help me think through this financial situation

[chocolate-chip chooky]

My parents are aging quickly, and my sister and I are thinking through all the Big Questions.

My parents own two houses - the one they currently live in and the one my sister currently lives in.

It's pretty likely that we would need to sell a house to fund them moving into residential care.

So, it might end up that in x years we have a situation where my sister and I jointly inherit one house; the one she lives in and has lived in for decades.

She loves the house. She's invested a heap of time, energy and money into making it her home.

But she pays my parents well below market-level rent; possibly even halfish market value. Ideally, she wants this to be her forever home.

What are the financial options for us if this eventuates?

Here are a few options we brainstormed so that she could stay living there:

- she buys out my half (financially unlikely)

- I buy out her half (possible?) and she rents from me (she wouldn't be able to afford market value though)

- we stay as co-owners and come up with something equitable 

 

The third is mostly likely really, but it's the 'something equitable' that we have no clue about. 

We'd like to think this is years and years away, but really, who knows. 

I'm open to all possible ideas, so that we have options to discuss.

[Myra]

Do your parents have a will?  If not, it is time for them to make a will to make their wishes known about the house situation and any other financial/estate decisions including trusts, etc. 

[wintermom]

I agree with @Myra. Both these houses belong to your parents. I would strongly encourage them to make a will now, if they haven't already. 

[chocolate-chip chooky]

10 minutes ago, Myra said:

Do your parents have a will?  If not, it is time for them to make a will to make their wishes known about the house situation and any other financial/estate decisions including trusts, etc. 

Yes, they do have a will. All inheritance will be split evenly. 

My sister and I have EPOA, so financial decisions fall to us these days.

[SKL]

Assuming the will is "share and share alike" for all assets ...

I would probably opt for keeping your share legally but letting your sister live there and pay you rent (up to half of market value rent).  If your sister can't afford half of market value rent, I'd let that go.

[regentrude]

Could she buy you out over a long period of time by paying her monthly rent to you? 

[chocolate-chip chooky]

Just now, SKL said:

Assuming the will is "share and share alike" for all assets ...

I would probably opt for keeping your share legally but letting your sister live there and pay you rent (up to half of market value rent).  If your sister can't afford half of market value rent, I'd let that go.

By 'let that go' do you mean that she pays what she can afford?

I expect this is our most likely outcome.

[SKL]

Will your sister continue to pay that rent to your folks while they are in a care home?  It might make sense for her to put that rent into some sort of account to be included in the inheritance (officially or unofficially) when the time comes.

[chocolate-chip chooky]

Just now, regentrude said:

Could she buy you out over a long period of time by paying her monthly rent to you? 

That's a great idea to add to our list of options. Thank you.

We will be seeing a financial advisor together soon to talk about financial decisions for our parents, so we can discuss this as well. 

[SKL]

1 minute ago, chocolate-chip chooky said:

By 'let that go' do you mean that she pays what she can afford?

I expect this is our most likely outcome.

Yes, that is what I mean.

[chocolate-chip chooky]

Just now, SKL said:

Will your sister continue to pay that rent to your folks while they are in a care home?  It might make sense for her to put that rent into some sort of account to be included in the inheritance (officially or unofficially) when the time comes.

Oh goodness. We hadn't thought of that. Her rent goes into one of our parents' accounts that currently we use to pay their daily expenses. 

[chocolate-chip chooky]

My sister and I are on very good terms. We're a great team. We both absolutely want the best for each other.

But we saw our very close father and uncle have an incredibly surprising falling out when our grandmother died and inheritance decisions came up.

We want to think ahead and avoid that.

 

[chocolate-chip chooky]

5 minutes ago, regentrude said:

Could she buy you out over a long period of time by paying her monthly rent to you? 

The thing is though that her current monthly rent is probably approx half market value. I'm not sure how much this matters, if at all.

 

[SKL]

FWIW, my dad's sister is living in the house they inherited together decades ago.  The original thought was that she would sell her other house and buy my dad's share out, but that never happened.  (I don't know if she still owns that other house as a rental or what.)  There's no bad blood or anything afaik.  It's anyone's guess how much longer either or both of them will live.  In the grand scheme of things, the house is definitely not worth fighting over from my dad's perspective.

[kbutton]

Is what your sister can pay enough to keep up the property, insure it, and pay taxes on it? I think that matters as not being kept up ears away at the long-term value.

5 minutes ago, chocolate-chip chooky said:

The thing is though that her current monthly rent is probably approx half market value. I'm not sure how much this matters, if at all.

IDK what is most equitable when fair market value comes into play. She’s getting a big discount vs. an actual payout. Deferred gains from possessions that appreciate are harder to be equitable about, IMO, if the use of those things in the meantime is meant to help someone in the short term (including one’s self—we pay mortgage far below market value for our residence and will never get that back until we die or sell, though we might get loans against the equity we build, but that also lessens the value our estate gets in the end).

I like the idea of a slow buyout or sort of reverse mortgage to you.

If there needs to be a “down payment” for that, or you need to do some work to the house that she can’t afford outright, maybe some of the other assets that you split evenly should come your way.

I think whatever you do, it’s good to sort your feelings now and be realistic about your own financial needs. We are never supposed to count on an inheritance, but that doesn’t mean one couldn’t be life-changing.

[Ausmumof3]

Im assuming someone else is going to inherit the house the currently live in? Or will it go to pay aged care costs? I guess if you and your sis are half owners she would only need to pay you half the rent? Does she get rent assistance at the moment, and will that be impacted by owning an asset? I think my answer would also depend on your family’s level of need. Ideally I’d leave the arrangement as is but with you taking over where your parents left off, but if your own finances are right that might not work.

Edited June 23 by Ausmumof3

[chocolate-chip chooky]

Just now, Ausmumof3 said:

Im assuming someone else is going to inherit the house the currently live in? Or will it go to pay aged care costs? I guess if you and your sis are half owners she would only need to pay you half the rent? Does she get rent assistance at the moment, and will that be impacted by owning an asset? 

We are expecting that we'll have to sell one house to fund aged residential care. Our parents are self-funded retirees and will get little or no government assistance, so the money will need to come from an asset.

If my sister and I are co-owners of the remaining house, it makes sense that she'd only pay me half the rent. But her current rent is only about half market value, so I'm not sure if this matters a little, a lot, or not at all.

And no, she doesn't get rent assistance. 

[chocolate-chip chooky]

5 minutes ago, kbutton said:

Is what your sister can pay enough to keep up the property, insure it, and pay taxes on it? I think that matters as not being kept up ears away at the long-term value.

IDK what is most equitable when fair market value comes into play. She’s getting a big discount vs. an actual payout. Deferred gains from possessions that appreciate are harder to be equitable about, IMO, if the use of those things in the meantime is meant to help someone in the short term (including one’s self—we pay mortgage far below market value for our residence and will never get that back until we die or sell, though we might get loans against the equity we build, but that also lessens the value our estate gets in the end).

I like the idea of a slow buyout or sort of reverse mortgage to you.

If there needs to be a “down payment” for that, or you need to do some work to the house that she can’t afford outright, maybe some of the other assets that you split evenly should come your way.

I think whatever you do, it’s good to sort your feelings now and be realistic about your own financial needs. We are never supposed to count on an inheritance, but that doesn’t mean one couldn’t be life-changing.

Yes, this.  I absolutely want her to stay in her home and be financially stable. But I also can't 100% predict my own future or financial stability. 

[regentrude]

25 minutes ago, chocolate-chip chooky said:

The thing is though that her current monthly rent is probably approx half market value. I'm not sure how much this matters, if at all.

So how long would it take her at that rate to compensate you for half the value of the house?

Do your parents own the house outright or is there a mortgage? Market value doesn't seem terribly relevant in this scenario. 

Edited June 23 by regentrude

[EKS]

If the only thing you and your sister are going to inherit is the house your sister is living in, and you want her to be able to continue living there, I think that you're going to have to simply live with the fact that you will be a joint owner and she will be paying you rent at half the market rate (which, as you pointed out, would be a fair rate).

Unfortunately, this means that your half of the inheritance is tied up indefinitely.  If your sister outlives you and stays in the house until after your death, you will never benefit from any appreciation, though your heirs might.  This may not seem like a problem now, but it definitely could down the road.

Could your sister get a mortgage for half of the value of the home?  Would that be comparable to half of the market rate for rent?

[Lecka]

If you were in the United States I would say your parents should see an estate planner and consider making some gifts to your sister while they are still alive.  Then maybe after they die, you get a higher amount than she does. 
 

Is there any guarantee that they won’t spend into more of the inheritance while they are still alive?  
 

They might want to give your sister this house or something, because whatever reason they have been renting it to her below market rate, might be something they want to continue. 

[TechWife]

Are your parents competent? If so they should be included in any financial planning conversations. It’s their money, after all. ETA: Even though you have POA. IME, POAs are easily revoked. The POA means you can make decisions, not that they can’t make decisions. Unless you are their conservator (granted in court and usually requires person to be incompetent to handle finances), they can go behind you and undo every decision you make and everything you do. They still have a say in what happens.

Are you in the US? It varies by state, but it’s likely they will be expected to sell the second home to pay for their nursing home expenses. They can only retain one home and then only if one of them is living in it in order to qualify for Medicaid long term care coverage. If they wish for one or both of you to have the house, it needs to be put either deeded to you now or placed in a trust now. A local attorney can advise you what is appropriate for your state. There is a Medicaid “look back” period for asset transfer, and it will still count as an asset for the purposes of determining Medicaid eligibility during that time. This is because they are assuming your parents sold it and have money, or they are just trying to hide the asset so that they don’t have to pay out of pocket for their care. Additionally, depending on what state you live in, the state could take possession of the house to pay for their care. 

Funding assisted living is done out of personal assets, so they may need to sell that second house if they wish to remain in assisted living once their other assets are exhausted. Assisted living is very expensive, and that plan assumes they will both be healthy enough to remain in assisted living and not need to move to skilled nursing. 

Be wary of financial advisors. They are often selling products that they earn commission on and represent what is best for them and/or the companies they work for. We worked with an elder care attorney, which we paid for by the hour until we did a retainer, which was relatively  quickly. 
 

ETA - they should have separate wills, not a joint will. It makes everything easier when it comes to probate. 

Edited June 23 by TechWife

[wintermom]

4 hours ago, chocolate-chip chooky said:

Yes, they do have a will. All inheritance will be split evenly. 

My sister and I have EPOA, so financial decisions fall to us these days.

I'd look into the will and look at the nitty-gritty details, like what happens when/if only one passes away. Who in the executor in that case and what happens to the assets. That's more likely to happen first. If that is sorted, it might be easier to envision what happens when the second parent passes away. 

Edited June 24 by wintermom

[gardenmom5]

Yes, your parents need a will - the situation is complex enough I would strongly urge you to have an estate attorney work through the situation, preferably one with real estate experience or access to a colleague with real estate experience.

bottom line, you want to make sure you parents are cared for,  and that no one is taking advantage of them.

these are the situations you find out what people are really like.  My brother, unexpectedly (I guess I really was naive), made things 100 worse than they needed to be while I was trying to care for our mother.

[TechWife]

1 hour ago, TechWife said:

Oops sorry!

Edited June 23 by TechWife
Oops

[Clarita]

2 hours ago, chocolate-chip chooky said:

If my sister and I are co-owners of the remaining house, it makes sense that she'd only pay me half the rent. But her current rent is only about half market value, so I'm not sure if this matters a little, a lot, or not at all.

This only matters if it matters to you. 

There's not "have to" in terms of how much either of you inherit; there is only "want to" and how you might feel should one thing happen or another. I'd sort that out. How would you feel if sister just inherited the whole house (yes that is an option too)? How would you feel if one of the other less desirable options are the ones selected? Then ultimately which one might break your relationship.

FWIW when this question came up as the in-laws were drawing up the will. DH and I asked for BIL to be the sole inheritor of the house. We didn't trust him to keep up with all that might be necessary to keep it and don't want to be liable if certain things fell through the cracks for whatever reason. (But that's our situation with our unique people involved.)

[chocolate-chip chooky]

Thanks everyone. I really appreciate your input.

I'll read through it all a bit later and respond then.

Thank you 🌻

[Arcadia]

3 hours ago, chocolate-chip chooky said:

The thing is though that her current monthly rent is probably approx half market value. I'm not sure how much this matters, if at all.

 

My single aunt gets to stay in my oldest aunt’s home if she pass. So my oldest aunt’s will stipulate that the home would be sold and split equally among her four children when this single aunt pass. 
However, your sister is probably close to you in age so it might be tricky for her to continue renting at current terms until she pass because she might pass before you. 
 

If she is going to inherit half the house, then paying half the market rate for rent would like paying rent for your half of the house when your parents pass. 

[KungFuPanda]

I’ll bet your sister and parents aren’t thinking in terms of current or future market value. If they’re thinking of your sister “renting to own” the house, how much of it has she already purchased? How much value has she added over the years? Do your parents have a mortgage or is it paid off? Is the amount your sister pays a fair amount given what the house payments are/were? Thinking of your ‘half’ in terms of what the house is worth on the market today or in ten years (with zero prior investment on your part) might not be the most realistic way to frame it in your mind. Would you be happy with the house going to you or your children when your sister passes? What if your parents left it to you with the stipulation that your sister lives there for the rest of her life? 

[TheReader]

Everyone's made very good points already, but I would add one other detail to consider/look at when planning what your sister pays for rent on the home in the future -- and this may or may not apply, since it's your parent's 2nd home, but just in case -- will the property taxes be affected when ownership passes from your parents (who may receive an over 65 cap or discount on the taxes/taxable value), to your sister? (or are you/your sister already also over 65?). You don't need to answer that out loud here, but just to think of. Would the rent she pays be enough to cover the home insurance, the taxes (at any possible adjusted rate when ownership changes), etc?   Those are the factors I'd use to decide what's fair for her to pay. 

Also, in calculating the buy-out, could you credit her the time/sweat equity she's put in, the money she's put in, etc. to make it a nice home for herself? Maybe y'all can calculate a value to those things and apply that to her "payment" to buy you out, if that's the way you decide to go.

[SKL]

Another factor could be how the house passes when your sister dies.  If she agrees to leave it to you / your heirs, then some of the house value is yours even if she is living in it during her life.

[klmama]

Look into how you and your sister would be taxed if you both inherited the home she's living in. She may owe less capital gains tax due to living in the home, but it could still be substantial for both of you, depending on if the step-up basis loophole applies.

[Jaybee]

Yeah (in agreement with some of these last posts), I'd want to make sure that the house wasn't draining from me. I.e., if I wanted her to be able to continue to live there, etc., I would want the rent (or just for her) to cover the expenses like insurance and property tax so that I didn't have to put out money to cover them. And I'd want the plans for future inheritance of the property upon her/my death to be spelled out clearly somehow. If that were done, then I think I'd value her contributions to the improvement and upkeep of the property as toward the "rent." (Not specifically line by line, but in general.) I mean, I "think" that's how I'd want to do it.

[Myra]

It won't hurt to consult an estate attorney - usually first consult is free.  They are used to these type of situations and might offer several viable alternatives that your parents/family/sister/you might benefit from - 

[TexasProud]

Honestly, in your shoes, I would just let her have the house.  Then you get whatever else is left unless for some reason it equals more than the house is worth.  But I would let her have the house. Then I would take whatever money, sale of cars or whatever else.  Not sure if your parents have life insurance.  My dad's was helpful to pay for his funeral.  Even though he didn't have much, I was surprised by how much it really was financially.  So you might be surprised.

That said, you also don't know what care might be needed and the one house might not be enough.  I can't remember the time frame that they can look back 5 years maybe.  But they might want to go ahead and sell the house to your sister.  I know she cannot buy it for what it is worth, but maybe they could figure out a selling price where her mortgage would be equal to what she is paying.  I mean in a way, she has already paid down a deposit with all the rent she has already been paying.  At least that is how I would look at it. That way it gets out of the estate.  But again, if you are looking at having to sell everything to pay for their care before Medicaid kicks in, they will look at stuff like that for a certain amount of years, which is why I said do it now rather than later.  But consult an estate attorney.  

But again. Stuff isn't important to me.  I would rather my sister have the house and be comfortable than get "my" money out of it. 

[QueenCat]

17 hours ago, chocolate-chip chooky said:

The thing is though that her current monthly rent is probably approx half market value. I'm not sure how much this matters, if at all.

 

You mentioned that she's put money into the house, in addition to the rent. Is she paying for all or most of the maintenance? If so, that should count for something as well.

[chocolate-chip chooky]

22 hours ago, EKS said:

If the only thing you and your sister are going to inherit is the house your sister is living in, and you want her to be able to continue living there, I think that you're going to have to simply live with the fact that you will be a joint owner and she will be paying you rent at half the market rate (which, as you pointed out, would be a fair rate).

Unfortunately, this means that your half of the inheritance is tied up indefinitely.  If your sister outlives you and stays in the house until after your death, you will never benefit from any appreciation, though your heirs might.  This may not seem like a problem now, but it definitely could down the road.

Could your sister get a mortgage for half of the value of the home?  Would that be comparable to half of the market rate for rent?

My sister and I haven't even contemplated what the situation would be down the track when one or both of us dies. 

Like several people have said, we need to consult an estate lawyer and/or financial advisor. We are way out of our depth.

[chocolate-chip chooky]

22 hours ago, TechWife said:

Are your parents competent? If so they should be included in any financial planning conversations. It’s their money, after all. ETA: Even though you have POA. IME, POAs are easily revoked. The POA means you can make decisions, not that they can’t make decisions. Unless you are their conservator (granted in court and usually requires person to be incompetent to handle finances), they can go behind you and undo every decision you make and everything you do. They still have a say in what happens.

Are you in the US? It varies by state, but it’s likely they will be expected to sell the second home to pay for their nursing home expenses. They can only retain one home and then only if one of them is living in it in order to qualify for Medicaid long term care coverage. If they wish for one or both of you to have the house, it needs to be put either deeded to you now or placed in a trust now. A local attorney can advise you what is appropriate for your state. There is a Medicaid “look back” period for asset transfer, and it will still count as an asset for the purposes of determining Medicaid eligibility during that time. This is because they are assuming your parents sold it and have money, or they are just trying to hide the asset so that they don’t have to pay out of pocket for their care. Additionally, depending on what state you live in, the state could take possession of the house to pay for their care. 

Funding assisted living is done out of personal assets, so they may need to sell that second house if they wish to remain in assisted living once their other assets are exhausted. Assisted living is very expensive, and that plan assumes they will both be healthy enough to remain in assisted living and not need to move to skilled nursing. 

Be wary of financial advisors. They are often selling products that they earn commission on and represent what is best for them and/or the companies they work for. We worked with an elder care attorney, which we paid for by the hour until we did a retainer, which was relatively  quickly. 
 

ETA - they should have separate wills, not a joint will. It makes everything easier when it comes to probate. 

We're in Australia.

My sister and I both have EPOA, and we are now at the point where we are making their decisions for them - financially, medically, logistically etc.

Thank you for the word of caution re financial advisors. We'll definitely keep this in mind, thank you.

[Clarita]

3 minutes ago, chocolate-chip chooky said:

Like several people have said, we need to consult an estate lawyer and/or financial advisor. We are way out of our depth.

That's a good idea. There are a lot of tax implications that are location specific and based on some of that stuff what you can or want to do might change from even your most ideal situation. 

Like for our situation depending on how the house is actually inherited, the person who receives the house may have to pay taxes on the "amount" the house is worth, the house may be reassessed for property taxes and so the annual/monthly amount to keep the house may be different than the amount current owners are paying, etc. Part of the reason we just said give the entirety of the house to BIL in our situation is because I don't want to be the bad guy that says you can't afford this house we have to sell it. (It's not altruism I don't care about material things on our part.) 

[chocolate-chip chooky]

7 hours ago, TheReader said:

Everyone's made very good points already, but I would add one other detail to consider/look at when planning what your sister pays for rent on the home in the future -- and this may or may not apply, since it's your parent's 2nd home, but just in case -- will the property taxes be affected when ownership passes from your parents (who may receive an over 65 cap or discount on the taxes/taxable value), to your sister? (or are you/your sister already also over 65?). You don't need to answer that out loud here, but just to think of. Would the rent she pays be enough to cover the home insurance, the taxes (at any possible adjusted rate when ownership changes), etc?   Those are the factors I'd use to decide what's fair for her to pay. 

Also, in calculating the buy-out, could you credit her the time/sweat equity she's put in, the money she's put in, etc. to make it a nice home for herself? Maybe y'all can calculate a value to those things and apply that to her "payment" to buy you out, if that's the way you decide to go.

We're in Australia, so some of the terms many of you are using aren't familiar to me. I assume that what you call property taxes is what we call rates.

That's a very good point that we should consider if rates would vary if/when ownership changes. Thank you for this.

The time, energy and money my sister has put into the house over the time she's been there is significant. It will definitely need to be factored in.

 

[TechWife]

8 minutes ago, chocolate-chip chooky said:

My sister and I haven't even contemplated what the situation would be down the track when one or both of us dies. 

Like several people have said, we need to consult an estate lawyer and/or financial advisor. We are way out of our depth.

Leaving property & other assets to children sounds so simple at the outset. The reality is so very different. I'm glad you're going to talk to someone about everything.

While you're researching, find out what your sister's legal rights to residing on the property are. In the US, there are "squatters rights," and anyone who has lived somewhere more than the minimum amount of time to be considered a visitor, has legal rights, which include not being evicted without warning and requiring the legal channels to be used to do that. You'll also need to know what the homeowners insurance policy stipulates about properties that aren't owner-occupied. All of this is likely to play into the decision on how to transfer ownership & who to transfer it to once your parents die.

[chocolate-chip chooky]

7 hours ago, klmama said:

Look into how you and your sister would be taxed if you both inherited the home she's living in. She may owe less capital gains tax due to living in the home, but it could still be substantial for both of you, depending on if the step-up basis loophole applies.

Good point. Thank you.

[chocolate-chip chooky]

6 hours ago, TexasProud said:

Honestly, in your shoes, I would just let her have the house.  Then you get whatever else is left unless for some reason it equals more than the house is worth.  But I would let her have the house. Then I would take whatever money, sale of cars or whatever else.  Not sure if your parents have life insurance.  My dad's was helpful to pay for his funeral.  Even though he didn't have much, I was surprised by how much it really was financially.  So you might be surprised.

That said, you also don't know what care might be needed and the one house might not be enough.  I can't remember the time frame that they can look back 5 years maybe.  But they might want to go ahead and sell the house to your sister.  I know she cannot buy it for what it is worth, but maybe they could figure out a selling price where her mortgage would be equal to what she is paying.  I mean in a way, she has already paid down a deposit with all the rent she has already been paying.  At least that is how I would look at it. That way it gets out of the estate.  But again, if you are looking at having to sell everything to pay for their care before Medicaid kicks in, they will look at stuff like that for a certain amount of years, which is why I said do it now rather than later.  But consult an estate attorney.  

But again. Stuff isn't important to me.  I would rather my sister have the house and be comfortable than get "my" money out of it. 

At this point, we have no way of knowing how much of our parents' assets will be used for their final years' care needs. We fully expect to have to sell one house, and possibly even both.

Another complicating factor here is that my sister and I make our parents' financial decisions for them. We can't rely on their input at all, and we have to be very careful to make wise and fair decisions. If my parents sold the house to my sister, for example, that would actually be me and my sister making that decision. And it wouldn't just be the decision to sell. It would be the decision of price as well. It is all potentially quite messy.

We will definitely consult an estate lawyer, so that we have all options laid out for us.

I'm not a 'stuff' person either, and I really want my sister to be secure. But realistically, I can't predict my own financial future or security either.

[TheReader]

1 hour ago, chocolate-chip chooky said:

We're in Australia, so some of the terms many of you are using aren't familiar to me. I assume that what you call property taxes is what we call rates.

That's a very good point that we should consider if rates would vary if/when ownership changes. Thank you for this.

The time, energy and money my sister has put into the house over the time she's been there is significant. It will definitely need to be factored in.

 

Oh, I didn't realize! 

Here (in the US)(specifically in TX, this varies by state in the US), we pay taxes on owned property (such as houses) annually, based on the assessed value of said property.  In my state, the county assesses what value they feel your home is worth, based on size, age (of the home), location, condition, and other things. Then we pay a percentage (small) which is based on that value; this gets paid each year. 

Homeowners who live in their home can get a "homestead exemption" which limits the amount  of the assessed value that can be taxed.  Homeowners over age 65 can get an additional limit put on which caps their rate (or something similar; we aren't there yet, so I've not looked into it in detail).  Hopefully that helps clarify what I meant! 

[Melissa in Australia]

When my grandmother died a couple of years ago she had in her will that the guy living with her was to be able to live in her house for the rest of his life and at his death the house is to be sold and decided between her 4 children. It also stated in the will that he had to be up keeping the house, including paying the rates. If he got a new partner in that time it was stated then he has to move.

The issues that have a arise so far... Nobody knows if he is up keeping the house or paying rates. There is a probability that he won't and maybe eventually the house will be taken by the city to pay back rates. 

He is younger than my grandmother's children so big possibility he will outlive them

He is an absolutely abnoxious person so nobody wants to check to see if he is up keeping the house

I am not sure who is holding the title to the house. I think it might be in a trust for the moment.

 My grandmother thought she was making everything straightforward. But rather it is pretty messy 

Edited June 24 by Melissa in Australia

[Melissa in Australia]

Another thing to consider is land tax. Victoria has just whacked land tax on any property you personally aren't living in. So if you have a share in another property then you pay land tax on it, even if someone is living in it.  This is on top of rates. About $1000 per property. So if your sister is living in a property that you part own you would have land tax. She wouldn't as it is her primary residence. 

I don't know if your state has started land tax yet, I think Qld might have 

Also possibly both of you will be paying rates. 

[Melissa in Australia]

Just another thought 

If your sister was to be paying you rent then you will become her landlord and therefore be subject to all the landlord stuff ,fix maintenance issues , pay half water rates, do whatever the latest gov requirements that they keep dreaming up for landlords to pay for and do