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Original poster

Conflict of interest- inheritance

138 replies

hopeishere · 21/02/2022 18:12

Is this a conflict of interest:

Property left to A, B and C. Equal shares. Former childhood home.

A is an executor.

A has lived rent / bills free in property for eight years. Had previously own home but sold it.

A is interested in buying B and C's share. Can they do this assuming they pay a fair and mutually agreed price?

OP posts:
WouldIwasShookspeared · 21/02/2022 18:14

Yes. If all are happy and feel the price is fair according to market value.

MagratsDanglyCharms21 · 21/02/2022 18:16

Of course, if B or C offer a larger sum to buy the other 2 out, or if it is put on the market and someone else offers more then so be it.

OinkyO · 21/02/2022 18:17

Don't see why not. The solicitor should be able to help with a deed of variation.

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General money
DetailMouse · 21/02/2022 18:17

Yes if all parties agree, just like selling anything else you own, B & C can sell their share.

Tallerthanmost · 21/02/2022 18:18

In the current market getting a fair price will be interesting.
Most properties seem to go over the valuation and have a bidding war. How would you allow for this?

OinkyO · 21/02/2022 18:18

Oops posted too soon. So it can be sorted before the inheritance. Or once inheritanted can sell to whoever they want.

FelicityPike · 21/02/2022 18:23

Absolutely.
Get the house valued by an agent, split 3 it three ways. A then pays B & C and A should pay all fees too.
IF B & C agree obviously.

HomeHomeInTheRange · 21/02/2022 18:33

@Tallerthanmost

In the current market getting a fair price will be interesting. Most properties seem to go over the valuation and have a bidding war. How would you allow for this?
My advice would be not to get bogged down in thrashing out a few £k either way, because A,B and C will all benefit from the saving on Estate Agents fees, solicitors fees getting enquiries answered etc, the hassle of emptying out the property, the stress of a long wait for a buyer to complete, maybe dropping out, etc.

Just get some valuations from good local EAs.Agree a price probably somewhere between 'we would put it in the market at...' and 'we would hope to achieve...'

Pedallleur · 21/02/2022 18:37

Estate agents will always value high. Get a rics valuation. A surveyor who looks at what the property is worth not what it could be worth.

MichelleScarn · 21/02/2022 18:39

Are B & C wanting it to be taken into account A living rent and bill free for 8 years?

AdaColeman · 21/02/2022 18:40

It's the part about A having lived rent and bills free for eight years that will cause problems for A.
Since B & C may feel that they deserve larger shares of the house sale to compensate for those free eight years.

If the will states equal shares, then tough luck on B & C. Or perhaps A has earned their equal share, in looking after an elderly relative for instance?

With professional independent valuations to protect the interests of B & C, there's no reason why A shouldn't buy out B & C, if a price can be agreed on. There would be a saving of estate agent fees as a plus.

What about the contents of the house, personal effects etc? If there is anything of value, perhaps it should be sold or divided between all three of them, rather than A retaining it all.

Original poster
hopeishere · 21/02/2022 18:59

@MichelleScarn

Are B & C wanting it to be taken into account A living rent and bill free for 8 years?
No. In retrospect they should have challenged this at the time. A wasn't caring for anyone while living there.
OP posts:
DetailMouse · 21/02/2022 19:01

Who thinks it might be a problem and why?

Original poster
hopeishere · 21/02/2022 19:03

What about the contents of the house, personal effects etc? If there is anything of value, perhaps it should be sold or divided between all three of them, rather than A retaining it all.

There is some valuable stuff but plans are it will be sold. I guess A will benefit from items like a TV and appliances already being in the house but I don't think anyone will quibble over those.

The house is a mess. Parent left it in state and A has now just piled all their stuff around Parents so it's like a jumble sale. It's depressing. I can't see A ever tidying it up and making it a proper home.

OP posts:
Original poster
hopeishere · 21/02/2022 19:05

@DetailMouse

Who thinks it might be a problem and why?
I was just wondering if it was a possible conflict of interest as A is responsible for getting the house valued for probate and could they influence the agent (a friend) to go for a lower price in their favour.
OP posts:
Bollindger · 21/02/2022 19:08

If A is willing to buy for a fair price, then you have a quick sale, not Estate agents fees, no time or effort to do the place up. which can cost thousands and money in your pocket, as A will want it sorted ASAP,
Oh you must rememeber ro get A to now pay all bills from Date of Death and also Rent? to the Estate,

burnoutbabe · 21/02/2022 19:10

If a goes for low probate value then sells quickly at high price, the probate office cab query (and more capital Gaia tax will be due)

But b and c can get their own valuation before agreeing to a sale.

DetailMouse · 21/02/2022 19:10

The probate valuation isn't necessarily the one it would be sold for though. B &C can get it valued and negotiate. They can't be made to sell if they don't agree with the price

ivykaty44 · 21/02/2022 19:10

An agent isn’t going to be influenced on a private valuation, as if it goes to probate and the valuation is to low then it will be the agent that looks stupid

ehb102 · 21/02/2022 19:15

Just a note: My estate agent was fixed price, very low, and got us £50k+ more than the first valuation. The days of a percentage are going. Internal sale might not be that great.

GreenClock · 21/02/2022 19:17

Get three agents to value it, maybe?

If I were B or C I’d jump at the chance not to have to clean it up and prepare it for market.

TheNoodlesIncident · 21/02/2022 19:22

I was just wondering if it was a possible conflict of interest as A is responsible for getting the house valued for probate and could they influence the agent (a friend) to go for a lower price in their favour.

At least three valuations should be sought from disinterested professionals. I wouldn't accept a valuation from a friend of the inheritor looking to purchase other shares because of any potential bias. It needs to be done properly.

Are there other executors aside from A?

filka · 21/02/2022 19:30

@Tallerthanmost

In the current market getting a fair price will be interesting. Most properties seem to go over the valuation and have a bidding war. How would you allow for this?
A fair price is the price agreed between a willing buyer and a willing seller. Since the buyer is interested in minimising the price but the seller in maximising it, they have to end up at a price satisfactory to both, or the sale doesn't happen.

For probate and IHT purposes, HMRC usually accepts a price based on 3 quotes from EAs, but if there is a subsequent sale in a short timescale the price for tax purposes can be adjusted up (or, I think, down).

If the proposed sale from B&C to A is fairly close to the date of death/probate then the same EA valuations can be considered by A, B & C as indicative of a fair market valuation for the sale too. My recollection is that my EA quotes were pretty much spot on (in 2016). You can also look at Zoopla or Rightmove for previous recent sales of similar properties in the same street/area.

Since you need three quotes for probate, one approach might be for each of A, B & C to choose one agent to provide the probate quotes, to avoid any perception of A taking advantage of his position as executor.

RB68 · 21/02/2022 19:33

Who is executor? It is their responsibility to deal with this. The house and contents that don't belong to A are part of the estate. The estate bears the cost of any legal work. Any valuable contents should be valued, then either A buys from the estate at 2/3rds cost if they want them or they are sold/auctioned and money goes into the estate. If I were executor and A wanted to buy out the others I would get 3x valuations, agree a median/price with all 3 and transfer the house into A name. As stated any legal costs are the estates. Any incidental barely valuable things I would agree an amount with A and put it into the pot (from A) and then it is divided with the remains of the estate . Its not really difficult - but using a solicitor although it will cost maybe a way to ensure all are happy with the agreement reached.

With regards to 8 yrs rent free - you could poke it and look at the intent of the owner - was it something they did as a parent being kind - ie a gift, or was it without the parents knowledge at the time (ie in care or something?) in which case its a bit more tricky - and the 7 years before death become part of the estate (it would be worked out at going rate and then there is a year on year decrease of the value etc but a solicitor could easil do that) but honestly I would want to let that part go unless I thought they were really CF so long as they pay full market rate for the rest. The clean up for market and the house clearance are worth avoiding though - painful having done 2 over last 18 mths

RB68 · 21/02/2022 19:36

you can challenge who is executor - before probate etc. The .gov website has quite comprehensive guidance on the whole process. But if A is sole executor and you don't trust them you could maybe talk them into letting a lawyer do it in terms of reducing their admin, ensuring a fair process and getting it sorted asap