My MIL just died she owned a home with a balance of 124k the home is valued at 550k after rehab min. No one can afford to buy the home but us (that’s if it don’t sale) it’s on the market as is right now for 285k. ok she had 8 kids 2 are minors. My wife is the executor and we are adopting the 2 minors. The family wants to sell the home but it need alot of rehab to get 550K but it’s worth the risk…
What we would like to know is what could be the best direction to take on this?
What should we offer the other family members to buy them out or should we just sale as is and move on?
What should we offer the other family members to buy them out or should we just sale as is and move on?
You could do both. Have a group meeting. I assume that your MIL’s will did not specify the disposition of the house, or left the house to be shared by all heirs. There are eight heirs. If sold, each heir would receive one-eighth of the net sale proceeds.
Have a family meeting. Present the options to fix and sell retail, or attempt to sell as-is. If some of the adult heirs want to sell as is, then the rest of the group could buy each of them out for one-eighth of the as-is market value. The remaining heirs could chip in to rehab and sell retail, with the remaining heirs splitting the net equally.
Establish trust funds for the minors to hold their share. The minors should probably be represented by their own attorney.
You are going to be bound by taxes and Probate . I’m not sure if you have an appraisal on the home, which would be required by the IRS and the Probate court. This helps to establish a total value of the estate and subsequently the amount of tax to be paid on the estate. You do not say that your mother in law may have had some other assets (checking, savings, CD’s, life insurance and or stocks and bonds). All of this will be part of “the equation”.)
You do not say if your mother in law had a will? She may have felt that one member of the family was more deserving than another and planned to leave her home to a family member that is currently renting. Or, she could have felt strongly about leaving all or part of her estate to a charity. These instructions would have been expressed through her will which should take precedence over the wishes of her surviving family, after all, it was and remains her money until officially distributed.
Lastly, if your mother in law died intestate (no will) the Probate court will decide on the fate of her assets. There is a standard approach to the distribution of assets. First the court will look for a spouse. If there is no spouse, then to children, no children then to parents, no parents then siblings, no siblings then nieces and nephews. (I’m doing this chain of heirs from memory don’t hold me to the exact order in which they have been listed!)
Finally, I would caution you from both personal experience and work experience. Death and inheritance ABSOLUTELY brings out the worst in people and has been known to destroy families. Assuming there is no will, your upcoming meeting on Saturday should be an agreement to present all assets to either an estate lawyer who will represent you in Probate court, or, and I don’t recommend this, an agreed upon plan to present to the Probate court. Even with a will you will have to go through Probate and it is generally a two-year process.
Forgive me if this sounds harsh. It is not meant to be, but it is how the process is handled.
Also, if your mother in law was receiving Social Security benefits. Stop them immediately. Allowing them to keep coming in will make the Social Security Administration angry that you are working on their money and it will be harder to repay them!