tl;dr: Best way to get paid to relinquish house to sister, when house is held by me and my sister in a living trust after our mother died. House has no debt.
My sister and I are both in our 50s. Our mother passed away early last year. Her only notable asset was her house, which was held in a living trust; my sister and I are the beneficiaries, and it will go to our respective children upon our deaths. I am the named trustee. The house is paid for and currently worth about $650,000. My sister, I, and the house are all in California.
I am married with two adult kids, and so is my sister. But we took very different paths. I worked a government job and lived frugally, so I was able to retire early and am able to live comfortably with my wife.
My sister, on the other hand, isn’t doing well. She is separated from her husband and has been living alone in my mother’s house for 1.5 years. For various reasons, I don’t see her being able to support herself to the point of moving out and paying rent on her own. I’ve already paid out $15,000 for property taxes and a couple of new appliances to make the place livable for her. I’m actually fine with her staying there until she dies, at which point her interest in the house goes to her kids; and when I die, my half will go to my kids.
But what I can’t deal with is the inevitable interactions I have with my sister because of the house. We’ve never gotten along and still don’t. It’s simply not healthy for either of us to interact, and I have my own problems to deal with in my life. On top of that, I will likely be paying some, if not all, of the house’s property taxes every year.
A couple of weeks ago, my sister proposed this: that she and her two kids buy out my half of the house. I responded that I’d be fine with them paying me just $250,000 (I may tell her I’m fine with just $200,000). So I’m trying to figure out how this would happen.
Her kids are in their early 20s and both working. Would they be able to get a mortgage to buy out my half, and I treat this like I would if we just sold the property to a third party? Do I contact a lawyer or real estate agent to get this done? What’s the cheapest and simplest way for me to quitclaim my interest while ensuring I’m getting paid?