Now it gets complicated

[questionforall]

My mother's house is in probate, 5 siblings involved, one living there and not paying rent. He wants to keep his name on the home but has not shown the others he is responsible. No one wants his name to stay on the home. Three others want part ownership as well. Only two can afford it. This is getting complicated. Can two of us just force the buyout or do the others have to agree? Two would love to just "become" owners of the house but one doesn't work and the other, like I said can't even pay rent and the bills. There is a mortgage left on it and other debt involved wth the estate. Can they insist on retaining their portion of the house?

 

[LdiJ]

My mother's house is in probate, 5 siblings involved, one living there and not paying rent. He wants to keep his name on the home but has not shown the others he is responsible. No one wants his name to stay on the home. Three others want part ownership as well. Only two can afford it. This is getting complicated. Can two of us just force the buyout or do the others have to agree? Two would love to just "become" owners of the house but one doesn't work and the other, like I said can't even pay rent and the bills. There is a mortgage left on it and other debt involved wth the estate. Can they insist on retaining their portion of the house?

Whoever is the executor of the estate is responsible for ensuring that all of the debts of the estate are settled, before distributing any portion of the estate to the heirs. The executor of the estate has the right to sell the house if its necessary to do so to settle the debts.

 

[nextwife]

Agreed.

Are there other creditors? Is there a mortgage? Can the estate creditors be paid off WITHOUT selling the property?

Sandi

 

[questionforall]

Yes to the creditors

There is a mortgage and some smaller credit card debt which I have enough to pay off from the life insurance money she left. She left me as benificiary.
The mortgage is also assumable as long as the house gets transfered to a child or parent. The problem is out of all of us, only two are responsible enough to maintain the house or have income/credt profile sufficient to have the mortgage transfered to. Basically the one who lives there now is living free (excpet that the estate will get paid back the fair market rent for living there from his procedes of the inheritence-which he has been told) and I assume plans on continuiung that trend once the house has his name on it. I would just assume that the two repsonsible enough to maintain the house keep thier name on it and exclude the two that can't/won't pay get baiught out, the 5th only wants to be bought out anyways.

Which is my dilemma. Not sure if we (the two responsible enoughs) can say to the others (the irresponsible ones) that they can not keep their name on the house because they will not be willing or are incapable to help with the maintainence or even pay rent if they live there, or even because their credit is aweful and the house may get attached some of their debt. Legally I suppose they do not have to agree to be bought out, however,


how does one protect a property from inheriting debt from irresponsible benifactors.


How can this be handled?

 

[tranquility]

"Handled"? What do you mean. The house belongs to all. It can be distributed and those who object can sue for partition. Or, depending on the state, partition can happen in probate.

As long as the executor gets professional advice and does not do their act to benefit one heir over another, he does whatever he thinks best. If the only thing preventing distribution of the home is the other heirs thinking one is not responsible, I'm thinking the executor might very well be in breach if things are not moved along and distributed soon.

 

[nextwife]

The life insurance is not part of the estate, and should not be used to pay the estates debts.

You need to consult with a legal professional. Owning property requires covering maintenance costs, possibly sewer and water costs, property taxes, special assessments. Siblings should not be thrown into unsustainable co ownership with no provisions for how such expenses will be handled and who will pay them, etc. Personally, selling and splitting procceds is the best way to handle it. Any sib(s) that wants to keep it should pay the other sibs for their shares. Talk to an attorney.

 

[questionforall]

this is what I mean

First off, tranquility. The executer is actually the administrator since there was no will and probate is still in the waiting phase, there has been no "delay" in distribution. I am the adminstrator and yes, I have a lawyer. And I am not trying to "breach" anything. He just said to me to let him know what is going on with the house.
Which I have been wondering what to do. I came here for thoughts and ideas. I have had the house appraised for fair market value. It is a family home, no one wants to see it sold. I also don't want to argue over who can or can not live there. Not trying to "favor" one heir over the other but the fact remains, some of the "heirs" are not responsible enought to hold ownership with the others. So the one who lives there free of charge and most likely plans on doing the same is allowed to do so? Because he owns 1/5th of the home, the other 3/5 should foot the bill for all his living expenses and for maintaining the home so he can continue living free of charge? I'm confused. The siblings that WANt to cover the maintaining of the house, taxes, repair bills, etc...simply don't want to do this while 2 others sit back and don't pay. No one is being "thrown" into unsustainable co-ownership. The problem is that the ones that can NOT sustain the co-ownership WANT to stay on the house and the two that CAN afford the house don't want to see it lost to bad choices but want nothing to do with co-owning it with the others.
So do we just sit at the table and say, this is the cost of the house, who wants in? Of course the ones that want in would pay the other's off for their shares, that is not my question really.

 

[LdiJ]

First off, tranquility. The executer is actually the administrator since there was no will and probate is still in the waiting phase, there has been no "delay" in distribution. I am the adminstrator and yes, I have a lawyer. And I am not trying to "breach" anything. He just said to me to let him know what is going on with the house.
Which I have been wondering what to do. I came here for thoughts and ideas. I have had the house appraised for fair market value. It is a family home, no one wants to see it sold. I also don't want to argue over who can or can not live there. Not trying to "favor" one heir over the other but the fact remains, some of the "heirs" are not responsible enought to hold ownership with the others. So the one who lives there free of charge and most likely plans on doing the same is allowed to do so? Because he owns 1/5th of the home, the other 3/5 should foot the bill for all his living expenses and for maintaining the home so he can continue living free of charge? I'm confused. The siblings that WANt to cover the maintaining of the house, taxes, repair bills, etc...simply don't want to do this while 2 others sit back and don't pay. No one is being "thrown" into unsustainable co-ownership. The problem is that the ones that can NOT sustain the co-ownership WANT to stay on the house and the two that CAN afford the house don't want to see it lost to bad choices but want nothing to do with co-owning it with the others.
So do we just sit at the table and say, this is the cost of the house, who wants in? Of course the ones that want in would pay the other's off for their shares, that is not my question really.

Realistically what you are talking about is not logical. It is not logical to keep the home instead of selling it and splitting the proceeds. I understand that it is a family home but how do you invision this working in the long term? Will none of you ever be able to financially "realize" your inheritance...other than the person occupying the home...even if you are all financially responsible and paying your fair share of expenses?

We have something similar going on in my family. My grandparents owned a 4 flat that was entirely occupied by family, so it was kind of treated like one extremely large house. They owned 1/2 of it and one of my aunts owned the other half. So, when they passed away that left one aunt owning 5/8ths of the property and the other 3 sibs (including my mother) owning 1/8th. My mother didn't care, she told them all that she happily would forego any claim to rents if she also had no responsibility for expenses/mortgage/taxes. My Uncle more or less felt the same way as far as I could see. So my aunt and cousins continued to live there and the cousins all paid "rent" to their mother who handled the property. One aunt however was not happy with the situation. She wanted to "realize" her inheritance. Now the aunt who owned 5/8ths has passed away and my cousins are all trying to handle things and "plan to sell" but nobody has the money or time needed to put the property in saleable condition. (because of treating it more or less like one big house, and a bit "shabby" now)..and the one aunt is still quite unhappy that she has never realized her inheritance.

In hindsight family relationships and other issues would have been less problematic if the property had simply been fixed up and sold when my last grandparent passed away...particularly with the real estate market the way it is now. The sad thing is, is that my grandfather and his brother made exactly the same mistake when their mother died, because she also owned a 4 flat that they decided not to sell when their mother died. When they were ready to sell the neighborhood had gone to heck in a handbasket, and the property eventually became a huge liability and they were forced to tear it down and donate the land to the city to get out from under it.

So, if you are the administrator please rethink what you are doing. In the long run, its far more likely that you should simply sell the home and split the proceeds (first using proceeds to pay estate debt). Otherwise its just going to cost all of you money, and the only person who will have any benefit is the sibling who gets to live there.

 

[curb1]

I agree, sell this house immediately. This is one big mess that will not get cleaned up. It will become a bigger mess in the future.

 

[las365]

At this point none of the heirs "owns 1/5 of the home." The Estate owns the home. Each sibling is heir to 1/5 of what is left of the Estate after property is appropriately disposed of and the debts are paid. How much is the house worth, anyway?

 

[questionforall]

house worth

I guess this is why I can't think straight, I really don't know how this will work with so many issues. I'm trying to hear all the wishes of the siblings and be fair. and Yes, I stand corrected, no one owns any portion of the home at this point, it belongs to the estate. The worth of the house is only 130,000. No one stands to become rich off this inheritance by the time the debt is paid off.

 

[tranquility]

There are not too many issues here. This is not hard in the least. The only problem is a person with a personal stake is involved. A personal stake both in the value of the estate and in the relationships with others. A GOOD fiduciary treats this like a business.

 

[questionforall]

I guess you would be right tranquility. Someone not emotionally attached would simply order the property vacated, sell the property and split the proceeds. Are you a lawyer or someone who has been through this process personally?

 

[tranquility]

The bottom line is that YOU are going to have problems whatever you do, so you must protect yourself from getting sued for breach of your fiduciary duty. You need to see the estate's attorney and accountant and ask them what to do as the first step. See what they say. Simply getting professional advice can have protective attributes in the future. Also, they will help to focus you on what factors should be a part of your decision. You don't have to do what they say, but you have to ask them.

After that, someone has to make the call on what to do. That person is you. If you consider feelings rather than facts, you will probably find yourself on the losing end of a lawsuit. Personally, I'd tell the heirs there are two options. That you sell the property now or you distribute the property to all the parties now. I think it is safer to distribute then sell, but the difference may not be that great. (Note I said safer, not better.) Tell them you are getting professional advice on the matter, but if anyone has a plan on how to resolve the problem, they must present it within 14 days or you will choose which course to take. Then, only listen to complete solutions, not things the person wants. See what the professionals say, integrate it with what has been presented, and make a choice.

 

[curb1]

Sell the house as soon as possible. Make the decision and let everyone know. Then ask all if they have a better (complete) answer. They won't. Be done with this, or it will drag out for years and will get much worse. If two or three of the beneficiaries want to buy the house, that would be fine. But, it needs to be settled soon.