Dear Penny: I Own Family Property. Do I Have to Share Profits if I Sell?
I was left property in Illinois that’s been in my family for 40 years. My father has paid the bills and taxes on it since the late 1970s. He passed in 2017, and now this land was passed to me to pay taxes on.
The house that was on the property was demolished years ago due to age, so I am just paying the taxes on the land, which is worth around $9,000 per lot for five lots. My grandmother passed it to my father and then my father passed it to me. My grandmother always said this land belongs to her grandchildren (11 of us) but my father always paid for everything. I am thinking of selling the land. My family says I need to share the proceeds of the sale, even though I've been paying the taxes for years. I am the only one on the tax deed. Help. Do I need to pay my family if I sell?
— Heir of Lots
It sounds like you face two questions: 1) Do you have any obligation to your grandmother’s wishes to share the wealth her property contributes to your family? And 2) Do you have any legal obligation to share the proceeds from the land with your siblings and/or cousins?
Only you can answer the first question; you know your family’s history and know better than I do what your grandmother hoped the property would mean for the family.
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The second question is easy to answer based on the information you’ve shared. If you’re the only person on the tax deed of the property, you’re the sole owner. You can decide how to use the land as you please, and you’re the only person legally entitled to any proceeds from selling it. Consult with a lawyer and check your grandmother’s and father’s wills before initiating a sale to make sure you’re not held to any additional stipulations.
One simple way to appease your family members and ensure you’re made whole would be to split the proceeds of the land after recovering the tax you’ve paid into it over the past six years. Calculate how much you’ve paid in taxes (and any cost to sell the land), take that much from the sale, then split the remainder among all 11 grandchildren. So you get your share plus recover what you’ve paid into taxes. That lets you all benefit from the land equally without leaving you footing the bill.
However, I also encourage you to consider why your father and now you have been made the stewards of this property in your family.
Was this a coincidence of birth order? Was your father better equipped than his siblings to handle the property’s financial needs? How does your financial situation compare to that of your cousins and siblings? Have you benefited from having the property on your balance sheet over the years (i.e. in loan considerations or your credit score)?
Look beyond the numbers on these lots of land, and consider the full picture of your family’s financial circumstances. Perhaps there’s an equitable way to share this family wealth that’ll contribute to healthy finances not only in your household but for your grandmother’s entire lineage.
Dana Miranda is a Certified Educator in Personal Finance®, author, speaker and personal finance journalist. She writes Healthy Rich, a newsletter about how capitalism impacts the ways we think, teach and talk about money.
This article contains general information and explains options you may have, but it is not intended to be investment advice or a personal recommendation. We can't personalize articles for our readers, so your situation may vary from the one discussed here. Please seek a licensed professional for tax advice, legal advice, financial planning advice or investment advice.