Fair sharing of estate among children after Real Estate deal

It seems like Bob's advice of gifting the son a portion of the property as a down payment would be ideal. He could then get a bank loan for the additional portion which would go to you to build the ADU. Then update your will to state that each of the other three children each get $XX (the value of the gift you gave son 1) and after that all other money is split equally four ways.

Being open with all your children about this from the start can also help. My mother has given each me and my sister large gifts at various points and those are in an email thread between the three of us so my sister and I know how to divide anything (if there is anything) after my mother passes.

Is it possible to have the property split? Current house and some land and put the rest of the land on a new parcel on which you build the new ADU/house? Then you can sell the current house at fair market value to your son. You own the new building and land that can then be left to all of your children. If you son needs assistance in purchasing the property, you can do a separate loan or if you want to gift it, you can make accomodations in your documents. We had a client that gave money for a house purchase to one of two children put in their documents: "...the first $300k goes to child #2 to account for the house gift, and then everything above that is split 50/50..." This was stated to both children at the time and both knew it and there were no issues with it when the parent passed.

I'm not a lawyer, nor am I giving advice, but as I see it, splitting the property now is one of the best ways to into going forward. I don't know your family dynamics, but let's say you pass in your sleep while living in the ADU and your son & family are in your original house. All on one big property with your ADU and many acres. How do the other 3 (plus the 4th's partial share) get their money? Will it be easy to split at that point? But what if you ran utilities off the other house because it was you and your son was fine with it. Will that still work selling to another (presumably non-familial) person? Or what if you build 20 feet away because you're Grandpa, but then would anybody else be interested in buying the house that close? Will there need to be major changes to accomodate a sale? All that seems much easier to look at in the beginning, than in the end. And worst case in a family sense, what if some of your children don't want to mess with what ever it takes to split things apart for a sale and start pushing for a sale of the entire property, your son's house included in whatever way it is entangled in everything. I just see too many ways this could get messy moving forward without splitting now, or at least discussing with professionals about splitting or not.

You definitely need to talk to some professionals! Each state in the US may have different laws on this (and note: they may also change over time). This is about enough dollars to make it worth spending some money on this to get it right.

Some potential hiccups:
1. It could be possible that you gift this son some money now in return for a smaller share of the future inheritance, but when the actual inheritance comes, there is no or very little money left (expensive health issues, theft, living much longer than expected, or any other issue which depletes a portfolio). So think about how to make the chance of that as small as is possible. Hopefully professionals point this out as well and maybe have some ideas on how to handle this.

1. Communication with all of your children is key here, I think. Are they feeling like you're favoring this one son (and his kids)? Or are they happy for all of you that this is an option? Did one of the other kids perhaps at some point want to live in this house (even though they don't have as many kids?).