Legacy property ownership: Sometimes life ain't fair, kids

Any appraiser within the field knows that a case is always made more difficult when there are family interests involved. In addition to any standard appraisal problems involved, emotional connection and historical relationships are added into the mix. Yet another layer of involvement comes when intergenerational gifting of property interest occurs, a situation extremely common in the State of Maine where often multiple generations have owned the same property, forging intimate relationships and memories. As families grow and expand however, property ownership becomes fairly complex, often involving multiple owners and conflicting interests. While a well-meaning matriarch or patriarch may seem to have their descendant's best interests at heart when they deed their property to all four, five, or six of their children, these intentions do not always translate clearly into their future generations. Equitable division of property between descendants can lead to disagreements about property use and conflicting family claims to certain parts of the property, particularly those with immense emotional or historical value to particular family members. Agreements made between parents and their children or other descendants while the parents still retained ownership over the property may lose meaning after inheritors' families grow and expand to include other members and interests and lifestyles. In extreme situations, third parties, including lawyers, judges, neighbors, mediators, and in-laws as well as other family relations may become involved in partition suits over property ownership in order to force a settlement. In one partition case in which we were involved, over 40 interested parties, related by blood and, if not, by marriage and our involvement in the case spanned almost an entire year! Suits may drag on much longer if family members or a judge cannot compel the interested parties to find a solution, spanning years or even multiple generations. The emotional connection of family real estate and their historical relationships presents legacy property owners quite a conundrum. Current owners should be aware that split interests do not always serve the interests of the owners although it may seem the equitable choice at the time. Property stewardship is an important and integral part of why families continue a legacy ownership, however pitfalls may arise in between generations of family members. Successful multigenerational property ownership is possible, but not necessarily apparently equitable. The essential decisions for a family must take into consideration the benefits and drawbacks of keeping a parcel contiguous versus splitting into multiple parcels and/or multiple interests. These decisions should, if at all possible, be made ahead of time in lieu of letting happenstance take its course. Brendan Hall is vice president at Amidon Appraisal Company, Portland, ME.