50/50 ownership -ways power imbalance can occur

Marta

New Member
Jurisdiction
Florida
Two siblings are listed in a mother's will as 50/50 owners of everything including a commercial property and a S Corp attached to the rental of that property. Sibling A is a licensed attorney and sibling B is a nurse. The commercial property normally brings in about $7000 per month in rental income but it is currently vacant. The mother is ill and has only a few years left to live. Sibling A Has been unemployed for 11 years and has been pressuring the mother to rent the property to her to open a restaurant. She has no restaurant experience so she plans to partner with another experienced restaurant owner (Partner A) to open this restaurant. Partner A likes the building but is not willing to invest the money needed into the building to renovate it....hence the motive for partnership with sibling A. Sibling A would invest the money into renovating the building and would plan to work in the proposed restaurant business. They want a 10 year lease (which will surely outlive the mother and therefore ownership of this building and the created S Corp which contains it will pass to Sibling A (50%) and Sibling B (50%) during the lease.

Sibling B is concerned that Sibling A is creating a power imbalance by this proposed scenario and potential financial and legal liability for her because Sibling A will be occupying the building and investing money into renovating the building. Sibling A has stated that if the restaurant business does not succeed she will stop paying rent and "screw sibling B". . Sibling A also has a history of committing mortgage fraud and federal financial aid fraud. The mother intends to protect sibling B by writing in the lease to Sibling A and Partner A that rent must be market value and that the 3rd party resturant owner is to pay his share of the rent directly to Sibling B. There is a large school which would like to purchase the building. Sibling B is concerned that she will have different goals from Sibling A regarding this building of Sibling A occupies it.

Are Sibling B's concerns founded? What ways could this harm Sibling B?

What happens if Partner A fails to pay rent and Sibling A refused to pay rent?

Once the mother dies and Sibling A is now 50% owner of building, can she choose to change the terms of the 10 year lease originally signed between the mother and Sibling A/Partner A?

Can Sibling A claim majority shareholder of the building or S Corp containing it if she has invested money and time into the building?

Can Sibling A block any sale of the building ?

If Sibling A conducts any fraud in her restaurant business with Partner A or if negligence on their part results in an injury/lawsuit with a customer, can Sibling B be held liable too since she will be 50% owner of the building and SCorp with Sibling A?
 
Your mother is alive.
The property is hers to use or gift as she sees fit.
 
Two siblings are listed in a mother's will as 50/50 owners of everything

You've already listed the nightmares that can (and probably will) occur. There are probably some you haven't even thought of.

Leaving everything 50/50 is an incredibly bad idea.

As long as your mother is still alive I suggest you prevail upon her to divide the assets in her will so that each of you get 100% of something.
 
Can anyone please list other possible nightmares that Sibling A could create for Sibling B in this scenario?

Or other nightmares that can occur in general by being 50/50 owner of a property?


Sibling B has begged the mother to divide the assets as suggested above...(in whatever proportion she sees fit...but that whatever is given to Sibling B be 100% detached from Sibling A.). The mother is afraid to do it because it will anger Sibling A. Also the mother trusts Sibling A's legal advice that a 50/50 split will work fine.

The only way Sibling B can convince the mother to divide the estate with 100% ownership is if she can present multiple potential conflicts that could occur with a 50/50 split.


The mother says she wants both daughters to be equal heirs. She does NOT want to do this lease with Sibling A. But Sibling A has been calling and screaming and crying to the mother for over a year to rent this property to her. Every time the mother said no to Sibling A, then Sibling A would threaten suicide or disappear for a week or two leaving the mother to worry. The mother is finally giving in because she is exhausted.

Sibling A had a law license, a Realestate brokers license, and has lots of time on her hands because she is divorced (3 times), unemployed, and kids are all grown. She has been in and out of psych wards and diagnosed with Borderline personality disorder and Sociopathy.

I am begging you...if you can think of any potential nightmares that can occur for Sibling B with a 50/50 split ownership of properties, please share them....
 
I am on several legal websites and hardly a month goes by when I don't read about heirs squabbling about jointly inherited property. Unfortunately, it's not possible for my to take the time and look for them.

However, I did find the following article about estate planning that might shed some light:

Head Off Squabbles Among Your Heirs

You can also google something like "leaving assets jointly to heirs" and see what you can come up with.

Trouble is, since your mother already seems to be succumbing to the manipulative behavior of your sibling, I really don't hold out any hope of your situation improving.

Sorry.
 
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