Having to rent out inheritance home, can executor decide on what expenses to take?

J

Jakeredwood

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Hi there, looking for advice please.

In December 2012 my mother passed away, she had made my two sisters executors of the will. There are three benifactors to the family home, my sisters and I. I live abroad and have done for a long time.

The house has failed to sell in the 12 months, largely due to a legal issue with the back garden, we are told this will take a solicitor a number of years to resolve and then it should sell easily as it is in a good location etc.

Now the executors (my sisters) have decided to rent it out in the meantime which I agree with, however one of the sisters who would be forceful to say the least is dictating that she wants to take most of the rent for the hassle of managing the property i.e. wants to charge everytime she gets a call etc.

I offered that each of us should manage it for a year (I should be home next year) and take 1000 euros for expenes but she said that if she gets involved she wants most of the rent throughout the period of renting. She also has determine that I have no say as I am not an executor and has somewhat bullied my other sister into agreement. Please note, reason does not work with this individual.

Would anyone be able to advise on possible options I would have, I understand the executors position is powerful but this feels like a form of theft which I cant accept.
 
Hi STM, not really, the 3 of us really just want to sell it but its not possible due to the land issue currently it seems.
 
I'd be questioning why the legal side will take a number of years to resolve.

I bought a holiday home a few years back and there were some boundary and access issues ... 3 parties involved plus me the buyer .. and one of them was living abroad.

The process of sorting it was slow but all was sorted within 12 months.
 
Maybe find out what the current fees an estate agent would charge to manage the property and present these to your sister or as Albacorea says get an agent to rent it?
 
AlbacoreA and Tintagel thanks for the inputs, that was my preferred option i.e. to get a agent to handle the majority of things, however the sister who is leading the charge on this still reckons she would have to do work connected i.e. give go ahead to fix something, tax returns, etc as I mentioned she does not see reason.

I was really just hoping there was something that dictated she was only able to take "reasonable expenses" if handling the rental.
 
As co-owners (my assumption) you'll all be liable for tax. You'll all have to give permission. or the sister could use the rent to upgrade the property before acquiring it for herself. It makes more sense to have an agent manage the property, an account handle the accounts and bank the rent to pay for expenses of these professionals rather than paying an amateur to do the same thing badly. When the place sells then spilt what's left at that point.

Can't you insist on the house being sold legally? It will sell if its cheap enough. That's your stick to get her to agree on using an agent.
 
Hi AlbacoreA, thanks again for that and I agree although the tax thing is a little confusing as it appears the estate is still liable, but that's just a technical point.

Not sure how I can insist it is sold (it went sale agreed twice but the buyers pulled out over the garden issue) , I know there is a 12 months expectation relating to the sale (Succession Act) and would happily sell it now at a very reduced price to get out of this family mess but knowing her it would need to be written in law that I have this right and I am not sure that I do ?
 
You might wish to look at other threads which is not too disimilar

http://www.askaboutmoney.com/showthread.php?t=184160
http://www.askaboutmoney.com/showthread.php?t=139062&highlight=Force

I don't have any experience of inheritance to offer. I just a vague memory of this being discussed previously. I maybe mistaken.

From experience though too many cooks trying to manage a rental is just a royal pain. Its a business, so you need someone to make decisions based on financial reason. Family and such find it hard to be detached and also to look at it solely as a business.

You could take a long term view and let her manage it, but insist on full accounts done by an accountant. Also a time limit on the rental period. Otherwise it go on indefinitely. But a 1-3k might be worth for no hassle, stress and good relations in the future.
 
An executor may only recoup reasonable out of pocket expenses from an estate. An executor cannot charge for time allocated to the work on the executor ship. For example, an executor cannot charge for the time taken to meet with solicitors, EAs, etc but can recover petrol costs to travel to such meetings as well as any fees these professionals may charge.

As pointed out previously, as an equal owner of the property, you may have a tax bill for any income generated by renting. Why accrue a bill for income you won't receive?
 
I think the estate is in probate if that's the correct term.

So does the estate get the income and pay the tax?
 
Albacore A - good advice and thanks for the links, its a relief to see other siblings having issues that I never thought I would have !

mathepac - spot on the first point, this is something I am trying to reference in law or policy but cant find anything specific to qoute.

The second point is of course true too, but as the house is technically part of the estate and I was told by someone in Revenue that will remain the case until sold, the tax liability is somewhat removed for the person. It will have to be paid but not as individuals it seems.
 
You might want to look at the bigger picture. The cost of the expense vs the share when the house is sold. The main reason I'd not be too complacent as families can procrastinate on these things for decades and the house might never be sold.

I know a couple of examples where this delay started at the peak, and only ended (and property sold) at the bottom. The inheritance thus was greatly reduced when finally received. I doubt any benefactor would have been happy with that outcome.

The market is different now, depending on location and desirability of the property. So a delay probably might increase the value, or not cost that much. Impossible to know.
 
Jakeredwood said:
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mathepac - spot on the first point, this is something I am trying to reference in law or policy but cant find anything specific to qoute.

The second point is of course true too, but as the house is technically part of the estate and I was told by someone in Revenue that will remain the case until sold, the tax liability is somewhat removed for the person. It will have to be paid but not as individuals it seems.
Click to expand...
There may be some further information here here (Government Website) http://www.citizensinformation.ie/en/death/the_deceaseds_estate/
 
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