certainly going to need both motivation and professional assistance, but allowing him to stay in the house is not going to make things better.

Unless you want to assume your grandparents' role as your uncle's caretaker, get rid of the property and work on getting him professional help.
posted by Nelsormensch at 10:11 AM on March 25

Do I consent to the sale and let him ruin himself?

Yes ... but talk to a probate lawyer but what your other options might be.
posted by notjustfoxybrown at 10:12 AM on March 25

Do I need to consult a lawyer, accountant, or some other professional?

You should at least get a lawyer, and I would get an accountant, too. And it sounds like you might eventually need a mental health professional, if it all drives you mad.
posted by The World Famous at 10:17 AM on March 25

If you want to keep the property but don't want to sell it, consider holding it in trust. Then both you and your uncle can use it but he can't really mess it up too much (or sell his interest in it to someone else, for example). Talk to an estate planning lawyer.
posted by lockestockbarrel at 10:18 AM on March 25

Your grandfather was your uncle's dad. You are your uncle's nephew. While family is family, just know that your relationship to the man allows for a different sort of response to him than your grandfather's relationship allowed. I'm not saying that you need to be cold and uncaring, but you don't have to expend all your energy or money on figuring this out, and I hope no one expects you to.
posted by incessant at 10:28 AM on March 25

Here are a couple ideas for saving your uncle from himself. A lot of payments to utilities can be set up to withdraw directly from a bank account. You can even choose when to pay them by e-check, with a "pay my bills" service from a bank. Find a bank that lets you do this, and set up an account for your uncle that pays his bills on the exact day his goverment support funds are deposited. You can do this all online. It sounds like he withdraws what he has, and if he has already paid the bills, he can't blow the money. If you think he should stay in the house, then you can offer to sell him your part of the house through a loan at some very reasonable rate, which you can also set-up with his bank account to pay you back through automatic withdrawals.

Another option is to get a renter for the house. Any proceeds from renting, less expenses of house upkeep, can be split between you and your uncle. This will allow your Uncle to move, give him a bit more money to find his own place, and let him try living on his own. If it doesn't work out, he can move back to the house next year.
posted by Eringatang at 10:37 AM on March 25 [2 favorites]

If you don't jointly sell the house, it's probably just a matter of time until your uncle gets a loan secured against the house despite joint ownership, and the entire thing goes bye bye. If you sell it, you could hold onto a half of your half to help you uncle to his feet/rehab/counselling when his half is gone in a few months to ease your conscience. Worse, if your uncle forges your signature to get a secured loan and it's a recourse loan, you could actually end up with creditors chasing you. Jump at your uncle's thought of selling it.
posted by nobeagle at 11:14 AM on March 25

He will not make all the utility / insurance / tax payments to maintain the property. You need a family meeting. Your uncle may very well be unable to care for himself, potentially due to mental illness. If so, the government funds may be directed to someone appointed to care for him, and that person would pay utilities, insurance and other bills, for a fee. We did this for a family member who was willing to turn over this responsibility. It's worked out well, and there's money left over for lottery tickets, etc.

How old is the uncle, how healthy, and how willing are you to have this inheritance tied up? It's fair for you to expect that your ownership will increase as you allow Uncle to live there rent-free, or for you to get some rent from Uncle. You might also consider a condo, or some form of housing where Uncle can live a nice life. You do need a lawyer, and you need someone who knows the social services environment in your area. In our case, a psychiatrist who'd worked w/ the state.
posted by theora55 at 11:38 AM on March 25

If Uncle is getting $3500/month from somewhere, he is not going to starve--though he may go hungry towards the end of the month. Sell the house ASAP and wash your hands of his financial problems. And by God get a lawyer now to guide you through this, it would be all to easy to you to find yourself with nothing.
posted by LarryC at 11:39 AM on March 25

Sell the house (you can probably compell the sale if you uncle won't cooperate and can't otherwise compensate you for your interest).

It sounds like your uncle would benefit from having a fiduciary guardian, but he'd have to accept that for himself, and I don't think responsibility for that should fall entirely on you. Are any of your uncle's siblings alive?
posted by Good Brain at 11:40 AM on March 25

For those who have asked, my uncle is in his 60's, has moderately bad health due to some serious complications from his service in Vietnam (read: Agent Orange - hence the government checks). He has one remaining sibling and they cant stand each other. The whole reason I am in the mix is that I am standing in my mother's place who passed away when I was a child. The house he lives in is about 3 hours away from me so I cant practically be involved in any regular maintenance/inspection.

Thanks everyone for your help. I am thinking that perhaps selling the house is the best way. i heard an NPR story on addiction once that talked about how until the person with the problem hits rock bottom then they often aren't willing to accept help. Maybe the best thing for him is to hit financial rock bottom and then he will accept a fiduciary guardian. Selling the house is probably the best way to protect myself against his inevitable decline.
posted by jlowen at 12:05 PM on March 25

ps. I wasn't suggesting that you or any aunts and uncles should be the fiduciary guardian, just that you might all work to persuade him to accept one.
posted by Good Brain at 12:26 PM on March 25

I am thinking that perhaps selling the house is the best way.

I'd just like to throw in a pitch here for finding a way to buy your Uncle out while holding onto the house and perhaps using it as a rental property. With the market going south right now, its not a great time to sell, plus holding onto it as a rental property will give you (and, potentially, your uncle) a long-term income stream that could potentially generate a larger income stream (over years) than a lump sum from a sale.

My mom inherited two properties (many years apart) and has held onto both of them as rentals (one is an apartment house and one is a single family dwelling). The proceeds from those properties put me through college and are now funding her retirement after her pension was destroyed by financial malfeasance by her last employer. There may come a time when you need either a) the income; b) a place to live yourself; or c) just want to have your own children grow up in the house your grandfather grew up in.

If the house is "free and clear" as I assume it is, I wonder if it would be possible to settle on a buy-out amount for your uncle, then take out a mortgage for that amount? My experience is, in the long run, you'll be happier to have held onto the property than to have sold it just to get your uncle "out of your hair".
posted by anastasiav at 1:39 PM on March 25

I agree with anastasiav - find a way to buy out your uncle and hire a property manager to rent the place for you until a time that it makes sense for you to sell. Better yet, meet with a financial consultant and take advice from a professional.
posted by plinth at 1:49 PM on March 25

My first reaction was that you should buy out your uncle but your problem will be that he may come back looking for a place to live. If you can deal with keeping him away then it's not a problem, but it sounds like he will either want to continue living there or appear at your doorstep, so in some ways keeping him where he is could protect you from a bad situation, and some bad choices (you want to have your uncle arrested for trespassing?).

My second reaction is that you resign yourself to never inheriting any of that house. Unfortunately it sounds as though your grandfather never resolved this problem and is giving it to you. Your best outcome might be simply to emerge from the situation unscathed.

I do think you should consult a lawyer about your options.
posted by thomas144 at 4:09 PM on March 25

I disagree with the idea of buying the uncle out and renting the house. There's a good chance he will still see it as "his" house down the road, and expect to move back in. If you want to hold real estate as a rental, buy a different house, in the town you live in, and don't tell your uncle about it.
posted by yohko at 5:48 PM on April 1