Q: Forclosure auction on property that is in a Trust, my 5% inheritance is in jeopardy. Estate Rep is doing nothing.
My Aunt died 7/2015. I am to receive 5% of estate. Everthing was in a Trust, the executives are 2 of my older siblings (both are attorneys in NY) I need advice on a Flagstaff property (she put in her trust 2006) being auctioned off on 12/21/2018. The mortgage, also from 2006 for $270,000 was not paid for and the house’s current estimated value is $410k-$430k. The situation is complicated because of another brother who sold my aunt the house also lived in the house (but was specifically cut out of my Aunt’s will.) thinks he should get money. The only people allowed to distribute assets have decided to let the foreclosure auction happen (both attys) because they don’t want to fight a court battle with the disinherited brother. I don’t want to see my 5% get auctioned off and/or lose potential profits.
A: If the house is auctioned for more than is owed, then the excess proceeds should be turned over to the trust. You would still receive your share from those excessive proceeds. The downside is that houses usually sell for less than at auction than they would in a private sale.
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