Gifting voting shares in a family cottage LLC

[mjycdfx]

Jurisdiction

Michigan

## Imp background facts

In 2013 siblings Madeline, Sadie, and Tod inherited a Michigan hillside family cottage on a 130'x400' lot,
and a ~1.25 acre nearby piece of vacant lakefront property.
Each was appraised in 2015 for about 400k.

The ownership is tenancy in common.

### Dilemma Tod is only willing to pay $2000/year

In 2015 we determined annual cost of taxes and upkeep is ~$16,500. Tod is only
willing to pay $2000.

We're planning to setup a trust or LLC; probably separate
instances for each property.

### Tod might gift 75% of his 1/3 ownership to next gen

Tod has no children. Sadie has children Eric and Alice; Madeline has a
son Ray.

Tod is interested in involving these next gen children in both the governance
and the expenses for the property LLCs. Tod wants to gift 75% of his ownership
to the next gen, so that he would own 25% of his original 33% ; ie he retains
1/4 * 1/3 or 1/12 ownership in total.

What is best way to approach this? Any tips would be appreciated.

 

[army judge]

Nothing you can do to make a cheap owner pay what the other owners think is fair.

Some owners pay nothing.

Their names remain on the deed.

You can't stop one owner from gifting 1/2 of her ownership to her neighbor.

This explains why property shouldn't be gifted to more than one party.

If one tenant decides he wants to sell his share, guess what?

Yes, you could end up with someone not your sibling as an equal share owner.

In some situations, two owners can offer to buy out one owner.

 

[adjusterjack]

What is best way to approach this?

The absolute BEST way to handle it is sell all the property, split the proceeds three ways and everybody takes their money and gets on with their lives, or subdivide and each sibling gets deeded separate ownership of his/her own section of property.

If you can't get an agreement by all three, any one of you can file a "partition action" (google it) and force the sale or subdivision of the property.

Mark my words, no good will EVER come of the three way ownership no matter what you do or propose to do.

Why?

Because, whatever you do, or propose to do, will require three signatures and if one doesn't want to sign because the others won't give him/her what he/she wants then the recalcitrant sibling hold the others hostage to his/her will.

And if will only get worse as the years go on.