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Financial Planners - any advice?
Old 03-20-2011, 07:25 AM   #1
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Financial Planners - any advice?

Reading most of your posts, I can tell I'm waaay out of my league. Noone in our family ever really understood (or trusted) investments and that is probably a clear explanation for the state of current affairs. Fact remains that while the situation is not intolerable, it could quickly become so unless we direct our path with some expertise. I'm fine and not complaining, but I am very concerned about my brother and his situation - all the more, because a nice chunk of my inheritance also rides on his coming out of this OK. In short summary: after his divorce, he and Mother purchased a lovely ranch style home in a good neighborhood on the Cape - counting on both or their income to cover mortgage and utilities. Within three years Mother passed away and two years later my brother was laid off. He is one of those people who are mortgaged above the current value of the home - so a sale is not possible. He is not really open to renting out part of the house - despite the fact that it is nicely arranged for two separate living units. My suggestion to him was to find a roommate/tenant. Alternatively, he could lease out the entire house and come to live in Hungary during that time. I've an apartment in the city and the house in the country which belongs to us both. That is the extent of my wisdom. What else is a possibility that I'm not seeing, if any? Ideas, suggestions, insight would be much appreciated.
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Old 03-20-2011, 09:17 AM   #2
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Sounds like you are wise to be concerned. If bro doesn't get real soon, it sounds from what you've told us like he'll be out on the street and the bank will have the home. How is he currently paying the mortgage and property costs if he is unemployed?

Sounds like renting part of the house or taking on roommates is a reasonable solution.
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Old 03-22-2011, 05:22 PM   #3
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So sorry to hear about your brother's predicament. My question is what happened to your Mother's estate when she passed away? Do you own part of the home that your brother now occupies? Did you gain income from the estate that you could use to help keep the house, if that is what you want to do? Do you own part of the house (did your mother leave her part of it to you?). Answers to these questions might give you some options. Good luck!
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Old 03-24-2011, 04:22 AM   #4
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What the heck does this have to do with financial planners? I assumed based on the thread title that OP was in search of a CFP type figure.

Correction: Ok - So what is the deal with the mother's estate? You said your inheritance is riding on him coming out of this OK. It sounds like the house has negative equity, and you want him to suffer (room mate?) so that he can pay off the mortgage with HIS money, and the home sells and you get a piece (25%?).
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Old 03-24-2011, 04:37 AM   #5
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Sorry to hear about your problems.

I assume, as a starting point that your brother is focusing on looking for another job as his first priority and has already cut his expenses as far as possible.

You've already explored the possibility of getting some rental income.

Speaking to a lawyer experienced in debt restructuring and/or short sales may be better than speaking with a financial planner at this stage.

Although a very personal decision, one issue you should be careful about is being asked to co-sign for your brother's obligations or agree to charges being placed over jointly owned assets - that's probably the quickest way to make a bad situation worse and place considerable stress on your relationship with your brother. Incidentially, if you are married or equivalent, it would be a good idea to get your spouse's agreement before providing financial assistance.
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Old 03-24-2011, 06:03 AM   #6
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Thank you all for you consideration and advice. There is no easy way out of this and surely I understand we are not alone in this predicament.

In case I was not clear, as indicated by a remark in response, the house was purchased jointly by my brother and our Mother. So I do not "feel" that a part of it is owed me, but it is in fact officially part of my inheritance - which I would like to protect. I will not be receiving current value of whenever it may sell at profit, but the value at the time of the death. However, if the situation is not remedied it could all be lost - not only my inheritance but the roof over my brother's head. No I don't want to "punish" him for anything - he is my "little brother" and always will be.

BTW neither one of us is married so at least that is one less factor to complicate matters. He is looking for employment and when we'll see each other in April I hope he will be a little more open to a room-mate or renting the entire house for a time.

He could, as easily, find temporary employment in Hungary and here there is a downtown city flat and a country house - so no problem with accommodations.

Again, thank you all for your willingness to help.
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Old 03-24-2011, 06:07 AM   #7
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P.S. another point that may have been mistaken. I am not interested in him selling the house, but rather that he does not lose the house. I'm comfortable getting my share whenever in the future he decides he wishes to sell - so that is not the issue. I don't want the property lost - period.
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Old 03-24-2011, 08:01 AM   #8
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Isadora....I'm still a bit unclear on the technical details of your mothers will and what percentage you own at this time. For the moment, I will assume she left her half to both of you since you say "it is part of your inheritance".

That said, I am curious as to how the house was titled when she and your brother purchased it? Was it as "Tenants in common" or was it "Joint with survivorship"?
How was it left in her will? Was he given a "life right" to live there as long as he paid the mortgage?

What is the current status of the estate and what is happening with the house within that process? Has her portion gone thru a titling change? If so, how was it titled?

Without knowing the answers to those questions....and if her portion or your half of her portion has been retitled to you, have you considered you may be partly responsible for paying your percentage of the mortgage on the part that was left to you? Based on some of the details you provided it sounds like that percentage may be your asset.
You may want to ask a real estate attorney these questions. I would think you might want to make sure you of what your obligations might be in this situation.

That said, your brother clearly needs help with the mortgage. With no income, renting is great solution.

It all depends on the details.
Hard to give you good advice without knowing all the particulars.
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Old 03-25-2011, 01:31 PM   #9
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Basically what we did now is transfer the title entirely to my brother's name. The rest of the figuring was simply done on a handshake - I've also foregone a chunk of the cash in favor of my brother as it was he taking care of Mother during the last three years of her life.

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Originally Posted by sheehs1 View Post
Isadora....I'm still a bit unclear on the technical

Without knowing the answers to those questions....and if her portion or your half of her portion has been retitled to you, have you considered you may be partly responsible for paying your percentage of the mortgage on the part that was left to you? Based on some of the details you provided it sounds like that percentage may be your asset.
You may want to ask a real estate attorney these questions. I would think you might want to make sure you of what your obligations might be in this situation.
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