My father died about 25 years ago, leaving me and my siblings a certain percentage of the lake home and property equaling 100%. At the time of death the property/home was paid for. My brother bought out 6 of the 8 siblings' shares. He now owns 95% and wants to buy my 5%. Is this 5% of the worth at the time of my father’s death or the current worth?

My sister is currently using the lake place and pays taxes, etc. My brother would like to tear the place down and build a home for him and his family. I have not used the place much over the last 25 years. At the time of my father’s death the property was worth about $20,000. Now it’s worth around $300,000.

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    Someone should improve the title. This question isn't about inheritance per se and certainly not about lakes. Question body is well phrased and clear, I upvoted, just to be clear.
    – Nobody
    Jun 15, 2020 at 11:22
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    Serious questions: what is your brother's reason for buying your final 5%? Does he want to sell the property? What benefit have you received from your share over the last 25 years, and can you fairly describe that as more or less than you should expect from 5% ownership? (For example, let's say neither of you have spent any time there, and you just rent it out. Do you get 5% of the collected rent? More? Less?)
    – chepner
    Jun 15, 2020 at 13:12
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    @chepner That's why market value and appraisers exist. The value of the 5% shouldn't be based on the sibling's reason for wanting to fully own the lake house.
    – MonkeyZeus
    Jun 15, 2020 at 13:48
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    Your brother owns 95%, you own 5%, and your sister pays the taxes? Why is your sister in the mix? Jun 15, 2020 at 18:55
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    @MichaelRichardson Sounds like they have a financially stable family dynamic in which the brother allows family to stay there as long as they pay for the taxes and upkeep in lieu of actual rent. Presumably the sister is only there temporarily and the brother would like to construct his "forever" home in that location.
    – MonkeyZeus
    Jun 15, 2020 at 19:13

7 Answers 7


Shared property is tricky when agreements aren't made up front, but the right answer in a situation like this is basically whatever you agree to. That said, you own 5% of the property, not 5% of what it used to be worth. I would encourage you not to dismiss the value of that equity over all these years. If you had gotten 5% of the value 25 years ago you could have saved/invested it and increased it several-fold.

The three factors to consider are time value of money (all the interest you could have earned if that equity wasn't tied up in the house), contributions each of you have made over the years, and benefit each of you have received over the years (rent, or usage of the property).

The time value of money concept makes 5% of current value the logical starting point, but from there it might make sense to adjust up or down based on contributions made and benefits received.

For 25 years have you been paying 5% of the upkeep/property tax/etc? Have you gotten 5% of the benefit of owning the lake house?

If your brother has gotten 100% of the benefit of owning the property for 25 years, but has also paid 100% of the expenses then 5% of current value could be fair. If you've gotten some benefit out of the house without contributing all these years then maybe less than 5% of current value is fair. If you've contributed to upkeep all this time and not gotten much benefit from owning then 5% of current value could be too low.

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    OP might also want to consider the familial aspect of the investment along with the unit cost. If they play hardball and end up in an acrimonious spat with their family members, is there a cost associated with that in terms of their wellbeing? Maybe better to accept a fair but low offer than to push hard for more.
    – Valorum
    Jun 15, 2020 at 8:05
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    "If your brother has gotten 100% of the benefit of owning the property for 25 years, but has also paid 100% of the expenses then 5% of current value is likely fair. " This is only true if the brother has paid 5% of the rental value (or opportunity cost) over all these years to OP.
    – base64
    Jun 15, 2020 at 11:43
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    @base64 Maybe, but without contributing to the upkeep getting 5% of rental value seems excessive. 5% of net rental income would make sense.
    – Hart CO
    Jun 15, 2020 at 13:30
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    @Valorum: +1000 for your comment. This is the most important aspect IMHO. I've seen a few families (and part of mine) get torn part over a few % of inheritance. Jun 15, 2020 at 16:59
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    @MadPhysicist That feels pretty greedy if the brother is taking on all the expense of rebuilding. Most likely the rebuild only happens if the brother owns 100% of the property, so OP wouldn't realize that benefit if they held out. Of course they could use the brother's desire to rebuild as leverage to extract a higher price, but again, feels greedy.
    – Hart CO
    Jun 16, 2020 at 13:23

Technically it is worth what you are willing to sell it for and what he is willing to buy it for. Failing that, it is worth the current market value. If you were going to buy a home, and the you said to the sellers "Hey this property was valued at 25% less five years ago, I would like to pay that price". What would they tell you? They would tell you to get lost.

So the starting point is 5% of current market value. Depending upon your relationship with him, and many other factors the price can be very different. You can and should not be bullied into selling the price at the time of your father's passing.

You may choose to sell at that price just to have this out of your life.

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    My sister is currently using the lake place and pays taxes, etc. My brother would like to tear the place down and build a home for him and his family. I have not used the place much over the last 25 years. At the time of my father’s death the property was worth about $20,000. Now it’s worth around $300,000. Jun 15, 2020 at 13:56
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    @JCWilliams is your brother offering $1000 for your share? Are you okay with that? Since you have not used the property much 10-12K sounds about right for your share.
    – Pete B.
    Jun 16, 2020 at 14:05
  • @JCWilliams We might be able to help you with finding out what decision is most financially beneficial to you. But we can not help you with finding out what's most beneficial for your relationship with your siblings.
    – Philipp
    Jun 16, 2020 at 15:05

Let’s make a slight change: instead of your brother buying your share, I’ll buy the whole house at market price, give 95% to your brother, and 5% to you. In each case you should get exactly the same money.

If your brother insist you should get paid 5% of $20,000 then you offer to pay him 95% of $20,000 obviously.

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    I was going to say the same thing. If the brother values 5% at $1,000 dollars, then apparently he thinks his share is worth $19,000. If presented to him that way it may clear up his misunderstanding of the situation. If the real issue is the family dynamic then that is another issue, but the finances of this are clear cut
    – Kevin
    Jun 16, 2020 at 21:17
  • I was going to answer exactly this. Sadly this is the least voted answer at this time. A suggestion is to ask the brother how much he thinks it's worth, while knowing that market value is the right price to start the negotiation. If he suggests 5% of the original price, try to use this argument. Either he'll get to his senses, or if he insists on 5% of the original price, make up some reason to say you're not interested, because something isn't right.
    – swineone
    Jun 17, 2020 at 1:52

Surely the simple answer is 'market value'. But this isn't an open market. It's a very small market, probably consisting of just you and your brother. No-one except him is interested in buying your 5%. So the price is what he'll pay and you'll accept. Period. 'Fairness' doesn't come into it.

If your 5% interest is blocking his ambitions for the property in some way, you could use this to push the price up. Only you (and he) can decide the point where being businesslike turns into being a b*****d about it, and whether estrangement from your brother is worth the game.

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    +1 This is a point I don't see in other answers. Surely nobody else but op's brother would be interested in buying 5% of a property, unless that 5% was large enough to use it as a separate property. Which doesn't seem the case since OP's brother seems to need the whole property in order to build a house. So whatever is the price for the whole property, 5% is only worth what anyone else is willing to pay for the 5%.
    – Gnudiff
    Jun 16, 2020 at 5:15
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    The only way it could be worth the full 5% of the market price of the whole property was if the property was sold as a whole and each got his share. I don't know about the US, but down here it is possible to force ending of joint ownership by going to court, which then puts the property up for auction as a whole.
    – Gnudiff
    Jun 16, 2020 at 5:28
  • Also worth considering that finding a buyer on the open market typically has a nonzero investment of time and money in hiring a realtor, preparing the house to be shown, etc. Selling a property to a ready buyer today is more valuable than selling the property for the same price 6 months from now after putting in 6 months of effort in trying to sell the house. Jun 17, 2020 at 19:26

If you were to instead sell the house would your brother expect 95% of $20,000 or 95% of $300,000?

You currently own 5% of a house worth $300,000 and any payout you get for that ownership should be based on the actual value.


Note that 5% of what it was worth 25 years ago in today's dollars may be more than 5% of its current worth. $1,000 in 1995 is worth about $1,729 today.

Say the house was worth $100,000 in 1995 and it's worth $1,000,000 today. If it was worth $0 today, say it burned down or was discovered to have toxic waste that would cost more than the value of the property to remove, would your brother still be willing to pay you 5% of $100,000 for it?

I don't think he would. Do you?

You took the risk that the value would drop over the past 25 years. You are entitled to the benefit of taking that risk if it went up in value.

That said, you should take into account the fact that this is your brother and take into account the value, and condition, of your relationship with him.

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    My sister is currently using the lake place and pays taxes, etc. My brother would like to tear the place down and build a home for him and his family. I have not used the place much over the last 25 years. At the time of my father’s death the property was worth about $20,000. Now it’s worth around $300,000. Jun 15, 2020 at 13:55
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    @JCWilliams Then really your share is worth $15,000. You'll have to take into account factors such as your need for money, your brother's need for money, your relationship with him, and so on. But you would be being perfectly reasonable insisting on $15,000. Jun 15, 2020 at 14:16
  • @DavidSchwartz: What if OP’s brother paid 100% of all the taxes, repairs, enhancements etc. for 25 years?
    – Michael
    Jun 16, 2020 at 6:46
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    @Michael that's not really relevant to how much the share of the property is worth now. It may be relevant to the ultimate settlement the siblings come to as part of the buyout (to avoid lost feelings). But investors who buy into property funds don't take things like whether or not they have paid sundries into account (they haven't). The brother, I assume, wants to buy out their sibling now because they don't want their sibling having a 5% interest in the home they will be building on the property (which is any land and buildings on that land).
    – illustro
    Jun 16, 2020 at 10:37

The answer to your question is 5 % of the current market value. All the other issues mentioned are emotional baggage. That doesn't mean you can't consider them. Maybe since you aren't too personally invested in the property and your brother spent a lot of time effort and money, you are emotionally satisfied with accepting 4 % or 3 %, or perhaps you feel cheated out of 25 years of fair use due to family dynamic, and would be more comfortable with 6 %. That's up to you and your brother. But your question was which year is the 5 % based on, and the answer is the fair market value of the property at the time you decide to sell your stake.

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