Options for Buying Out Siblings in the Family Cabin

In Minnesota, it is very common for an elderly parent to own a cabin with which the children associate many fond memories, so that one or more of them would like to keep the cabin in the family and continue to use it. I was recently approached by someone who explained that his father had sunk quite a bit of money into the family cabin, and my questioner (the son) attached much sentimental value to it, but he believed it was encumbered by a substantial mortgage, constituted a large fraction of his father’s estate, and would probably have to be sold to distribute the estate evenly between all the children. He expressed a wish that he could buy out his siblings’ share when his father passes on, but doubted he could afford it. Read More...

What is your personal debt-to-GDP ratio?

I came across a recent writing by the famous Porter Stansberry, editor of a financial newsletter and investor in his own right. By his calculation, “Currently, the total-debt-to-GDP ratio in the U.S. is almost 400%. (Total debt is the combined federal, state, municipal, corporate, and individual debt in the U.S.).” It got me thinking about the financial health of my clients. Do you agree with the idea that you can’t take on credit in excess of your savings? Or are you confident you can rely on expected earnings to service debt you take on? Read More...

Doing Deals with Family

A recent conversation reminded me of the perils of making unwritten deals, especially with family members. A potential client described agreeing to furnish certain monies in exchange—she thought—for certain property interests a family member held. The funds were furnished over a period of time, but when this person approached the family member about holding up the other end of the bargain she thought they had, she was very surprised at the relative’s recollection and understanding of their arrangement. Read More...

Why Act Now on an Estate Plan?

The bottom line answer to “why can’t I put off establishing and documenting my estate plan?” has three parts. First, there is the obvious fact that none of us knows the exact time of our last illness or death; second, given we don’t know that, we should settle these matters while we have the time and energy to do it; and this is because—third—leaving them to the time when our health is failing quickly, or we are already gone, puts a much bigger burden on our loved ones than is necessary, at a time when they are already (if we’ve lived well) grieving our passing. Read More...