How to deal with a house left to 4 children

Brendan Burgess

Brendan Burgess

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A friend of mine has asked about this.

The father died after the mother and left the house to be split equally between the 4 children.

A solicitor is the Executor and has said that he will do as the will says and transfer the house to the 4 children so that they will own it equally.

Then they can do what they want with it afterwards - it's none of his business.

But the children get on well and one of them has agreed to buy out the other three.

Can the Executor sell the house to the one child and distribute the proceeds?

Is there any advantage in doing it this way? Reduced legal fees? Reduced stamp duty?

Brendan
 
Assuming that the Executor does transfer the house to the 4 children, what is the process and the cost?

Is it the same as a full conveyance? Does it cost the same?
 
My mother's will was similar. Leaving the house (and some other cash assets) to be shared equally between the 5 children. The executors (two of the children) instructed the solicitor to sell the house and share out the net proceeds. I.e. the house never went into the names of the 5 beneficiaries. It was sold on the open market to an unrelated third party. But I presume that it could just have easily been sold to one of the beneficiaries if they wanted to buy it? And that would have saved on some of the normal selling costs.

Is the solicitor being too rigid in their interpretation of the will here? Or maybe it explicitly says that the house should be transferred into the names of the beneficiaries rather than being sold by the executors/administrators/estate? Could the executors get a second legal opinion?

Edit: sorry, just realised that you said that the solicitor is the executor. Is that common? Seems like a potential conflict of interests to me?
 
A will could say
1) The estate to be divided between the 4 children (The Executor can sell the house)
2) The house to be sold and the estate to be divided between the 4 children. (The Executor must sell the house)
3) The house to be transferred to the 4 children and the rest to be divided between the 4 children. (The Executor must not sell the house?)

I gather that it's number 3.
 
Brendan Burgess said:
A will could say
1) The estate to be divided between the 4 children (The Executor can sell the house)
2) The house to be sold and the estate to be divided between the 4 children. (The Executor must sell the house)
3) The house to be transferred to the 4 children and the rest to be divided between the 4 children. (The Executor must not sell the house?)

I gather that it's number 3.
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2 - one of the kids buys the house from the executor/s at the value which was used for probate and in turn saves them money in estate agents fees as it wouldn’t be going on the open market perhaps ?
 
Pinoy adventure said:
2 - one of the kids buys the house from the executor/s at the value which was used for probate and in turn saves them money in estate agents fees as it wouldn’t be going on the open market perhaps ?
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But, according to @Brendan Burgess, scenario 3 is the relevant one here and the other two are presumably irrelevant. That being the case then isn't it case that the solicitor/executor has no latitude in the matter and must adhere to the instructions in the will and transfer the property into the joint names of the 4 children rather than selling it to one of them even if they would like to do this? I presume that this would involve the normal conveyancing process and costs, but IANAL.
 
ClubMan said:
But, according to @Brendan Burgess, scenario 3 is the relevant one here and the other two are presumably irrelevant. That being the case then isn't it case that the solicitor/executor has no latitude in the matter and must adhere to the instructions in the will and transfer the property into the joint names of the 4 children rather than selling it to one of them even if they would like to do this? I presume that this would involve the normal conveyancing process and costs, but IANAL.
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Who would cover the costs of conveyance? The beneficiaries of the will ?

Surly to avoid a double conveyancing process and costs the executors could just sell the property to the sibling who wants to buy it ?
 
ClubMan said:
That being the case then isn't it case that the solicitor/executor has no latitude in the matter and must adhere to the instructions in the will and transfer the property into the joint names of the 4 children rather than selling it to one of them even if they would like to do this? I presume that this would involve the normal conveyancing process and costs, but IANAL.
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IANAL either.

But once all four siblings agree on the valuation presumably there is no substantive difference between the executor selling to one of them and distributing the proceeds than simply transferring ownership to all four of them. Maybe there are issues here regarding stamp duty and land registry fees.

My guess (and it's just a guess) is that the executor would be a naturally risk-averse third party and doesn't want to be blamed if something goes wrong at any point. So for the executor it's simplest to stick to the precise terms of the will and distribute to all four siblings and then let them sort it out afterwards.
 
Pinoy adventure said:
Who would cover the costs of conveyance? The beneficiaries of the will ?
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The estate via the executor. Who happens to be the solicitor who will presumably also do the conveyancing. Which is why it seems like a bit of a conflict of interests to me. But that's off topic and maybe the legal obligations of the solicitor as executor means that any risk of conflict of interests is mitigated sufficiently...
Pinoy adventure said:
Surly to avoid a double conveyancing process and costs the executors could just sell the property to the sibling who wants to buy it ?
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I'd agree with @NoRegretsCoyote's interpretation above.
But IANAL.
 
Had something similar for an estate for which I was executor.

The two siblings had the option of me selling the property or transferring into their names & let them dispose of it.

They opted for the latter, which I was just as happy about (even though it did mean an extra cost on the estate); as they couldn't then bicker with me on the sale price.
 
The other issue here is why the solicitor who presumably helped to draw up the will did not point out how potentially inflexible the wording was . Is this not why we are all supposed to get a solicitor involved in making a will - for them to see through and advise on all the potential issues ?
 
JoeRoberts said:
The other issue here is why the solicitor who presumably helped to draw up the will did not point out how potentially inflexible the wording was . Is this not why we are all supposed to get a solicitor involved in making a will - for them to see through and advise on all the potential issues ?
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Maybe the deceased was apprised of this and was happy with it? It was their private business and a matter between them and the solicitor.
 
ClubMan said:
Maybe the deceased was apprised of this and was happy with it? It was their private business and a matter between them and the solicitor.
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Maybe, but hopefully he was told the difficulties it would pose. I don't think any parent wants to leave a difficult scenario for their kids. And I doubt the father would expect someone would have to be posting on AAM for possible solutions.
 
I got a copy of the will in this case and it seems unclear to me.

1) I bequeath all my property to my 4 children in equal shares.
2) If any of the children wants to buy the family home, she or he shall pay 1/4 of the market value to each of the other children.

I presume that this wording allows the Executor to sell the home to one of the children directly and collect 3/4rs of the sale price and adjust the bequests accordingly?

Surely, it should have been worded "If any of the children wants to buy the family home, the Executor shall sell it to them at the market price"

Brendan
 
mathepac said:
That wording seems perfect to me
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Not really. It could actually mean that one can pay to the executor 75% of the market value in order to buy the others out and the executor then adjusts the distribution of the estate. Or it could mean that the executor must transfer the property into all four names and then, after probate is completed, one can pay the others 75% of the market value outside of the remit of probate altogether. The latter could involve two conveyancing processes/costs.
 
ClubMan said:
Not really. It could actually mean that one can pay to the executor 75% of the market value in order to buy the others out and the executor then adjusts the distribution of the estate. Or it could mean that the executor must transfer the property into all four names and then, after probate is completed, one can pay the others 75% of the market value outside of the remit of probate altogether. The latter could involve two conveyancing processes/costs.
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I don’t see why it it must transfer into 4 names first ?
It would be sold at market value minus 25% for the child buying it so the child buying it would be paying on 75% of the full market value.
Once executor receives the 75% they could distribute it too the remaining 3 beneficiaries
 
Firstly, on any situation like this, I would advise all 4 children to get independent legal and tax advise and not depend on the one solicitor and especially not on the one who is currently dealing with the estate.

I would imagine probate will need to be completed including the affadavit of assets which will value the house so all 4 know potentially what is involved here
 
ClubMan said:
Not really. It could actually mean that one can pay to the executor 75% of the market value in order to buy the others out and the executor then adjusts the distribution of the estate. Or it could mean that the executor must transfer the property into all four names and then, after probate is completed, one can pay the others 75% of the market value outside of the remit of probate altogether. The latter could involve two conveyancing processes/costs.
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That is the ambiguity I see in this wording.

However, it looks to me as if the intention was that the Executor should sell it to the buyer or else why put it in the will at all?
 
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