Determining Acceptable Value of Inherited Real Estate?

[newbury]

If I asked you to oversee the improvement of one of my houses for free, you'd tell me what?

He'd probably say yes.

 

[ericm979]

I was able to change my work hours to start at 4 am and would be a moms everyday to fix lunch and stay until after dinner when she retired for the evening.

Mid 2018 is when I began spending the night in my old bedroom which continued until she passed in 2023 with home hospice care in full force… hospital bed, catheter, supplemental oxygen, etc… at the end.

This web site will censor the word I originally used in this reply. Here's the toned down version:

Your siblings should be bending over backwards to make you happy after all that you did. It sounds like they have enough money that an extra $100k each or whatever additional the place MIGHT bring when its fixed up aren't all that important to them. The work you put in was worth far more than that. Putting mom in a home would have cost $100k per year or more, and the comfort of having her son care for her was priceless.

Not knowing anything else about your siblings they sound like very greedy people. Maybe it's the real estate agent instincts kicking in and they're not thinking of the whole situation.

I dealt with both of my parents aging and their estates (which were not worth much) while my sibling did nothing except trying to tell me what to do. I no longer have much of a relationship with them because of it. Hopefully your siblings come to their senses and it doesn't result in that for you.

I'm sorry you have to deal with this.

 

[buckeyefarmer]

good luck and do what you think is best.

 

[2manyrocks]

Fiduciary duty is a narrow path to tread. Trustees must follow the written terms of the trust. A typical bypass credit shelter trust ends at death of the surviving spouse with distribution of assets to follow as soon as the fiduciary can reasonably wind up the trust.

Using $100K of trust funds of which 1/3 probably beneficially belongs to Ultrarunner to fix up the mom's house for resale likely isn't authorized by typical trust terms. Asking Ultrarunner to effectively use his own funds to run up the value of the house against his interest seems like a real stretch to me.

Executors must follow the written terms of the will and only have as much power as granted by the will. What can/cannot be done with real estate depends on the will and California law.

Probate/Trust judges will sanction fiduciaries who engage in wheeling and dealing with fiduciary assets. Might even remove them from office if things go wrong.

It could be that the Executor's only duty here is to distribute the home to the 3 siblings and then each owns a 1/3 interest. I doubt the 2 siblings can force Ultrarunner to improve the home for resale as trustee, executor or individual owner absent some trust/will provision to this effect.

I'm not kidding when I say fiduciary duty is a narrow path to tread. People have difficulty comprehending the legalese in trusts and wills. Hence the need for an independent estate/trust attorney to give competent advice what the rules are, and do not rely on an attorney associated with the siblings.

 

[riptides]

Fiduciary duty is a narrow path to tread. Trustees must follow the written terms of the trust. A typical bypass credit shelter trust ends at death of the surviving spouse with distribution of assets to follow as soon as the fiduciary can reasonably wind up the trust.

Using $100K of trust funds of which 1/3 probably beneficially belongs to Ultrarunner to fix up the mom's house for resale likely isn't authorized by typical trust terms. Asking Ultrarunner to effectively use his own funds to run up the value of the house against his interest seems like a real stretch to me.

Executors must follow the written terms of the will and only have as much power as granted by the will. What can/cannot be done with real estate depends on the will and California law.

Probate/Trust judges will sanction fiduciaries who engage in wheeling and dealing with fiduciary assets. Might even remove them from office if things go wrong.

It could be that the Executor's only duty here is to distribute the home to the 3 siblings and then each owns a 1/3 interest. I doubt the 2 siblings can force Ultrarunner to improve the home for resale as trustee, executor or individual owner absent some trust/will provision to this effect.

I'm not kidding when I say fiduciary duty is a narrow path to tread. People have difficulty comprehending the legalese in trusts and wills. Hence the need for an independent estate/trust attorney to give competent advice what the rules are, and do not rely on an attorney associated with the siblings.

Excellent post.

 

[2manyrocks]

Maybe it's the real estate agent instincts kicking in and they're not thinking of the whole situation.

They might be counting on Ultrarunner to not only go above and beyond as usual, and not only for free, but against his own financial interest and against his personal connection to his Mom's home so the home can be sold for top dollar to whomever instead of it staying in the family.

From a fiduciary viewpoint, a trustee cannot engage in speculation with trust assets or make expenditures not authorized by the trust terms. If UR makes an unauthorized expenditure to improve the mom's home, the real estate market could drop or some contractor could really foul up the improvements leading to a loss of trust assets for which UR would be responsible from a liability viewpoint.

If the trust says it ends at death of the surviving spouse, it's time for distribution. Period.

The same issues apply to an Executor. Follow the terms of the will. Period.

The only safe option for a trustee/executor is to exactly follow the terms of the trust and the will, and never think for a second he can do things with fiduciary assets that aren't expressly authorized by the written terms just because the beneficiaries want it done like they want it done. That's not how wills and trusts operate.

And even if by some wild stretch of imagination some California court authorized the Executor to improve the property, the probate court can only do this with estate funds because the trust funds are by design not part of the probate estate.

Even if the court authorized UR to improve the property, UR could decline to serve as Executor or resign leaving the siblings to deal with the improvements and/or handle the estate administration.

If the property ends up passing to the 3 siblings as co-owners, then there could be a deadlock where the 2 would have a lot of problems trying to improve or sell without UR's approval. If the deadlock persists, their recourse is to file a partition action to sell the property.

An independent lawyer might be the one to get the message to the siblings that UR can't be expected to work against his own interests so they might come to understand that they ought to just take the offer and be grateful for it.

 

[deezler]

Yikes. I agree with others that your siblings must be forced to consider the real VALUE (emotional and financial) that you caring for your mother provided for all these recent years. You have the moral high ground if it comes to real argument.

I live local to my 75/74 year old parents and can see an ever-escalating path of me caring for them. My sister lives across the bay from you in south San Fran and only visits back to Michigan once or twice a year. Hopefully future estate settlements wont be a fight with her, she's quite nice and well off.

 

[riptides]

.... You have the moral high ground if it comes to real argument.

....

Real arguments don't give a crap about who has the moral high ground.

Someone will always bend the efforts to satisfy their present situation.

Not being snarky, but it will not mean anything to a lawyer.

 

[deezler]

I meant in a calm and rational chat between loving family members, not in a court of law. But you are absolutely right!

 

[BigGG]

I am at least 99 and 44/100ths % with 2manyrocks

I was recently co-executor, with one of my 4 sisters, of my father's (surviving spouse) estate. Fortunately, my sisters are more reasonable than OP's and the attorney who had drawn up my parents' wills was available to steer us through.

I would encourage you to establish an estate account, if you haven't already and with your attorney's concurrence, to handle all estate costs. These are not your personal expenses. Keep good records. Distribution of that account should be the last action.

I would also discuss with the attorney the exact mechanism of the house sale. Our attorney, as I understand it, had us distribute the house to the five siblings. Then all five had to sign the closing papers. In our case, that was not an issue, other than the logistics of out-of-state paper/notary handling. But in OP's case, it might be.

To OP: you've bent over backwards in the past for your family. It's time to determine what's right, get your attorney's concurrence, act and let the chips fall where they may.