Willingly forfeiting inheritance

Not sure this is a real post, but I'm in a similar situation. My family built a small portion of a neighborhood in London that is now down to a handful of minor buildings due to generational mismanagement and a damning tax code that wiped out most of the wealth far before I was born. The principal value of the estate is in the freehold, but all of the buildings are on a 100-year leasehold with further revolving income from ground-floor retail in two particular buildings on the high road. As the winner of the genetic lottery and eldest son, I legally own the freehold while my two siblings have a respective 25% interest in any revolving cash flow stemming from the estate.

Your first priority is to establish what obligations you may have to other family members, regardless of what you do with the land. For example, you may have a property with the following characteristics:

  • Size: 10 acres
  • Value:USD$10,000,000 ($1mm per acre)
  • Tax: $100,000 per year
  • Owners: 7 (~15%)

If you keep the land as it is, you must pay the government $15,000 per annum just to keep the property as-is. That doesn't make much sense. Should you be able to sell it or figure out how to make money from it as-is, the cost of owning the property would justify its annual operating expense unless you're committed to spending a large sum for the sake of tradition. This is your decision. Keeping the property intact is a perfectly respectable option, but you also have to bear in mind that it is burning a large hole in your pocket that may exceed the cost of capital gains and inheritance tax over your lifetime.

You ultimately need to retain the services of a financial planner (preferably fee-based) and a commercial real estate broker who can further help you maximize the sale or lease of a property. The latter is obviously preferable as it gives you annual revenue, but in your case it sounds like it may not be possible without significant investment, i.e. building a series of vacation homes. If I were you I'd sell your interest in the property to your family, especially given that you now live overseas.

/r/financialindependence Thread