Heirs to Property or cash?

June 23, 2010 3:19 PM

I am the trustee of my mother’s estate. She has left her three children some cash, stock and property in the form of a Florida retirement property that has been on the market for 2 years. My step dad stands to inherit 100,000 in cash, stock or property. He wants it in cash. I want to offer it in property. If we give him cash it is a large chunk of the inheritance and we would be stuck with a property that is hard to sell and has a 700 monthly maintenance fee. Am I being too selfish? He is 86.
posted by ChrisB48 to work & money (14 answers total)

What is your best estimation of what would your mother have wanted for all of you?
posted by Blazecock Pileon at 3:28 PM on June 23, 2010

Do you have a probate lawyer involved? It's a thorny area of law, and jurisdictional differences are confounding and surprising.

Legal questions aside, I don't think you're selfish to want to avoid bearing full responsibility for the illiquid property. How are the assets being valued? Is the choice between $100K, stock worth $100K and a property last valued at $100K? Because if the intent (assuming she died testate) was to bequeath equal value, presumably some discount could/should be made to reflect the inability to sell the property and the costs of its upkeep.

However, if you want to stick him with the property and bear no responsibility for it, that does sound a bit selfish. Have you proposed each beneficiary receiving a pro rata share of each asset?

None of this is to suggest any of the foregoing is permitted in your jurisdiction, whatever it may be. Consult your own tax and probate attorneys.
posted by Admiral Haddock at 3:32 PM on June 23, 2010

It seems to me that your mother made you the trustee because she trusted you to make these sorts of decisions. Possibly she knew the step-dad would simply be selfish, as he seems to be acting now.

From the little you said, the situation doesn't sound fair to me. It essentially saddles the rest of you with the property and the lack of liquidity, allowing him to go on a spending spree. You don't owe him a spending spree at the expense of the rest of you, no matter his age. I definitely would not agree to it, were I the trustee.

FWIW, this is exactly why I will never do anything like that to any of my children. It is painful and difficult to make these decisions among family. A trusted & paid third party would do it better, faster, hopefully more rationally and certainly less painfully for everyone involved.
posted by Invoke at 3:35 PM on June 23, 2010

I don't know that stepdad is any more selfish than OP and siblings. It seems like someone is bound to get hosed by ending up with a hard to sell property that no one wants. If it's been on the market for two years is it possible to just drop the price low enough to move quickly, then divide the proceeds amongst the estate?
posted by 6550 at 3:41 PM on June 23, 2010 [9 favorites]

Check with a lawyer, but is it possible for you to not pay out anything until the property is sold and everything is in cash form? I've known of some estates where nothing was distributed until it could all be done at once (except for small personal items). People don't get their part of the inheritance until everything else in the estate is settled so he may just have to wait.

Could you also consider having his part in cash and part of the property? That way he could get some cash soon if he needs it and more later when things are settled.

Either way, consult a lawyer. The estate would pay the fee and is pretty much a requirement in this situation.
posted by MultiFaceted at 3:46 PM on June 23, 2010 [2 favorites]

Who has the most immediate need for cash? Your stepfather is 86 years old. He's probably not in a position to wait around for an upswing in the property market, you know?

Either cash him out now, or drop the house price to generate more cash.
posted by DarlingBri at 3:53 PM on June 23, 2010 [5 favorites]

My siblings and I are awaiting final distribution of my dad's estate now that -- after 2 years on the market -- his house has been sold. In the meantime, my brother (an estate lawer) made interim distributions as the stock market came up and he liquidated some stocks.

There is no reason you can't resolve the estate you are managing in the same way -- with some interim distributions and final settlement after the Florida propery sells. You owe everybody a fiduciary duty to do what is in their best interests - not just your stepdad.

If someone, including him, has pressing personal needs while the estate is being liquidated, of course it seems to me you have the ability to advance funds and deduct from the eventual distribution of their share.
posted by bearwife at 4:00 PM on June 23, 2010 [2 favorites]

Seems like the estate has to be settled before any payouts to anyone occur, regardless of age. As the trustee, you need to consult an attorney about this before making any decisions about who gets what, when. Maybe also consult a real estate appraiser to see if the property that hasn't sold in 2 years is overpriced for the market, or if you could benefit from holding onto it until the market improves. Your stepfather's wishes don't override your responsibility to your siblings, so go slow and steady until after consulting with the attorney and appraiser.
posted by motown missile at 4:00 PM on June 23, 2010

A fair solution would be to divide the $100,000 between the three options:

that is, give him

$33,333 in cash
$33,333 in stock
and a $33,333 share in the property.
posted by Year of meteors at 4:12 PM on June 23, 2010 [5 favorites]

DISREGARD EVERY ANSWER HERE.

Hire a probate lawyer in your jurisdiction. Period.

I am a lawyer and this is exactly within my practice's focus and I handle these sort of matters ( or their aftermath) all the time. That said this is the first answer I've posted where I'm not going to given you an answer at all.

There are so many details that any competent lawyer would need to know before giving you any advice that if you provided all of it this would be the longest ask EVER.

Go hire a lawyer. Period, End of answer.
posted by BrooksCooper at 4:56 PM on June 23, 2010 [21 favorites]

If you are looking for validation about your feelings of not wanting to be stuck with an unsalable asset while your step dad walks off with cash, then we can all probably agree that you are not selfish (unless there are other unstated circumstances).

BUT as a practical matter you really do need the guidance of a lawyer. For instance you have not stated how the will was written, and as you mention "trustee" it sounds like there is trust that may specify details of distribution, but without details of how things were set up nobody here can give you reasonable advice. Specific bequests tend to get paid before residuary bequests -- only a lawyer practicing in the field/jurisdiction would know if you could acceptably pay him his share with an interest in an unsalable property (not to mention the correctly deal with the complications of how you would properly assess value if the property is illiquid). Talk to a professional!
posted by Quinbus Flestrin at 5:03 PM on June 23, 2010

I should have previewed -- listen to BrooksCooper
posted by Quinbus Flestrin at 5:05 PM on June 23, 2010

BrooksCooper has it. IANYL, TINLA, I don't practice estate law, and I'm not licensed in Florida, but you need to consult a lawyer right away.

The ABA has a site about finding legal help in your jurisdiction; that's as good a place to start as any if you don't already have counsel.
posted by tellumo at 11:24 PM on June 23, 2010

I'll add that if a house hasn't sold in two years, it's absolutely not worth whatever price is hanging on it. By definition, there is a buyer for every property if it is priced at or below actual market value, not "wish" value.

You probably want to talk to a lawyer but I'm just positing that divvying up assets equally where everyone wants cash when all is said and done is unfair unless all involved take a share in the illiquid asset(s).

Besides, it's a lot easier to share the "losses" of selling the house at market among several people (four people taking a $7500 hit instead of one taking a $25,000 hit, for example).
posted by maxwelton at 2:28 AM on June 24, 2010