Inherited a house with my 2 brothers

[Michele Hart]

My mom is nearing the end of her life and has left me and my two brothers her condo in Hawaii. As you can guess the three of us have different ideas on what to do. So, I'd like to get ahead of the game and start working up a plan and a strong argument for it which I can use when the time comes.  Here are some details:

1) The condo is in Kona Hawaii and the three of us all live in Colorado

2) According to Zillow it is worth just over a million. (But that is Zillow). My mom does not owe anything on it.

3)It is well kept, 2 bed 2.5 bath, fully furnished. But, it is ocean front so the upkeep will be higher than normal. 

4)I'm open to anything but brother A wants to take the easier route possible (likely meaning selling it). Brother B could be convinced to see things my way but has had some financial strains lately so it might be an uphill battle. 

5)My mom is in memory care and did not do any end-of-life planning so my brothers and I are footing the cost of her care. So, my brothers may want to borrow against the house for her care if needed. 

6)I own 3 long term rentals and am not afraid of creative investing. 

[Aristotle Kumpis]

Hey Michele. Sorry to hear about your mom. It's not fun dealing with aging parents. I am going through that right now with my mom and step dad. It's a part time job now. You all must agree to the same thing or else you will just end up fighting about what to do.

Since your mom doesn't have it in a living trust, I suggest you do that right away. That outlines who gets what, and you avoid probate court. If you don't do that, once she passes it will go to probate court and it can cost a lot money. Plus, it can take 6-12 months or more to deal with. Then the court decides what to do, which is usually sell it. I recommend legal advice from an attorney. I have a great real estate attorney referral if you want it. 

[Theresa Harris]

Honestly unless you have the funds to buy them out of their portion when the time comes, it is better to sell it. You can take the proceeds and do with it what you want (eg buy a rental closer to home).  I agree with Aristotle-get paperwork in order now to ensure when the time comes, you have less to deal with.

[Michael Borger]

Hi @Michele Hart - I'm sorry to hear about your mom. I've been in your situation and nothing can prepare you for losing a parent. As mentioned elsewhere, as much as you're able to do so now, handle all estate matters so you can avoid probate. If it does go to probate, hopefully your brothers and you can amicably go the informal route vs formal (I've worked with families in both when buying properties out of probate and informal is FAR easier).

Since there's no debt on the house, maybe you could sell with financing or maybe you could even buy out your brothers with financing -- that way you maintain ownership and just pay them a monthly amount.

[Loren Clive]

Definitely talk to an attorney, Michele. Not much to add to the good advice already written, except

Your mom could easily get a reverse mortgage to pay for her care, then you and your brothers could split the equity left upon sale. I agree it makes no sense to hold onto this condo once she passes.

[Rick H.]

This has been our primary business for well-over thirty (30) years, but in California ONLY.

Few posters here are attorneys, let alone licensed to practice law in Hawaii. Hawaiian real estate law differs from other western states significantly, mostly due to its monarchal heritage and the Bishop Trust influence.

The basics are the same as would be in California; determine the condition of title ownership (individual(s), estate (including conservatorship, if appropriate) OR fiduciary acting for trust.

Use a qualified private money equity lender to make a loan sufficient to buy out the cash-only beneficiary

The legal community in HI and Big Island in particular is small. Attorneys are very tight with title insurance companies so you won’t have to look far.