(FORTUNE Magazine) – WITH THE YEAR-END FAST APPROACHING AND MY E-MAIL piling up faster than I can read it, I figured now would be a good time to devote an entire installment of theMoney Manager to reader questions. From real estate to relationships, divorce to diplomas, the issues raised are ones that many of us grapple with sooner or later in life. Here are three questions that come up, in some form, on a regular basis.

● My two brothers and I recently inherited one-third shares of my mother's summer home. I'd like to keep the house in the family, but my siblings want to sell it quickly. Can they just outvote me and unload it, or do they need my approval? If I buy my brothers out, what are the tax consequences? (The house's value has risen dramatically.) And what's the best way to finance such a transaction? Since I live in another state, it wouldn't be my main residence, and I'd probably have to rent it out to cover property taxes and other expenses.

Your situation is becoming increasingly common: Thanks to a skyrocketing real estate market, the family home is accounting for an ever-growing chunk of many inheritances. But when multiple siblings are involved, things can get emotional--and messy--in a hurry, warns Kevin Meuse, a partner and estate-planning specialist with law firm Kirkpatrick & Lockhart. "Once children grow up, they're going to have different financial needs, so co-owning something can be a recipe for conflict," he notes. "That's especially true with real estate, which has a lot of ongoing costs associated with it."

Let's start with the straightforward issues. Generally, if your mother's total estate is valued at less than $1.5 million, you and your brothers will not owe estate taxes. Needless to say, the estate includes the worth of the house, which is counted at its fair market value at the time of your mother's death. (Lest anyone consider low-balling the feds to avoid inheritance taxes, the IRS may require that you supply an independent appraisal.) If, on the other hand, the estate's worth tops that amount, you'll have to pay federal estate tax on the excess and possibly (depending on the state in which your mother resided) state levies as well.

As for who has the right to sell the summer house, we'll assume that your mother's will transferred ownership to the three of you. In that case, most states would allow your brothers to sue you and force the sale of the property. The prospect of years of legal wrangling among family members is one reason Meuse advises clients to set up a separate legal entity, such as a trust or family partnership, to hold the real estate upon their deaths. Parents can then mandate ahead of time the conditions under which it will be sold. They can, for instance, require a cooling-off period of six months before a property is put on the market or dictate that a decision to sell be unanimous. Families should discuss these matters long before anyone is on his deathbed. "Parents need to know what the kids' interests in the property are in order to make a good decision," Meuse says.

If you do decide to buy out your brothers, the three of you can agree on any price you want. But the decision may trigger capital gains taxes. If, for example, the house was worth $500,000 at the time of your mother's death and you buy the house from your (hardball-playing) siblings a year later for $600,000, they'll owe the IRS on their portion of the $100,000 price appreciation. If, by contrast, your brothers go easy and let you buy the house for less than the fair market value, no taxes will be incurred. (Be careful, though: If the discount is too extreme, the IRS may deem your brothers to have given you a present and impose a gift tax.)

When it comes to financing, the IRS allows you to buy out your siblings over time using a so-called intrafamily loan. The feds even permit your brothers to give you a rock-bottom interest rate. But it's usually better to get a traditional bank mortgage (especially in your case, since your brothers seem eager to cash out). "It's cleaner just to separate yourselves from each other," says Meuse. "An intrafamily loan is just one more point of connection that can turn into a problem down the road." Given your one-third equity stake in the property (assuming you can handle more debt), you should have no problem obtaining a mortgage.

Beyond the financial nitty-gritty, don't forget to think through all the consequences of taking ownership of the summer home. Overseeing a rental property, for instance, means running a business. It will likely involve a lot of headaches, not the least of which is finding responsible tenants who will pay the rent on time and treat the home with respect. And since you live out of state, you will probably have to pay someone to help you manage the property, which will put a dent in your cash flow. As with any other type of big purchase, make sure you're comfortable with all the potential pitfalls before you take the plunge.

● I recently divorced and am in the process of updating my will to exclude my ex-spouse. Is there anything else I need to do to make sure that she won't have any claims on my estate?

In a word, yes! You'd be surprised at how little impact your will can have on the disposition of your assets. Changing the document has no bearing whatsoever on who inherits any money sitting in your qualified retirement accounts--including an IRA, 401(k), 403(b), or traditional company pension plan--at the time of your death.

Nor does the will dictate who stands to collect on any of your life insurance policies. For those items--which can run into the hundreds of thousands of dollars or more--the person who gets the cash is the one you named on the beneficiary forms all those years ago. "The beneficiary designation supersedes the will," says Rande Spiegelman, vice president of financial planning at the Schwab Center for Investment Research. "In fact, as long as the beneficiary has a copy of your death certificate, he or she can lay claim to those assets before the will even gets through probate." It doesn't matter how long ago you named the future recipient--a spouse you divorced 30 years ago will get every penny in your 401(k) account if his or her name is on the form. "It happens all the time," warns Spiegelman.

The bottom line: Once you're finished updating your will, go back and check all the dreaded paperwork for your retirement and insurance accounts. Removing your ex-spouse as the beneficiary is usually as straightforward as getting your hands on a new form and filling it out. (And no, you don't need to inform your ex that you've made the switch.) Just don't try that maneuver if you're still married. You can't remove your spouse as beneficiary on a qualified retirement account (other than an IRA) without his or her signed consent.

● On the advice of an insurance agent, I began saving for my 3-year-old son's college education with a variable universal life insurance policy. I'm now having doubts about whether I should continue with the policy. Unfortunately, if I abandon it at this point, I would lose more than half of the $15,000 in premiums I've paid. Should I just keep the policy going? Does it make sense to save for college this way?

"Never," declares Ron Rhoades, an estate tax attorney and director of Joseph Financial Group, based in Hernando, Fla. "Life insurance should never be sold as an investment vehicle--it's just way too expensive for that purpose." Here's why. With variable universal life insurance, part of your premium payment goes into a tax-deferred investment account, which you can later tap to pay for your child's college expenses without incurring taxes or penalties. You can also borrow against the cash value of the policy to pay for college, again with no tax consequences. That sounds fantastic--until you consider that the stiff fees associated with this type of insurance frequently knock the stuffing out of your investment returns. What's more, any amounts you've borrowed against the policy will reduce the benefit your heirs receive if the loan is still outstanding when you die.

You can get the same tax advantages at a far lower cost by investing your money in a low-fee 529 college savings plan or a Coverdell Education Savings Account. Meanwhile, Rhoades recommends that you meet your insurance needs with a term policy, which is available for a fraction of the cost of variable universal life.

The question of what you should do if you already are using such a method to save for college is much murkier. If you cancel the policy, as you noted, you will be slapped with a steep surrender charge. Your best bet at this point is to have the policy analyzed by someone who understands insurance but doesn't sell it. For instance, James H. Hunt, an actuary with 40 years' experience in the life insurance business and the former insurance commissioner of Vermont, has partnered with the Consumer Federation of America to perform such evaluations for a modest fee (ranging from $55 to $75, depending on the type of policy; see www.consumerfed.org). "The old adage in life insurance is that it's sold and not bought," Hunt observes. "People who buy these things usually have almost no understanding of what they're really getting into."

In some cases, says Hunt, it might make sense to hang on to a variable universal life policy until the surrender charge tapers off. But that will depend on how much extra you are paying each year in insurance costs vs. a cheaper term policy. If the difference is steep, it might make sense just to pay the penalty and move on. You'll more than make up the difference in the long run.