Estate Question

[swift]

My DH is the administrator of his half-brothers estate. There was no will and this is in California if that makes a difference.

The only things that are left in the estate to liquidate so we can close up are a Tollycraft live-aboard and a car. We would like to purchase the car for our DD. My question is do we have to pay for the vehicle up front or can we right an IOU to the estate and take it out of our share of the Tollycraft sell if we can buyer for that? Some people have told us we can some have said no you can not you have to keep to records clean.

 

[laxmom]

We are in Ohio and there was a trust but we purchased the car and wrote a check for the amount, less our third of the ownership of the car. So it was appraised at $6000. We paid the trust $4000. No body told us to do this, we just thought it was the most straight forward way to handle it that would leave no ruffled feathers. People get "funny" about money when it comes time to settle an estate.

 

[swift]

I guess I should also clarify that none of the other family members are interested in the car. It is a Mazda Protege and just seems perfect for a first car.

 

[IngridN]

Can you handle it as an early distribution from the estate? We had a similar situation in that my father's (California) estate was handled by a court trustee (won't go into the reasons for that!). My always broke brother wanted an early distribution from the estate. The trustee received all of the other heirs' (myself and another brother) permission to do so. His early distribution was then adjusted for when the estate was settled. I would imagine you could do the same after establishing the value of the car and getting agreement from all the other heirs. Be sure everything is well documented.

Ingrid

 

[swift]

Can you handle it as an early distribution from the estate? We had a similar situation in that my father's (California) estate was handled by a court trustee (won't go into the reasons for that!). My always broke brother wanted an early distribution from the estate. The trustee received all of the other heirs' (myself and another brother) permission to do so. His early distribution was then adjusted for when the estate was settled. I would imagine you could do the same after establishing the value of the car and getting agreement from all the other heirs. Be sure everything is well documented.

Ingrid

This is what I am hoping. It would be nice to be able to do it that way rather than have to get a small car loan and pay the interest. However, Tim's attorney said we can not use the estate money toward the car. I don't see why we can not use our portion it seems reasonable to me as long as we had in writing from the other family members that they were ok with it. That is why I am posting here. Hoping some of the TUGers that are familiar with the law would let me know why or why not.

 

[IngridN]

Personally, I think his attorney is wrong or being overly conservative based on what our court appointed trustee/executor did with the early distribution to my brother. He ran it by his attorney, that's for sure.

In essence, your executor is selling the car to you and doing an early distribution at the same time. Perhaps there's not enough cash to cover this early distribution? That's the only thing I can think of that would perhaps prevent what you are trying to do. Just my opinion, of course...I have no legal training! Does the attorney provide a reason why this cannot be done?

 

[Jimster]

taxes

Does the word taxes ring a bell? First, you must pay fair market value for the car. Second, it should be an arms length transaction. There is no reason why a partial distribution couldn't occur unless the estate is upside down, or there are costs yet to be incurred or someone objects. I'm sure the attorney is also looking at the transaction and calculating his fee. There has to be enough money in the estate to pay the taxes, attorney fees, court costs, and any liabilities that the descedant may have had. And YES, it makes a world of difference where all of this is being probated. For example, in Illinois we have no inheritance tax. Many states do have inheritance taxes. Finally, what may seem logical may not be legal. The whole purpose of estate administration is to put into effect the wishes of the deceased. Since the beginning of time, the human experience has been that those living have their own agenda. The purpose for the procedure is to help to insure that the money goes to where the dead person wants it and not to where some live person would like it. If those two places are the same-so be it. If they are not, then the law is supposed to protect the wishes of the descedant and unfortunately that takes time and money. BTW nothing that I or anyone else says here makes a wit of difference unless the object of their advice comes from a California estate.

One last comment after reading your comment again. What if the attorney does what you ask and makes an early distribution? You get the car and you use your inheritance for it. Then before the estate closes an unknown heir appears, a claim against the estate appears out of no where, etc. Guess what happens then? Then you cough up the cash anyway. If you're lucky the new claim doesnt actually cause the estate to be insolvent.

 

[JLB]

A car was involved in my dad's estate. Older, needing repairs as it had been sitting more than a year.

Prying eyes should be the phrase that governs the action of Personal Representatives/Executors. Conduct yourself in such a manner that prying eyes will find nothing out of order. Do everything in writing and document it.

Regarding the car, as all of the beneficiaries had gathered for the service (and the reading of the Will, as seen on TV, which is not done in real life ) I asked who would like the car. All declined. Actually, I invited all to come to Dad's place and take what they want, and they did not.

I NADAed it's value and included it in the date of death assets, had the repairs done, and sold it to my MIL, the proceeds going into the bank account of the Estate, to be eventually distributed. Of course, written records of the car were included in the Estate records.
- - - - - -
Our mother died a year later and since I had done Dad's, the agreement was that my older brother would do hers. But, when it came time, he declined. So I did another one. I emailed him on every decision and he did not reply, his way of objecting to the way things had gone with Dad's.

At the final hearing to close the Estate he showed up to protest a house transaction a year before Mom died, not part of the Estate assets. He made a 900-mile trip to do that.

The judge found him out of order, that he had acted in a timely manner.

Some of you have followed my Estate perils, so here's an update.

The broker who stole money from Dad is in the last of five years of probation. He has stopped paying restitution two or three times, gone to jail, then started paying again. I/we have to decide whether to accelerate the restitution, something we have the right to do since he missed payments. We have the right to assess the highest legal rate of interest (21%) from the date of the missed payment. If we do that it will mean that either his well-t0-do father will have to pay in full or else Creep will never be able to pay the restitution (the monthly interest would be higher than his required payment)

Since he is paying again, the Court may not be friendly to us doing that. Whattya think we oughta do?

Dad's Estate finally got closed last year (after five years), so the beneficiaries have that call to make.

Mom's has been closed for quite a while now. Last week she got a check for more than $500, an overpayment of a final bill. I told DW that Mom gets better mail than we do. So I contacted the attorney the Estate and he suggested I see if they would just pay my brother and me. They said they would. Fortunately they didn't ask for all the documentation and credentials folks normally ask for.
- - - - - -
I spent hundreds, likely thousands, of hours on the two Estate. Most would think it is dumb, certainly my last attorney would, but I decline all fees, even the statutory ones.

Part of the reason is the prying eyes I not wanting anyone to feel I gained unfairly. The more important reason is all the things my parents did for me, the sacrifices they made that I took for granted, and that I never got a chance to repay them. They both left problems and since they sorted mine out so many times and felt I owed them a sorting of my own,

 

[bobcat]

A car was involved in my dad's estate. Older, needing repairs as it had been sitting more than a year.

Prying eyes should be the phrase that governs the action of Personal Representatives/Executors. Conduct yourself in such a manner that prying eyes will find nothing out of order. Do everything in writing and document it.

Regarding the car, as all of the beneficiaries had gathered for the service (and the reading of the Will, as seen on TV, which is not done in real life ) I asked who would like the car. All declined. Actually, I invited all to come to Dad's place and take what they want, and they did not.

I NADAed it's value and included it in the date of death assets, had the repairs done, and sold it to my MIL, the proceeds going into the bank account of the Estate, to be eventually distributed. Of course, written records of the car were included in the Estate records.
- - - - - -
Our mother died a year later and since I had done Dad's, the agreement was that my older brother would do hers. But, when it came time, he declined. So I did another one. I emailed him on every decision and he did not reply, his way of objecting to the way things had gone with Dad's.

At the final hearing to close the Estate he showed up to protest a house transaction a year before Mom died, not part of the Estate assets. He made a 900-mile trip to do that.

The judge found him out of order, that he had acted in a timely manner.

Some of you have followed my Estate perils, so here's an update.

The broker who stole money from Dad is in the last of five years of probation. He has stopped paying restitution two or three times, gone to jail, then started paying again. I/we have to decide whether to accelerate the restitution, something we have the right to do since he missed payments. We have the right to assess the highest legal rate of interest (21%) from the date of the missed payment. If we do that it will mean that either his well-t0-do father will have to pay in full or else Creep will never be able to pay the restitution (the monthly interest would be higher than his required payment)

Since he is paying again, the Court may not be friendly to us doing that. Whattya think we oughta do?

Dad's Estate finally got closed last year (after five years), so the beneficiaries have that call to make.

Mom's has been closed for quite a while now. Last week she got a check for more than $500, an overpayment of a final bill. I told DW that Mom gets better mail than we do. So I contacted the attorney the Estate and he suggested I see if they would just pay my brother and me. They said they would. Fortunately they didn't ask for all the documentation and credentials folks normally ask for.
- - - - - -
I spent hundreds, likely thousands, of hours on the two Estate. Most would think it is dumb, certainly my last attorney would, but I decline all fees, even the statutory ones.

Part of the reason is the prying eyes I not wanting anyone to feel I gained unfairly. The more important reason is all the things my parents did for me, the sacrifices they made that I took for granted, and that I never got a chance to repay them. They both left problems and since they sorted mine out so many times and felt I owed them a sorting of my own,

You are a good person. Remember, the good you do comes back to you.

 

[JLB]

Thanks. That will be a nice day. You know, when the good comes back?

Now that I actually read the entire car plan, the thing I would change is that you should pay for the entire car, without deducting what you feel is your third. You will get it back from the distribiton(s). By deducting your third you would be making an improper distribution, or, more importantly, the appearance of one.

One improper move sets the snowball rolling downhill. As Dad's attorney said, "The Executor is always the lightning rod of discontent."

That is what I mean by avoiding prying eyes, actions that appear to favor yourself.

However, you are the ones to set the car's price. NADA or Kelly Blue Book it, and take the lowest value for it's condition, wholesale or private party.

 

[swift]

Thank you all for your replies. I guess we will buy it from the estate do it all the "right way".

 

[JLB]

I did not mean to delay it until distribution time. Go ahead and buy it, at a price you can justify in writing--say the lowest wholesale--and put the money in the Estate account.

Put you paperwork on the pile and make an entry in your log .

My two piles are over a foot tall, but the log-keeping is over.

 

[JLB]

Back to post 8, I really would like to know what others would do.

As brief as possible, Creep was given a 10-year suspended prison sentence, with five years of probation, and a 17-year restitution agreement. The restitution agreement called for $50000 upfront (which his dad paid), then $500 a month, with no interest. That was a negotiated agreement, to keep him from going to prison.

Interest was not charged, in lieu of an acceleration clause. It said that if he ever defaulted, not paying by the first of any month, that the balance could be accelerated, including the maximum allowable rate of interest (21%) from the date of default.

At the point in time when we settled with his brokerage (at mediation), we asked Creep (in reality Creep's Dad) to pay off the balance, discounted from approx $100K to $75K. They offered to settle for $21K, literally saying that was the amount owed for the rest of the probation operation, cuz after that, forget about any more.

Then Creep defaulted. The judge scolded him and told him that if he defaulted after the probation period that he would go to County Jail (a worse place) for 6 months for every missed payment. But, even with that, all we have after the probation period is a civil claim, the legal system could not revoke his probation and make him serve the 10 year sentence.

Then he defaulted again and got scolded again, with 10 days in jail.

That brings us to now. His five-year probation--his weekly reporting and keeping tabs on him--will end soon. The official amount he owes is m/l $70K. By appearing in Court, showing the restitution agreement and the court proceedings showing he defaulted, we can add 21% interest from the date of the first default maybe 3 years ago.

I would be the one who would have to go and do that. If it harmed us, I would be the one blamed. To say it is simply as I can, I will not receive any compensation, credit, praise, thanks, admiration, or attaboys, from my siblings if they benefit, but I will receive heaps and heaps of hateful condemnation if I screw it up. If I succeed, I will not gain disportionately, only as much as each of them, and they will not share the expense of doing this.

I/we have not done that because I am concerned that doing so may hold us in disfavor by the Court, which has been on our side thusfar. On one hand, the Prosecutor, son of the well-respected Prosecutor when I grew up, told me that this was the most egregious case of elder abuse he had ever seen and he would make sure Creep fulfilled his obligation. On the other hand, the Prosecutor cannot do anything after the probation period is over because Creep will no longer be under the control of the DOC.

The main reason I would do it would be to force his father to ante up, to settled for a negotiated amount and have this over with.

Of course, adding the interest would be significant, say adding $50K to the balance immediately and another $2000 a month. The Court only requires Creep to pay $600 a month, so if he keeps doing that, the balance will balloon! It is because the amount is so shocking, punitive, that I feel the Court might hold it against us if we did it.

But, it is what he agreed to, to keep from going to prison, and he has managed to do that for five years.

The other thing against doing it is that I have fought some battles, some ugly ones with some hateful people, since this all began six years ago, and that sort of stuff takes it's toll on a person.

What gets lost in the details, and the real reason I would do it, is that I can still see Dad, what this did to him when he was most vulnerable, and what we would have done for me if the tables were turned.

Sorry, but it took at least this much to explain the situation.

Whattya think I should do, or, better yet, if it was you, and you had to do all this persoanlly, travel 500 miles and go present it in Court yourelf, would you?