Leaving Property, One Owned, the Other Mortgaged

[vito]

I have two questions, somewhat related.

First, I have a piece of land which I own outright. I have three sons. One of them wants the land when I am gone, and the other two have no problem with that. But how can I ensure that the other two are compensated for their respective proportions (1/3) of the value of the land? I was thinking to leave it to all three of them, and then if the one wants it, he will have to buy the others out, either with cash, a loan, or a land contract. What do you think?

Second, I have a house with a 15 year bubble mortgage on it. The bubble is 14 years away. The house is also upside down, with negative equity. I was gonna leave it to them, but I'm not sure this would be good for them. They would just inherit a mortgage. Do I have the ability to leave my assets to my sons to be split 3 ways, but leave my house to none of them? What would happen in that case? Would it be put on the market? Could the bank just take it back and put in on the market?

I also considered just leaving it to all three of them, and if they all wish to renounce it, they could do so. But this is all based on internet research.

Lemme know what you think!

thanks,
-Vito

[Mr. Knowitall]

There's no perfect way to balance out the interests. Real estate can dramatically change in value over time, as can other items in your estate. Some people buy life insurance, the proceeds of which are used to equalize bequests. Leaving the property jointly is problematic, as it can land the two brothers who don't want the land with obligations to maintain it, pay taxes, etc., and the third brother may not be able to afford to buy them out - or may change his mind.

You can leave your house to your sons and, if it remains upside-down at the time of your death, they can decline to receive that bequest. If the mortgage is not paid off or assumed, the bank will ultimately foreclose. If the house remains upside-down, depending upon the laws of your undisclosed state the estate may be liable for the deficiency.

[vito]

You can leave your house to your sons and, if it remains upside-down at the time of your death, they can decline to receive that bequest. If the mortgage is not paid off or assumed, the bank will ultimately foreclose. If the house remains upside-down, depending upon the laws of your undisclosed state the estate may be liable for the deficiency.

Ok, that's what I figured. Wouldn't it also be possible for all three of them to take the deed to the bank and surrender it? I suppose in a sense, that's the same as foreclosure.

The reason I want to do it this way is so they have options. If one or two or all three want the house, it's possible. If no one wants it, it's possible. I just didn't think it would be right to leave it to only one of them, to leave a big debt to only one of them.