In her article, attorney Robyn Walton notes that co-ownership issues often stem from “disparity amongst the siblings’ available resources” and disputes over who pays for repairs, maintenance, and taxes. To prevent these “hot button issues,” consider these three structural additions to your estate plan.

1. The “Cabin LLC”: A Business Approach to Family Fun

As Ms. Walton suggests, a Limited Liability Company (LLC) is a powerful tool for shared property. However, the real power lies in the Operating Agreement, which acts as a “User Manual” for the property. A robust agreement should specify:

• The Usage Schedule: Establish a fair system for choosing weeks (e.g., rotating major holidays like Memorial Day or the Fourth of July) to avoid the scheduling conflicts mentioned in the original article.
• Voting Rights: Instead of requiring a unanimous agreement—which can lead to the “rift” seen in the Smith family—you can establish that a majority vote decides major repairs or improvements.
• Guest Policies: Defining who can use the property (e.g., can a sibling rent it out on Airbnb?) prevents unapproved third-party use from becoming a source of friction.

2. The Maintenance Endowment: Solving Financial Inequality

One of the primary causes of inheritance disputes is when one sibling has the funds for a new roof while another is struggling financially.

• Pre-Funding the Future: Instead of leaving the property and expecting siblings to “fairly divide” expenses, you can create a “Maintenance Fund” within your Trust.
• Leveling the Playing Field: By setting aside a specific amount of cash or a life insurance payout to be held in trust for property taxes, insurance, and routine upkeep, you ensure the property remains a gift rather than a financial burden, regardless of each sibling’s personal wealth.

3. The “Exit Strategy”: Fairness for Those Who Want Out

Ms. Walton notes that “sibling co-ownership… is the exception, not the rule.” A healthy plan must acknowledge that at some point, a sibling may want or need to sell their share.

• Right of First Refusal: Your plan can require a sibling who wants to sell to first offer their share to the other siblings at a price determined by an independent appraisal.
• Buyout Provisions: Instead of a “partition suit” where a judge forces the sale of the entire property (as happened to the Smith family), you can pre-authorize a structured buyout where the remaining siblings pay the departing one over several years. This protects the property from being sold to a stranger while ensuring the departing sibling receives their fair share.

The Value of Mediated Planning

Robyn Walton’s background in Alternative Dispute Resolution is a vital resource for families. “Verbal agreements are not easily enforced,” and professional mediation can help families have these difficult conversations before the property is inherited.

If you are concerned that your family’s vacation home or farm could become a source of “Inheriting Trouble,” contact Rowe & Walton PC at 801-298-0640. Our team can help you draft a custom LLC or Trust structure that protects both your property and your family relationships.