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Comment by nradov | Hacker News Reader

The best resolution is for the parents to sell all of their real estate (and other illiquid assets) before they die and move into an assisted living facility or something. Maybe it's sad to lose the family home but it's sure a lot easier and less emotionally fraught to divide up cash and stocks among the heirs.

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In France, there's also what's called en viager. In this system, a buyer buys real estate and then pays the seller a rent for the rest of that person's life, typically while the person continues to occupy the real estate. Then, when the person dies, the buyer takes the real estate. (In at least one situation that was well publicized, the buyer actually died before the seller.)

https://www.connexionfrance.com/practical/buying-and-selling...

> In this system, a buyer buys real estate and then pays the seller a rent for the rest of that person's life, typically while the person continues to occupy the real estate. Then, when the person dies, the buyer takes the real estate.

We have that in the US, it's called a reverse mortgage. Generally it's large investment companies doing the buying, but I don't think there is any real reason why normal people couldn't do it. The downside is that it's sort ripe for abuse where the large companies doing the buying can take advantage of the elders needing money.

I think what the parent is talking about is called "residential sale leaseback agreement".

Hugh Hefner did this arrangement with the Playboy mansion - https://www.forbes.com/sites/forbesrealestatecouncil/2017/10...

Conrad Black also did a similar deal for his place - https://nationalpost.com/news/canada/conrad-black-sells-2300...

Not quite. If I understand correctly from your links, the person selling the property then pays to continue living there. In the system I described, the person buying the property pays the seller an ongoing fee, and the seller continues to live there.

Really it can be whatever deal you work out. We don't really have laws preventing any sort of arrangement you might want to make.

>In the system I described, the person buying the property pays the seller an ongoing fee, and the seller continues to live there.

That's called a reverse mortgage in the US.

You can have arbitrary contractual arrangements (subject to local law), but the underlying property interests still matter, especially during disputes. I believe in the US a reverse mortgage typically means the mortgager (seller) retains legal title, with the mortgagee (buyer) taking a lien. But I believe an "en viager" is closer to the common law life estate, and in the context of reverse mortgage lookalikes would mean the mortgagee getting fee simple title with the mortgager retaining a life estate. A life estate arrangement was common, I believe, in the US before reverse mortgages became a popular product.

Tax policy incentivizes selling capital assets upon death, rather than while alive.

And if one can live at home rather than assisted living, that's often preferred anyway.

IMHO, the heirs and executor should endeavor to either sell the home quickly or arrange so that only one person inherits it. Group ownership typically devolves into trouble. Although sometimes there's griping about future value changes even though the split was equitable at the time of distribution.

I didn't claim that approach was tax efficient, just less likely to cause disagreements between surviving family members.

I'd also add creating a Trust is relatively easy and the elderly can continue living their life as they normally do. The Trust will then own the house, assets, etc., with distribution instructions included.

In support of the point above, after having to arrange housing and care for elderly relatives in that stage of life, I found assisted living significantly more expensive vs. paying a care agency to have someone live at home in the United States. You get the added bonus of more accountability of a standard of care and ensuring loved ones are being taken care of. Talking to the assisted living facility, it sounded like most of their residents were using insurance.

>I found assisted living significantly more expensive vs. paying a care agency to have someone live at home in the United States.

It really depends on the level of care necessary.

>Talking to the assisted living facility, it sounded like most of their residents were using insurance.

A lot of them don't really take insurance, but they will encourage the residents to spend all their money and then get on Medicaid/Medicare to have the government pay for everything. There is private nursing home insurance but most people don't have it because it's ungodly expensive, especially when purchased when you're already fairly old.

Great points, and devil is in the details. Insurance in this case was Medicare Advantage. In hindsight, Medicare Supplement Insurance (Medigap) would've been the better way to go for that situation and what I have loved ones using now.

Or, they could talk to the kids before death, figure it out, and spell out the details in a will (or place the assets in a trust). Crazy, I know.

Sure, that's great if everyone is on speaking terms and able to have a civil, rational discussion about the subject. But that isn't the reality in many families.

There's no requirement to split the estate "fairly" if the family doesn't get along, so there's no need to talk to everybody - all that's required is leaving a will (or, probably better, a trust, because that avoids probate) that specifies how to split the estate.

You're really missing the point. Leaving a will or trust is fine from from a purely legal perspective but doesn't solve anything for family relationships if the heirs are already on bad terms. Especially if they have emotional ties to certain assets.

> (or place the assets in a trust)

This is key. I wish the elders in my family had done that. You don't even need to have a ton of assets for it to be worth it to protect them that way.

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