[WSBAPT] Sale of Residence to one Beneficiary

[Paul Neumiller]

I know this "thank you " is late in coming but procrastination (and a wind storm) set in and I am just revisiting this file.  I appreciated everyone's input and guidance.  This is a good time to acknowledge that I am truly grateful for this listserv.


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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Mark Vohr
Sent: Thursday, November 18, 2021 5:14 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Sale of Residence to one Beneficiary

Adding to what Marcus said - if you have a beneficiary who basically wants to purchase the house and have a portion of their share go towards the purchase price, and you add to that an estate that does not have sufficient assets to cover that transaction, then you want to be really careful with the math so that you calculate the purchase price correctly.   Depending on how you approach it, you may not have an exact amount of their final distribution, so you are estimating the sale price.

Another thing we usually want is for all the beneficiaries to sign off on the price the house is being sold for.  When a fiduciary is selling a house that is not exposed to the public market - there is always the risk that there could be a challenge from the other beneficiaries as to the price.

Regards,

Mark

Ohana Fiduciary Corp.

A Washington Chartered Trust Company
Mark C. Vohr, J.D., CPG, Principal
155 NE 100th St., Suite 209 Seattle, WA  98125
T:  (206) 782-1189 F:  (206) 782-1434
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Marcus J. Fry
Sent: Thursday, November 18, 2021 4:57 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Sale of Residence to one Beneficiary

Paul:
If there are insufficient other assets in the estate, the estate just enters into a PSA with the purchasing beneficiary to sell the house at the value less the beneficiary's one-third share.  For example, if the FMV of the house is $300,000, the beneficiary purchases the house for $200,000.  There would be excise tax anyway you slice it in this scenario with a purchase because you do not have other assets of the estate to equalize the distribution per your statement.  I should note often time the parties agree to reduce the FMV a bit further before dividing given the fact that the parties are saving on realtor commissions.  If the beneficiary does not want to put anything down for their loan, you have to tweak things a bit to have the estate "distribute" the beneficiary's one-third share at time of sale.


Marcus J. Fry
Attorney | Witherspoon * Kelley
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Paul Neumiller
Sent: Thursday, November 18, 2021 4:38 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Sale of Residence to one Beneficiary


Listmates, I have a probate where one beneficiary wants to purchase the family home from his two siblings.  So, nuts and bolts. How does this work?  Does the PR use a PR deed to transfer the residence to the 3 siblings (excise tax free) and then the two siblings sell their 2/3rds interest to the buying sibling (with excise tax on the transfer of the 2/3rds interest?)  (I can't imagine the two siblings happy to pay the excise tax.) There is not enough other assets in the estate to distribute the house completely to the buying sibling. It seems cumbersome for the buying sibling to purchase the residence directly from the estate for full price and then receive 1/3rd of the proceeds back.  (AND, the buying sibling can't come up with the full price anyway) Plus then there might be excise tax on the full value of the residence.  So how do you guys do this?





[Paul A_ Neumiller]






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