Estate Question

[dodint]

Why would heir 2 be paid out of the estate account? If heir 1 is buying out heir 2's stake in the house, that money should come from heir 1's personal finances, right?

Hier1 buys, with personal funds, the house. The proceeds from the sale go into the estate account (not directly to Hier2).

[AuthorTony]

Why would heir 2 be paid out of the estate account? If heir 1 is buying out heir 2's stake in the house, that money should come from heir 1's personal finances, right?

Hier1 buys, with personal funds, the house. The proceeds from the sale go into the estate account (not directly to Hier2).

Is the estate carrying debt? Sorry if this was addressed before and I missed it.

[Willie Kool]

Heir1 buys, with personal funds, the house. The proceeds from the sale go into the estate account (not directly to Heir2).

And the car too?

If so, the estate account would then have $110,000 minus the $30,000 in debt - so 80K.

This is then split between the two heirs - 40K each.

[dodint]

Bev, not saying you're wrong, it's just that what you've said doesn't really align with my understanding of how this works. Or, at least, with how we're administering the estate.

Maybe I'll personalize it and make it simpler. My wife is Hier1, she's buying the house now. The BIL has already taken possession of a car and motorcycle so regardless of how it turns out he's already on the hook for those items.

My MIL passed without a will so the estate has to be divided 50/50 (or they can divide items how they see fit, but they're going with 50/50). The way we are doing it is we have an estate account. Everything that can be liquidated is being liquidated and placed in the account, including the house. Once the account is done being loaded with assets they're going to pay all liabilities and split what is left.

The wrinkle is that my wife is paying half of the value of the house into the estate account, buying his half.
Now when they go to make equitable distribution of the estate, she starts with half of the house already on her side.
He starts with the car and motorcycle on his.
Then the they start adding cash to his side to bring him equal, because the house is worth more than the car and motorcycle combined.
But there won't, even with my wife putting the house proceeds into the account, enough cash on hand to make his share equal with hers because of debt and bills the estate owes.

So what happens then? Does she bring a check to the final meeting closing the estate? Or does he just get what's left over?

[Willie Kool]

The wrinkle is that my wife is paying half of the value of the house into the estate account, buying his half.
Now when they go to make equitable distribution of the estate, she starts with half of the house already on her side.
He starts with the car and motorcycle on his.
Then the they start adding cash to his side to bring him equal, because the house is worth more than the car and motorcycle combined.
But there won't, even with my wife putting the house proceeds into the account, enough cash on hand to make his share equal with hers because of debt and bills the estate owes.

So what happens then? Does she bring a check to the final meeting closing the estate? Or does he just get what's left over?

Mrs. d paying 50K for half interest in the house plus her 40K share only adds up to 90K, so she would still need to pay the extra 10K to the estate to get to the 100K house value.

I think...

[dodint]

Yeah, that's my feeling too. I just felt like I was missing something this whole time.

The easier way to do it is she just pays $100k when buying the house and they split everything down the middle at the end. I'm not advocating for that position (or any position, I'm officially in over my head now) but she thinks she'll lose out doing it that way. I think both outcomes are effectively equal in the end if they're doing a 50/50 distribution since the Assets and Liabilities are the same either way. I'm really curious how it shakes out and I'll let you guys know what ends up happening.

[dodint]

So, the way this shook out was my wife brought extra money to the sale of the house. Although her half of the house was only $40k or so, she brought about $48k to the table to cover 'her half' of a USDA RD loan and anticipated estate closing costs.

With the sale of the house there are only a few minor liabilities left, hopefully we can close this out soon.

And now we own a house in Latrobe, so we have somewhere to stay if we want to avoid the long arduous one hour trip back to Allison Park when visiting family.

[slappybrown]

Do people from Latrobe say "Lay-trobe" or "Luh-trobe." I say the latter but I have heard the occasional "Lay-trobe."

[dodint]

I've heard it both ways but fall into the latter camp myself.

[willeyeam]

everyone from my family there says lay-trobe, so that's how i say it