Interesting Will Situation, asking for ideas
So I have an interesting situation and want to get people's ideas on how to best deal with it and how to work with everyone involved to structure the will that we will have to do in a few years.
Wife and I bought 4 acres of land recently in rural Alberta ($325k) and will be building our new house there (~$700k). We are allowed to have a secondary dwelling up to 1600 sqf on this land and plan on moving my parents over to our land in a few years and get them a house build there as well. My parents are on board, but here comes the problem.
My parents have always intended to split inheritance 50/50 with my sister. They don't have much as they immigrated here in their 40s, but they do own their home which is about $400k give or take. In a standard situation, obviously we both get 50% of the inheritance and move on, but things will change if we sell their house and use the proceeds to build a new house on our land. Let's say the new house construction will be $400, as they don't have much more than that.
My problem now is my sister. I never wanted anything from them and try to help them as much as I can, and given that they gave me an opportunity in Canada I am doing pretty okay overall myself and never relied on any inheritance, however, my sister is a bit different. She is 4 years older but never really found a good career path that pays well, and well, naturally to her the inheritance is basically part of her retirement plan as she said.
Looking for ideas on how to deal with the situation. Basically a $400k house sitting on my land, it will be under my title, but built with parents money for them. Not sure what kind of arrangement we can make that is fair for everyone when the inevitable comes. The house has value obviously when it's build, but it's build on "foreign" land that my sister has no claim to. My sister suggested we do a guaranteed amount of money based on when the house is built, but that's not very fair to us as the house might depreciate, will require maintenance, and well we can't be expected to fork over $200k at a moments notice, and I can't guarantee the house will carry that value. What makes the most sense to me is if/when we sell the whole parcel of land + both houses on it, we can give her 50% of appraised value of that one house at that point in time, from some independent appraiser.
I don't know, it's still a few years away, but it's never too early to star thinking about this so that we have lots of ideas and options to go to the lawyer with to make this all official. Looking to see your opinions!