Tuesday, July 24, 2012

Downsize, or Double-Down On Real Estate?

Priscilla and Patricia started both living and practicing together in Priscilla’s expanded home in October.  By spring of 2007, we knew we liked it, so Patricia and her husband wanted more than ever to sell their other properties. 

They still owned their house in Plainfield and a vacant ‘dream lot.’  The house had been listed since June without any serious offers made.  The vacant land market looked worse. 

We had to pare down expenses so Patricia’s family could contribute more to the expenses at the shared house/office, because owning all this real estate would not work long.

Downsizing by selling seemed best, but from necessity, we looked into becoming ‘accidental landlords’ by renting out Patricia’s previous house.  Checking out market rents showed we could probably more than cover the house’s mortgage, taxes and insurance.

But the risks and responsibilities of having rental property are not trivial, which Patricia knew well from personal experience.  Plus, we didn’t know how quickly the market would rebound so we could try to sell again. 

Downsizing was the long term solution to making the multigenerational living arrangement work, and rental was only short term with some risk.  We decided to drop our price and continue to try to sell (at least until next month). 

We hadn’t expected this problem.  After all, when we started planning, the real estate market was so hot that we couldn’t risk listing Patricia’s house too soon.  When the unexpected affects your family’s plans, call our office at (815) 436-1996 for an appointment to consider alternatives.  © 2012 Gruber Law Office, Ltd.

Tuesday, July 17, 2012

Liking The Forest, Except For Some Trees

In October, Patricia’s family moved to the addition on Priscilla’s home, although Patricia’s previous home was not yet sold.  In fact, the housing market slowdown was deepening instead. 

Having our three generations live together without really having only shared expenses for one place was like another cost overrun, and our belts were already tight.  Fortunately, Patricia’s husband (a/k/a ‘The Son-In-Law’) liked living at the expanded house more than expected, despite the dire warnings from his friends and family before moving in. 

This new living arrangement was working.  Our lives were enriched, with just enough room for us – Priscilla, Ed, Patricia, Marty, baby Ben, and regular out-of-town relatives, and less need to drive to help one another.  Ben spent hours watching the constant construction, with his grandpa delightedly telling him what was going on. 

Two problems remained, both primarily due to the real estate market downturn. Patricia’s previous house was not sold yet, and her vacant Minooka dream lot (bought during the height of the real estate bubble to use in one of our interim alternate plans) was now a burden, with the vacant land market nearly dead.  Should we rent the house out to wait out the downturn? 

Living multi-generationally exceeded our expectations, but making this sustainable in the long term still needed work.  We needed to consider our options again.  To consider your own family’s planning options as your lives actually unfold, please call our office for an appointment.  © 2012 Gruber Law Office, Ltd.

Tuesday, July 10, 2012

House Selling In 2006

Even with the construction cost overruns for the addition to Priscilla’s home, we could see we would be able afford to live and work here together while both of our families shared expenses. 

But what to do while Patricia was still in her own house paying its expenses was not so obvious.  We were all thrilled with Ben’s arrival April 25 a couple of weeks early, but Patricia and her husband soon realized how much they had to learn about how to care for the world’s cutest newborn.  Moving forward with making construction decisions and selling the house became tougher.

They did manage to list their house for sale in June.  But it wasn’t sold yet, just listed.  And by that time, the housing market was beginning to show strain. 

Sadly, the house was still listed when the office part of the addition was ready for the August office move.  And listed in October when Patricia decided to move to Priscilla’s house without having sold her house. Keeping it ready for showing with the new baby and office move challenges was proving too hard.

It was like another cost overrun.  We were living together without really being able yet to share expenses.  We would have to find a way to muddle through the short term and then adjust our plans again. 

Moving to multi-generational living usually involves the unexpected.  Being willing to revisit the plan when needed is crucial to success. If you wish to decide how your plans might adapt to your own family’s changes, call our office at (815) 436-1996 to set an appointment.  ©2012 Gruber Law Office, Ltd.

Tuesday, July 3, 2012

Where To Put Our Formula?

While watching the construction of the office/home addition to Priscilla’s home in 2006 for Patricia and family, we had a plan in mind other than just adding on space.  We were meant to rearrange home ownership and inheritance. 

We decided on using a formula to do it, which we would base on the mortgage payments and amount of principal loan still outstanding after the older generation’s deaths.  Having a formula determine how much ‘extra’ of the house Patricia inherits after her parents’ death suits us.  [After all, Patricia did do better at equations with variables in them than those using numbers back in algebra, and her sister, Jeanette, is a number-crunching CPA.] 

But where should we put this fabulous, fair, and powerful formula?  We have ownership to the house in a land trust.  And Priscilla and Ed have revocable living trusts detailing how they want their assets at death to pass to the next generation and those near and dear to them. 

The revocable trusts are the most private documents we have in their estate plan, and changing them requires nothing more than writing it up and signing it with witnesses.  No bank or other third parties needed.

Our formula fits neatly in Priscilla and Ed’s revocable trusts.  Such trusts are one way to keep your plans private, even after your death.  To discuss ways to achieve your own family’s goals for your family’s future, please call our office at (815) 436-1996 for an estate planning appointment.  ©2012 Gruber Law Office, Ltd.

Tuesday, June 26, 2012

Private Plan

Patricia’s family and our business would be moving in soon after our office addition onto Priscilla’s home was built.  We planned for shared expenses and mortgage payments followed by an adjustment to the inheritance Priscilla and her husband would leave to Patricia and Jeanette.

But we wanted to stay flexible to allow changes over time while keeping our plans private.  Only we (our family) need to know the details of how it started versus how it may end. 

We decided to have ownership held in an Illinois land trust.  This is something unique to our state.  A bank holds actual ownership of the house as trustee. 

Priscilla and Ed and their own revocable trust are in charge of and are the beneficiaries of the land trust now.  Many changes that might be helpful in the future can be made formally in the land trust by altering the trust agreement held by the bank.  Thus, changes are verifiable with the bank as a ‘disinterested third party’ record keeper, but will not be public, meaning they will not be recorded with the county’s Recorder of Deeds.  

Illinois government does not get everything right, we write with a slight cringe.  But land trusts are a special rule made by the Illinois legislature that can be useful in multi-generational plans like ours – and other situations where privacy is important. 

There are many ways to carry out estate planning goals – and land trusts are a special option for those of us who own Illinois real estate.  To discuss ways to carry out your own family’s plans, please call our office at (815) 436-1996 for an appointment.  ©2012 Gruber Law Office, Ltd.

Tuesday, June 19, 2012

So What Was The Plan?

Over the last few weeks, we’ve been writing about adjusting to the reality during actual construction of the addition onto Priscilla’s house for our office and Patricia’s family. 

Fortunately, the outline of our plan to deal with inheritance questions remained constant.  Only the exact numbers changed as costs rose and time flew by. 

Patricia would share maintenance and most improvement expenses while living there.  She would contribute to the payments on the new mortgage that financed the addition.  Priscilla and Ed would remain sole owners.  After her parents’ deaths, Patricia could inherit an extra percentage of the house, primarily based on the reduced mortgage loan. 

Having Jeanette, Priscilla’s other daughter, in the family is handy, as she is a CPA.  She can crunch the numbers when needed.  Determining and writing up the appropriate formula after the dust settled would be complex, but we knew Jeanette could get the right result and make sense of it when needed. 

And, most important, Jeanette was totally ‘on board’ with the plan.  In fact, she insisted on a more generous calculation of what could eventually be Patricia’s ‘extra share’ in the house.  Her payoff – better peace of mind about her parents living situation and simpler visit planning for holidays. 

Figuring out how to live multi-generationally is not easy, but we are sold on the rewards in our own situation and have seen similarly good situations in some other families.  To discuss the possibilities for your own family’s future, please call our office at (815) 436-1996 for an appointment.  ©2012 Gruber Law Office, Ltd.

Tuesday, June 12, 2012

No Turning Back!

We broke ground on our home office addition in March 2006.  We had much to do – our client work; keep our old office functional; watch the destruction and construction at Priscilla’s house; get Patricia’s house ready for listing, and make sure the baby would have somewhere to live upon arrival. 

It rained quickly after the new basement was poured, creating a temporary lake on the floor.  We discovered an allergy to the glue used in modern plywood and so had to have every side of it sealed with paint to reduce the vapors.  We were not sure where to put outlets or vents, not having the furniture in place. 

Ben was born a bit early without Patricia’s house being listed.  We had budgeted for cost overruns and tried to think of everything, but there were even more.  We had an outline of what we wanted to do between us on the finances, but the rising costs kept forcing us to think again. 

What could we do except keep adjusting?  Things were difficult, but we were moving getting closer to sharing our family’s living resources across three generations. 

Keeping the faith during construction was tough, but it was too late to turn back.  Good thing we were fully convinced the rewards of living together would be worth it. 

Deciding how to live multi-generationally is not simple, and carrying out any plan has the unpredictability that makes life real – requiring flexibility and persistence.  To discuss your own family’s future, please call our office at (815) 436-1996 for an appointment.  ©2012 Gruber Law Office, Ltd.

Wednesday, June 6, 2012


In December 2005, we had to “fish or cut bait.”  We had a nice design for an addition to Priscilla’s home for our law office and space for Patricia and her family to live. 

We confirmed that Priscilla could get the financing to fund the construction, even with the unexpectedly high cost.  It would be a stretch, but it seemed possible. 

Our one builder who bid the job checked out reasonably.  We applied for and worked with the appropriate department for the building permit.  And Patricia’s baby was getting more real by the day.  It was a boy, to be named Benjamin, and the weight and shape of Patricia’s front-side said time was flying by.   

Getting scheduled to start during the construction boom remained a challenge, and the weather was not fully cooperative.  We broke ground March 17, 2006.  Ben was due in less than two months, so Patricia was going to have to try to list her own house for sale while pregnant or just after becoming a first-time mother. 

Since we now were fishing, we needed to put to paper our initial ideas about how to adjust our families’ plans to account for the new reality to come.  Things like sharing expenses, dividing maintenance responsibilities, dividing house space (!), and transitioning ownership of the new combined home fairly over the years to come.  

For help considering and documenting your own plans for multi-generational living, call our office at (815) 436-1996 to set an appointment.  © 2012 Gruber Law Office, Ltd.

Tuesday, May 29, 2012

Design, Then Surprise!

We hired an architect to help us figure out how to plan a possible addition to Priscilla’s home for our law office and space for Patricia and her family to live – hopefully without overshooting our combined families’ available resources. 

It took a year, with many drawings and revisions, but at the end, we had something that might work.  The architect thought that it would be well within budget, but now the rubber would really hit the road.  We needed builder bids.

It was now July 2005.  Building here was BOOMING.  We had been researching possible builders all through our design process.  We had an initial list of four and ended up asking for bids from six different builders. 

We received only one actual bid.  We did not expect this problem.  We had nothing to compare it with, and it was much higher than expected.  Most of the other builders were too busy to bother with such a custom project.  We couldn’t shake a bid out of any others (and we hoped it wasn’t due to being in a profession with an unpleasant reputation).

Meanwhile, a happy event increased the urgency of deciding – Patricia became pregnant in August after years of hopeful waiting.  The third generation was on its way, ready or not.

Should we go for it – could we stretch our budget that far?  And how could we structure ownership and financing? 

Architects and attorneys know that written plans are crucial to good results, so we needed to figure the financial bits on paper, too.  For help considering and documenting your own plans for multi-generational living, call our office at (815) 436-1996 to set an appointment.  © 2012 Gruber Law Office, Ltd.

Tuesday, May 22, 2012

A Home Office For Us?

We couldn’t find the right office to buy in the Village of Plainfield during the height of the building boom around 2005, but we weren’t giving up our quest to make multi-generational living and working what we wanted it to be. 

Maybe we could build an office onto Priscilla’s house west of Plainfield in unincorporated Kendall County.  At one time, it seemed like the middle of nowhere, but not so much now, so we started researching home office options.

We learned that zoning did allow home office use.  Next, we had to figure out if it was financially feasible to build adequate office area and more room for Patricia and her family to live.  

This time we knew we didn’t have enough talent at building design to try to ‘do it ourselves’ by modifying designs in house plan books, which is what we had tried to do to find a perfect retirement home for Priscilla and Ed to build on a vacant lot near Patricia’s house. 

We needed an architect every step of this design to be sure that we wouldn’t destroy Priscilla’s existing home with what we hoped to add on.  We met at the house, explained our budget and goals to fit in with the residential neighborhood with our own families able to live together peacefully, yet still have nice office space.

Figuring out how to live multi-generationally is not easy, but it sure can be rewarding.  To consider your family’s planning options from a legal perspective, please call our office at (815) 436-1996 for an appointment.  ©2012 Gruber Law Office, Ltd.

Tuesday, May 15, 2012

Mother Daughter Break

Sunday was a beautiful day for Mother’s Day.  The three family generations in our house enjoyed our time together. 

Priscilla pushed granddaughter Naomi on a swing and made sure 6-year-old Ben thought of every possible way to roll an uneven ‘ball’ of wood down the slide - to see how far and which way it would go, without undue risk to life and limb.  His scientific conclusions were not important, but doing the experiment, of course, was important. 

Meanwhile Ed and Patricia peeled potatoes and heated up dinner, to be followed with delicious key lime cupcakes (and a few chocolate peanut butter ones for the less adventurous).  Daughter/sister Jeanette and her family stopped by on their way out to pick up their daughter Sarah from her first year of college. 

Back when we were considering adding onto Priscilla’s house for our office and/or living quarters for Patricia, we didn’t even realize how nice it would be to be casual about exactly when each part of a party arrived, because most would be here anyway. 

Sunday was a special occasion, but not complex to set up.  We all saw and appreciated each other without much fuss.

Family occasions are times when many families experiment with new arrangements.  Overnight stays and extended visits can be a bit like ‘dry runs’ for multigenerational living.

If necessity or preference later means your family decides to live multi-generationally like we do, the good and bad of these visits can inform the arrangements.  To discuss your planning options in light of your family’s dynamics and resources, please call our office at (815) 436-1996 for an appointment.  ©2012 Gruber Law Office, Ltd.

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