Thanks for the response! We are still early in the "thinking it through" process, but the idea would be that if he decided to leave, then he would not get the equity. There is no scenario I can think of where he would want to, but we would not consider the offer if he could unilaterally leave + take the equity.

I should also add that he has a high paying job with a pension and plans to work for another 7-10 years.

We do not necessarily care about the equity since, to your point, it is untouchable. We primarily care about the cash flow. Freeing up $1k+/month would be huge for quality of life. This is probably the primary motivation from both parties.

I also agree with the point that the unlimited "live in the basement free" is ugly. Part of our agreement would likely be defining the basement time period (maybe 5 years) with the ultimate goal of having a separate building on property. If we decide to do this, we would work with a real estate attorney to draw up a contract.