Executor question

[NewbieProbater]

My mother died in January. I am the sole executor of her will, the estate to be split 50/50 between my sister and I. My mother owned a house outright, there is very little cash but enough to pay the funeral bills, etc.

I would like to buy my sister out of the house and we tentatively agreed a price (through a casual conversation) before the corona virus crisis. I would need to fund her half mostly through a mortgage. I agreed what I thought was absolute top-dollar price, largely because my sister fell for an estate agent's spiel (ie quote highest price to get the house on their books).

I realise that nobody can say for sure what will happen to the property market but I think prices will fall and, if this is the case, I'm not prepared to pay the same price as before. I have said to my sister that I think we should put the house on the market as I don't want to buy it anymore. My sister agrees that the value will fall and has suggested that we rent the house out until prices recover.

There is no way I am going to enter into any financial arrangement with my sister (long back story but there are several reasons my mother made me sole executor). As executor can I push through a sale of the house or does my sister have to agree to it?

I understand that my duty as executor is to act in the best interests of all the beneficiaries and I am not trying to rip my sister off but I only want to pay a fair market price at the time I buy it.

The alternative is, I suppose, to leave the house empty until prices recover.

Thanks.

Is the value of the estate substantial enough that inheritance tax will need to be paid? There is a world of difference between a probate valuation for IHT purposes and a sale asking price, which will always be much higher. As executor you’ll want to get a probate valuation and then the sale estimates. The price you agree should be somewhere between the two and don’t go with just one estate agent for the sale estimates.

In terms of leaving it empty to wait in prices - I think you have a duty as executor to wind up the estate within a year?

Thank you for your response Herman

There's no IHT due, two nil-rate bands and two residence nil-rate bands. Estate nowhere near that by several hundred thousand! The probate value is about 25K lower than the price I was willing to pay but I don't think that matters.

Interesting that I may need to wind the estate up within a year. I cannot countenance owning the house jointly with my sister, much less having to deal with renting it out jointly.

Thanks

I’m in a similar position but tax has to be paid (within 6 months or CGT is due). The property went on the market but of course corona got in the way. My sibling is living in it rent free and I think that 6 months of that is enough; I would rather rent it after the 6 month point but really want to be out of this joint decision making etc etc . The executor’s year was something the solicitor mentioned (can’t deal sensibly direct so got a professional to handle it!)

Sounds like we have similar siblings unfortunately.

I suspect I may also have to go down the solicitor route.

Well good luck to you in that case! I’m using someone I’ve worked with in my professional capacity who is based in the country and would happily recommend them; feel free to PM. There’s no need to use someone local. My sympathies to you; this makes it all much harder to grieve.

Thank you. I will pm you next week.

I know someone who sent the house to auction. Quick easy and fast.

Thank you. I am concerned that my sister won’t want to sell though and if I can force a sale.

Your sister has no say in the matter. The house belongs to the estate. She is entitled to some of the proceeds when the house is sold but she does not currently own any part of the property.

Thank you prh47bridge.

Is it therefore up to me to decide a fair price?

For various reasons I really want to buy this house but I can see a huge row if I don’t pay what we previously agreed. Mind you, given other issues, the relationship is pretty much screwed anyway.

I was answering the question of whether you can sell the property without her consent. I thought you had given up the idea of buying it yourself. According to your OP you have told your sister that you no longer want to buy it.

If you intend to buy it yourself you have a conflict of interest and fall foul of the self-dealing rule. You need your sister's consent or, failing that, the permission of the court. Unless you are prepared for a difficult battle you need to pay your sister the amount originally agreed or accept that you won't be able to buy this house.

If you don't intend to buy it yourself you still have a duty to act in the best interests of the estate. You must sell the house for the open market value. If your sister believes you have sold it for less than the market price she can take action against you. If she wins you will have to make up the shortfall yourself. It is, therefore, risky for an executor to accept a low offer for a quick sale.

The reason the house in the case I know of went to auction was several people were told if you want it bid on it.

Thank you for your replies.

Looks like I will have to get my sister’s consent to a new price or put the house into auction or with an estate agent when the current crisis is over.

Apologies, I should have been clearer in my op, I told my sister I wouldn’t buy it at that price anymore and maybe we should put it on the market.

Sometimes it is best to sell.
Your sister will see her money disappear but you still have a house, that would go out in value. It never ends well.

a duty as executor to wind up the estate within a year?

I have not gone across this deadline.

In my experience, if IHT is due, it must be paid by the sixth month after the death. Probate will only be granted once IHT has been paid.

Executors are required to act in the interest of all beneficiaries

I would not want to enter into discussions about the value of the house. If you cannot easily agree a fair price, I would put it on the market and give it three months. Your sister may be more reasonable about the price when no offers have been made.

It doesn't seem fair to me that the 'sensible' sibling who does the executor role is rewarded by not being able to purchase.

How you get a fair solution

a duty as executor to wind up the estate within a year

Hadn't spotted that comment earlier. There is no such duty. There is a deadline for submitting the IHT form but no set time limit for settling the estate.

What’s the “executor’s year” my solicitor was talking about?

The executor's year is an accepted time frame to allow the executors to gather information and check for debts before distributing the estate. Given that they may be held liable if any mistakes are made, an executor may be advised not to release any funds during the 12 months following the death. However, it is not a maximum. A complex estate can take years to settle.

Thank you