Article of Interest on Wills & Estates

BUYING ASSETS FROM AN ESTATE

Eric passed away two years later than his wife, leaving the whole of his estate, which was really only the home, to be divided equally between his three children. The three children had been appointed by Eric as his Executors and Trustees.

The eldest child wanted to retain the house for himself and pay out the other two children as little as possible. The other two did not oppose the retention of the property by the eldest so long as the transfer was at market value. This would be the basis for what money they would receive from the estate.

The value to be attributed to the house created a problem and there was nothing in the Will to assist the Executors resolve the dispute.

There was argument and tension between the siblings about the worth of the house. The Will did not provide for the eldest to retain the house and without agreement it would have to be sold.

It was not Eric’s wisest move to appoint the three children as Executors, aware they had never really been able to get on together.

The Lawyer who had been retained to administer the estate needed to exercise experience and caution for the tension between the Executors and beneficiaries could escalate and disadvantage all of the beneficiaries.

The situation was resolved by an agreement to have the house valued by an independent party. It was agreed by all a registered valuer be appointed and the valuation given by the valuer be adopted as the value of the house. (It was a shame this mechanism had not been drafted in the Will.)

The valuation of the house came in at $750,000.00. As the eldest could not raise the amount required to retain the property, it was placed on the market and sold for more than expected at $820,000.00. This amount was then divided equally between the three children.

Peace reigned, but only just.

Your Lawyer should assist you to be more specific in your Will, especially if there are prickly relationships among beneficiaries.

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