Legally, do I have to wait for buyout?

[clmaya]

Sister moving into deceased dads house, says she wants to wait to buy me out until she sells her house. Legally, do I have to wait? She is very stable financially, and I've read options such as estate loans, etc.

 

[Taxing Matters]

Sister moving into deceased dads house, says she wants to wait to buy me out until she sells her house. Legally, do I have to wait? She is very stable financially, and I've read options such as estate loans, etc.

Wait for what, exactly — for her to buy out your share of the house? In what state is the house located? Who currently owns the house — is the home still titled to your father (and thus owned by his estate, titled to a trust, or titled to you and your sister? If titled to the estate or a trust, who is the executor of the estate or trustee of the trust?

 

[clmaya]

Yes-to buy out my share. In Indiana---Dads name still on title--just went into probate. My sister is executor (who wants to keep the house), I am backup executor, and beneficiary. Thank you

 

[justalayman]

Once probate is settled and the house is put into both of your names You can force the action but it wouldn’t necessarily be any faster .


By chance is there enough other money or other assets in the estate to be able to offset your share of the house where you would receive those assets in exchange for your sister receiving the house in its entirety? If you can find a workable solution such as that it would likely be faster than any other solution.

 

[Taxing Matters]

O.k., so the house just went into probate and your sister is the executor. That puts her in the driver's seat and she largely controls the timing of how things go. A lot is going to depend on what other assets the estate has and what debts it owes. As executor she has a responsibility to ensure that the estate bills are paid, and that means the estate has to hold on to sufficient assets to make sure all those bills get paid. That includes burial and funeral expenses, taxes, any medical bills your father had, debts he owed, etc. That usually takes a least several months to contact all the potential creditors, get proofs of claim, pay the bills, etc.

Once that is all sorted out she can distribute the assets. If she drags her feet too much in doing this stuff you can sue her to compel her to get things done, but that's going to cost you money in legal fees, court costs, etc.

Once the distribution is done, if you and your sister end up co-owners of the house, you'll need to either get her to buy out your share or cooperate in selling the property to get your money out of it. You can't legally force her to do either one of those things. What you can do is seek what the law calls a partition of the property. That would result in a court ordered sale of the property. In addition to the legal fees and costs you have in doing that, the home is likely to sell for significantly less at a partition sale than in a regular voluntary sale that you and your sister would do. In short, you might end up with a lot less in your pocket in the end by doing that. And it won't be a fast process.

 

[clmaya]

Thanks to you both. House would only be in her name as she will then take it over. She has begun to pay off creditors, with is bank acct--which were very few. Estate actually is to be divided 3 ways, she, I, and our stepsister--not enough in assets to pay us both. Stepsister and I feel we shouldn't have to wait for our shares until she sells her present home. Through research, I read about an estate loan, so we could be paid..and just be done. Just trying to get some diff points of view

 

[justalayman]

Hold on

Why would the house be only in her name? Until you are compensated for your share, it is your house as well as hers. Once probate closes, if it is in only her name and if you haven’t been paid, it would take a lot of effort and some money to contest that condition, especially since you will likely be asked to sign a release of claims with probate being settled as it is.

Sister needs to buy your share before probate closes if it is to be in only her name.

 

[Zigner]

Thanks to you both. House would only be in her name as she will then take it over. She has begun to pay off creditors, with is bank acct--which were very few. Estate actually is to be divided 3 ways, she, I, and our stepsister--not enough in assets to pay us both. Stepsister and I feel we shouldn't have to wait for our shares until she sells her present home. Through research, I read about an estate loan, so we could be paid..and just be done. Just trying to get some diff points of view

You aren't entitled to anything until the estate is settled.

 

[not2cleverRed]

Thanks to you both. House would only be in her name as she will then take it over. She has begun to pay off creditors, with is bank acct--which were very few. Estate actually is to be divided 3 ways, she, I, and our stepsister--not enough in assets to pay us both. Stepsister and I feel we shouldn't have to wait for our shares until she sells her present home. Through research, I read about an estate loan, so we could be paid..and just be done. Just trying to get some diff points of view

I'd say it'd depend on how long she expects you to wait. If her present home is up for sale, or soon to be, and we're talking months, then calm down.

If she's planning on keeping her present house for a few years, that's unreasonable.

 

[bcr229]

Hold on

Why would the house be only in her name? Until you are compensated for your share, it is your house as well as hers. Once probate closes, if it is in only her name and if you haven’t been paid, it would take a lot of effort and some money to contest that condition, especially since you will likely be asked to sign a release of claims with probate being settled as it is.

Sister needs to buy your share before probate closes if it is to be in only her name.

Exactly this. Also you will get paid faster than if the house has to be prepped for sale to the public, get put in the MLS, shown to buyers, go through appraisals and inspections, hope the buyer can get financing, etc. You will likely net more as well since you won't be paying the realtor's fee, just the title attorney to handle the deed transfer.

Estates take time to settle and the more stuff the executor has to deal with, the longer it can take. You need to be patient.

 

[PayrollHRGuy]

You aren't entitled to anything until the estate is settled.

I agree but it sounds like the sister/executor is getting the house now and will be living in it while she tries to sell her house. She is getting the use of her part and the OP's before the estate is settled.

 

[justalayman]

I agree but it sounds like the sister/executor is getting the house now and will be living in it while she tries to sell her house. She is getting the use of her part and the OP's before the estate is settled.

And actually that is allowed. The executor has the power to allow use of an estate asset. It’s once title has been reassigned that it would be problematic. Before the estate is settled the estate is the owner of the property.

 

[LdiJ]

I am going to repeat what the others have said. Absolutely, Positively do not allow your sister to put the house in her name only. Insist that the house be put in all three names and then it can go into her name when she buys you out, or make sure that she is buying you out before the home goes into any of your names.

Its not unusual that she would need to sell her house first before buying you out. She might not be able to get two mortgages in her name at this point in time. Just do NOT let her put the house in just her name before you are bought out.

 

[justalayman]

Just a bit more.


For a lot of reasons, in my opinion, if this can be settled with the property being only in the sisters name when probate closes, it would make things easier.

Others can speak to possible tax issues that are different if you walk away from probate with cash or if you end up with title in your name and then sell your share to your sister. I’m not all that adept at tax issues to be able to go into that


Other than that, as Co owners there is a legal obligation of taxes and myriad other costs that would be shared debt. While I would expect your sister to pay all expenses on the house (post probate of course), it doesn’t always work out like one expects. Shared ownership can be a real pain. Avoid it if you can.

Of course, in either case you may have issues with determining the value of the home. That’s what appraisers are for. Use them if you aren’t comfortable with what your sister offers you for your share

 

[Taxing Matters]

Others can speak to possible tax issues that are different if you walk away from probate with cash or if you end up with title in your name and then sell your share to your sister. I’m not all that adept at tax issues to be able to go into that

Given that the transaction in either case is the sister buying out the OP's interest in the home the income tax effects will be the same either way. The OP's basis in his/her half share of the house is half the fair market value (FMV) of the home on the date their father died. The net proceeds of sale are what the OP gets from the sister for his/her half interest less certain expenses of sale, if any. The gain or loss is the difference between the net sale proceeds and his/her basis. If the sale occurs fairly soon after the death there should be little gain or loss as a result of this.