Friday, August 01, 2008

An Absurd Problem

Yondalla writes:

Someone said in a comment (sorry, getting back into comments to find out who means hauling my behind out onto those rocks and that ain't happening this foggy morning) that maybe we can come back to Maine again just not stay here.

It is complicated. One issue is just the debt. Though my FIL has bought us plane tickets, we still pay for a great deal of the trip. Until we make headway on the debt we are not traveling far from home.

But it is also true that there is no way we could afford, under the best of circumstances, to rent something as well situated as this. It makes leaving it harder and the reasons for it clearer. The in-laws bought this piece of ocean front property 40 years ago. It is in the northern coast and near nothing. The bad grocery store is 20 minutes away. The closest pharmacy is 45. The point is that 40 years ago this was not highly-prized land. It was cheap. The house they built is small and sturdy. The plans came from a book of simple vacation homes. It is as close to the water as was permitted 40 years ago, which is much closer than today. I sit here in this 40 year old chair, tapping keys on my cell phone and glancing up to watch the waves. It would cost as much to rent this house for a week as it did to buy the land. It is out of our price range.

(Some probably wonder why we didn't choose to rent it. I don't want to go through all the discussions the family had about pros and cons. There were many, and they are finished. The buyer takes possession in September.)

There are other properties we might be able to rent someday, particularly a little house owned by a bunch of cousins. There is no electricity, an old-fashioned outhouse with a box that has to be buried at the end of the trip, no shower or bath, and no view of the water, but it is NEAR the water.

Even if the options were more attractive it would not be the same. It is this house, this spot that we love so. It is on the list of things to do when we get out from under some of this debt. No one thinks it will be the same though.

I realized the other day what a privileged problem this is. We have had a piece of paradise for years. Now it must go. I am grateful for the vacations I have had here. It is far more than I ever dreamed I would have as a child.

Another problem of privilege we face is the proceeds of the sale. It can be quite uncomfortable to be the poor relations, or merely the relations-of-modest-means. The property is owned by a trust of which Roland and his brothers are beneficiaries. The current plan is to maintain the trust after the sale. The details are complicated and under negotiation, and I don't plan on sharing them here. What it all means is that we will be getting little or no immediate help with debt, will have an added and not-insignificant tax burden to deal with as the money is invested and presumably earns dividends. We should however have a (more) comfortable retirement and Brian will have some funds for college.

Roland and I are faced with the issue of how to afford our good fortune. We must find a way to pay off our debt and pay taxes on money we cannot access without the permission of financially comfortable older brothers who do not really understand why we might find it difficult to pay our taxes.

The problem is so absurd it is almost funny. We are going to see a financial adviser to get some advice on making a plan. I know that there are problems so much worse than ours. Still I feel overwhelmed.

We are selling the place in part because we cannot afford the taxes.

It just strikes me as such an absurd problem to have.

4 comments:

  1. I know what you mean. When I was a kid my family started renting a cabin that my dad's friend owned. At first we stayed for two weeks. Then the next summer we did two weeks in the beginning, and two weeks at the end of the summer. Before long, we spent all summer there. We should have realized that -- seeing as the owners rarely went to their own cabin --there was something amiss. One year, my dad's friend called to say he sold the cabin. We were devastated. Actually, my dad was furious that his friend hadn't called him before because my parents totally wanted to buy it.

    I still love it up there and I've rented several different cottages in the years since. (Slugger and I are going next weekend actually.) But the same magic isn't there.

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  2. writing this from the cottage by the sea my parents bought a few years ago. Becuase of that I can imagine how you must feel. I dream of going here with my grandchildren and my youngest is only three!

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  3. Please be sure to see a fee online financial planner, not someone who will get commissions on whatever products they try to get you to invest in.

    I don't know much about trusts, but why wouldn't the trust pay taxes on the dividends AND the income from the sale of the home if that's where all the money resides?I don't understand why the beneficiary of a trust--to which the person has no access to anyway--would have to pay out of pocket for trust income.

    Which reminds me: If you'd like free advice from lots of financially-minded people, I can HIGHLY recommend The Motley Fool discussion boards. There is, in fact, an estate planning board that talks about trusts all the time. (Maybe there's even a trust planning board. There are 100s and I only read a dozen or so.) If the community doesn't have the answer, they can often point you to places that would have the answer. They can help with the "how to get out of debt" part of things, too. I've seen people working on over $100,000 debt (not counting mortgage) hacking away at it and getting advice, and commiseration, and "happy dances" as things are paid off.

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  4. we are making an appointment with a fee-only financial planner. I might go on-line for support, but making the plan has to be something Roland and I do together, and that means an in real life person.

    We will be able to do this.

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Comments will be open for a little while, then I will be shutting them off. The blog will stay, but I do not want either to moderate comments or leave the blog available to spammers.