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.
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