Q: I want to buy my aunts house in probate. Do I have to purchase it at 90% of the value of the home?
The two heirs are minors and we want to keep the home in the family as they have experienced much loss at young ages. No one in our family is contesting the sale price which is about half of the value.
My father is the personal representative of my aunts estate and is willing to sell the home to me.
A: So, you are paying half value, which means the two minor heirs receive half their inheritance. Meanwhile, you get a house worth twice what you paid for it. The minor heirs lose half their inheritance. To you. I’m not seeing how this benefits them. Are they living in the house? Deed the house to them, in trust, if they are the sole heirs, until they reach the age of majority, so they can continue living there if that’s what you are trying to achieve. Or pay half and deed half to yourself and the other half to them. If the children’s guardian agrees, and the court approves, then it can be done. Depriving minor children of half their inheritance is not going to fly.
Cedulie Renee Laumann agrees with this answer
A:
A personal representative must preserve the estate and the value of estate assets for the beneficiaries / heirs. Assets cannot be sold/given away for less than fair market value since doing so would take money away from the creditors or heirs.
Competent adult heirs can disclaim their interests in an estate and might agree to a sale price lower than the fair market value (assuming all creditors were paid and the court signed off), but this would not be the case with minor children.
There is no 90% rule, though where a related person buys out estate property it may be reasonable to match the net of whatever the same sales price to unrelated parties with real estate agents would net . In other words, if a house is worth $100k and a third party sale for $100k through realtors would have $6,000 in realtor commission and net the estate $94,000 it MAY be reasonable for the estate to sell that same property directly to a relative for $94,000 since the estate gets the exact same benefit.
If someone dies and their children live in their house and there is no cash to pay operating expenses of the house (e.g., taxes, insurance, etc.) it may be reasonable for someone to loan money against the house to cover those expenses.
While not legal advice I hope this general information helps.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
