Determining Acceptable Value of Inherited Real Estate?

[2manyrocks]

At most the estate attorney is supposed to provide legal advice on behalf of the estate, but in my personal experience, estate attorneys don't generally want the boat to rock or be the lawyer in the firm who ticked off a real estate client who brings a lot of revenue into the law firm over an estate that didn't go like they wanted with a much smaller fee.

Once you get boxed in, your options diminish. Go get independent legal advice before you make decisions that limit your options.

I don't care whether they like it when the trustee distributes easily divisible and distributable assets. If the trust is done, what reason does the trustee have to withhold distribution? If the stock market takes a dive in the meantime, I'd rather they have direct ownership and responsibility for investing their own stock, not the trustee for any time longer than necessary to wind up the trust. If there is some contingent tax liability that has to be worked out, that's a different situation.

Sometimes fractional ownership interests can be placed in a different entity for management and liability purposes following termination of the trust. Another approach is to distribute it directly and let each beneficiary rock their own baby, especially if the one guy who has been doing all the work is tired of working for everybody else.

 

[ultrarunner]

The suggestion is a LLC for the fractional ownership of commercial property for all of the above reasons.

I’m in process of preparing 2023 returns and will have more up to date info once complete.

 

[MossRoad]

The suggestion is a LLC for the fractional ownership of commercial property for all of the above reasons.

I’m in process of preparing 2023 returns and will have more up to date info once complete.

Why don't you tell them you'll buy it from the estate now at the appraised value and you'll give them 2/3 of anything over what you originally paid the estate when you sell it in the future or the whole thing when you die?

It's speculation for sure, but it's on you, not them.

You pay (for example) $1,000,000 to the estate for the house.
All three of you get $333,333,333 from the estate.

In 5 years, you sell it for $1,300,000.
All three of you make an additional $100,000.

or

You croak, and they sell it and get $500,000 each (or more or less, but it's still gravy), on top of the $333,333 they already got!

or

In 5 years, the bottom falls out, you sell it for $500,000, so none of you three get any additional money then, but the $500,000 is in your estate along with all your other investments and such, and you've said they're the beneficiaries of the estate, so they still get way more than if they'd have sold it to a 3rd party originally.

I just don't see why they don't sell it to you at the appraised value now knowing you're going to leave it to them in the future?

I'd be tempted to throttle them.

Listen, we're all getting $333,000 now from the estate if I buy the house. If I sell the house later at a profit you'll get even more. If I don't, you'll have to wait until I croak, but you two or your children are going to get a whole lot more VS me just leaving my entire estate to a charity. If you force me to sell it to a 3rd party, you'll only get $333,000 PERIOD!

IT'S A NO BRAINER!!!

Use the big stick with the big carrot.

Good luck. I know family business can be trying.

 

[ultrarunner]

I like the way you think as I’m here paying a few bills at the house tonight.

Doubt it would fly but worth a try.

At this rate I will be working at least a few more years…

I’ve been number 2 seniority at work for a few years… when folks retire I remember when they started working here.

Opps… wrong thread about being old.

 

[MossRoad]

I like the way you think as I’m here paying a few bills at the house tonight.

Doubt it would fly but worth a try.

At this rate I will be working at least a few more years…

I’ve been number 2 seniority at work for a few years… when folks retire I remember when they started working here.

Opps… wrong thread about being old.

Between your investments that you've mentioned over the years and the profit from the eventual sale of your mom's house, they stand to lose way more than the additional money they'd make from fixing it up and seeing what it'll sell for VS just letting you buy it at the current price and risking losing your generous gift.

Of course, that could drive a bigger wedge of resentment into the mix. But in all seriousness, they should be thankful for having a brother like you.

 

[quicksandfarmer]

Siblings say hire someone to clear out the property, spend $100,000 fixing it up over 3-4 months will increase the value from 975k appraised as is to maybe 1.3m California values.

So this would achieve a hypothetical 1.1m net or a 125k above the appeal price.

200k is estimated fixing, commissions, etc.

That doesn't sound like an attractive deal. Adjust for risk and the cost of project management and the expected return is essentially zero. If your siblings are in the RE business they should know that.

 

[quicksandfarmer]

Are you the executor of the estate ?

What are the terms of the will as to how the assets of the estate are to be disposed of, in terms who gets what ?

As they used to say on Columbo, "That, Detective, is the right question."

 

[ning]

When my grandmother passed, she left one of my two uncles as the executor; the will just stated that the estate was to be split three ways (my mother & her two brothers).

The executor-uncle got everything valued and split things by value, without cashing everything out; my Mom felt she came up short but not enough to fight it; she also pretty much expected that from that brother. After a few years they were ok again.

IMO there's no good answer; ultra is screwed any way he does this. Stick to the letter of the will but don't go out on a limb trying to make the others happy because you'll come up short and if you're anything like me it'll leave a bad taste in your mouth.

Get multiple assessments of the property value, average them, tell your siblings how much they'll get. Are they going to waste a good sized chunk of the estate because they didn't get to speculate? It's on them to abide by the will, and if they refuse, they're the ones breaking the family goodwill.

 

[mikester]

The executer has responsibility to the estate. Not the benefactors.
In one scenario all the OPs deeds can be ignored or discounted by simple words of "your choice" from other beneficiaries. Meaning past support and deeds have no bearing on the estate as of the now.

If mom wanted her estate dealt with by a consensus then she would have appointed all the beneficiaries as trustees.

Instead she selected the one person whom she felt was competent and would make the best decisions according to her beliefs and wishes. Remember that

My condolences to you and I'm sorry to hear about your troubles.

 

[Sigarms]

If mom wanted her estate dealt with by a consensus then she would have appointed all the beneficiaries as trustees.

Instead she selected the one person whom she felt was competent and would make the best decisions according to her beliefs and wishes. Remember that

End of the day, without an explicit will or trust set up spelled out on exactly how everything is to be done, the BEST the executor can hope for is peace in the family.

Luckily for myself, when my dad passed, I was an only child and he and my mom set up a trust 25 years ago with everything spelled out. When dad passed, no probate, quick and easy.

My aunt who passed around 2010 didn't have much money and rented an apartment. No will, but very limited money for people to fight over. She left me the executor living over 400 miles away. It was kind of a horror story with a laywer, and lots of family fighting for what possessions she had. End of day, IMO you need to act like ****** and do what you think is right for the one who left you as the executor and spell it out for everyone.