Siblings seek clarity after receiving confusing advice from estate attorney
From our vantage point, that doesn’t seem fair. While one sibling would end up with the home, the full value of the home would have gone to the two other siblings. The sibling who got the house would effectively end up with no inheritance from your father’s estate. If the property was worth $450,000, and you paid each sibling $150,000 for their share of the house, then you’d each wind up with an equal share of the inheritance.
Imagine it’s a different house you’re buying: one down the street that’s hypothetically priced at $300,000. If you bought that house instead of your father’s house, you’d be out of pocket $300,000. But, when your father’s estate sells his house, you’ll receive $100,000, or one-third of the net proceeds.
We were trying to imagine what information your estate attorney was trying to convey. Maybe he was suggesting that you pay $300,000 to the estate for the home. This way, you pay the full value of the home, but your father’s estate gets the money. This would seem right to us. Once the estate has the money, your father’s estate could distribute the funds to each sibling and each sibling would receive $100,000. You’d end up with the home and $100,000 from the estate. (You’d either have to pay cash for the property or take out a mortgage.)
We usually point out that when a sibling buys a home from the estate, there are some savings from that sale. In your particular situation, when you buy from the estate, the estate won’t have to pay a commission to a listing agent. And the estate may save other expenses on the sale of the home. You, as the buyer, may have reduced expenses as well. You, like your siblings, should profit from these savings.
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