Dear Jeanne & Leonard:
I own a home, which I’ve rented to one of my children for over 10 years. She’s always paid the rent on time, and the place has not been trashed. “Rebecca” now believes she’s entitled to some equity in the house because she’s looked after it and even done some work on the place — staining the decks, for example. Meanwhile, I’ve paid all the routine expenses — taxes, insurance, maintenance, etc. — except for electricity. Also, I’ve paid for a new roof, had the house painted and repaired the fences. If I did give Rebecca a third of the equity in the home, would she still be entitled to a share of the remaining two-thirds of the value of the house as part of my estate (which is to be divided equally among my children)? By the way, I give her a big break on the rent. So I’m also wondering, does Rebecca actually deserve any equity?
— Uncertain, Sacramento, California
Not in our book. Since when is a tenant who “looks after” the house she rents automatically entitled to equity in the place, much less a tenant paying sub-market rent? Keeping the property in good repair is what tenants are supposed to do; they don’t get medals for it. You may, to be sure, have good reasons for wishing to give your daughter equity in this house. But nothing you’ve said suggests that she “deserves” it.
As for your first question, the answer is “yes.” You should consider, however, just how equally your estate will in fact be divided, should you hand over a substantial chunk to one child before you die. And consider as well what message you’d be sending to your other children if Rebecca ends up receiving more than they do.
Dear Jeanne & Leonard:
A while back, my neighbor told me he’d inherited his great-grandfather’s gold pocket watch, which he knew was valuable but didn’t want. So as a favor, I agreed to sell it for him in my antiques shop. It finally sold last week, and my neighbor was delighted with the money. But now he’s asked me to sell some earrings and a necklace that his wife inherited. I’d prefer not to. I don’t have much display space, plus I don’t want her jewelry, on which I’d make nothing, competing with my inventory of estate jewelry. What should I do?
— F.S., Pennsylvania
Count your blessings he hasn’t asked you to sell a dining-room table and chairs.
Seriously, all you can do is nicely but unequivocally say “no.” Since he appears not to understand how much he’s asking of you, nicely explain that, while you were happy to do him a one-time favor, you’re not in the consignment business, your display space is limited, and selling his wife’s jewelry would cost you sales. Also, if you can, direct him to a consignment shop, auction house or dealer who might be interested in it. But whatever you do, don’t buy the jewelry and resell it in your store. Your myopic neighbor sounds like the type of guy who might not understand why you’d mark it up.