[WSBAPT] best way to deed property to heir who is buying out siblings

Tue Mar 17 09:14:34 PDT 2015

This is generally quite simply accomplished by having the siblings all sign on to an agreement on the price (TEDRA or similar, but less formal). Then the Personal Representative can enter into a purchase and sale agreement with the buying sibling as a part distribution/part sale transaction, often we structure the inherited share as the ‘down payment’. Excise tax will be due on the sale portion, but not the inherited portion, but the “sale price” in the contract will be the full price, including the inherited share.

Once the sale goes through, the proceeds can be distributed by the Personal Representative, or in your case, if the agreement of the siblings is a promissory note, it can be distributed to the other siblings.

It is important to address what happens if sibling doesn’t or can’t pay the note off when it is due. One question I have is why use a short term note?

I would be happy to chat about your particular circumstances if you would like to give me a call.

Heather

Heather S. de Vrieze
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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Chandra Lewnau
Sent: Tuesday, March 17, 2015 8:42 AM
To: WSBA Probate & Trust Discussion List
Subject: [WSBAPT] best way to deed property to heir who is buying out siblings

I have a probate where one heir wishes to purchase the decedent's home. Is there any reason this can't be done in one step - i.e. a deed from the PR (as pr and as individual) to the heir - rather than PR to all heirs and then all heirs to the purchasing heir? It's a small estate with two sibling heirs who get along well. The purchasing heir will take a smaller share of other assets and give a promissory note for the remaining balance with a relatively short payoff. It seems simple, I'm wondering if there are any tax or other consequences I may be missing.
Chandra M. Lewnau   Wills & Trusts | Probate | Small Business
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