Buying out 1 of 2 siblings when estate settles (Advice?)

[Tom_G_CPA]

Hello all,

I have a question about how two heirs (in Maine) should structure the ownership of a property.

· Heir # 1 inherited 1/3rd of a fathers house (via his will) and the estate settles in 2010.

· Their are three related heirs... # 1, 2 & 3. Each gets 1/3 of the house and land. (one parcel and one house on the land)

· The executor agreed for Heir # 1 to buy the house and property so that I #1 is the sole owner and holds the deed and mortgage.

· Heir #2 will be paid aprox. 1/3 rd of the appraisal value upon the purchase (Cash our Refi) of the home by Heir # 1.

· Heir #3 wishes to keep his interest in the house and land but not be on any deed or mortgage.

· Heir #1 and #3 trust each other (without question) and the executor has agreed to consider this arrangement.

What is the best way to structure the arrangement between # 1 and # 3?

The goal is to hold the property until the market recovers (5 years or so) and Heir #1 to buy out Heir # 3 completely... or for Heir # 1 to sell the place (in 5 years or so) and split the net proceeds 50/50 with Heir #3.

PS: As the sole owner, Heir #1 intends to have all tax benefits and they are going to have an attorney structure the deal for them...

As an uncle/CPA, I am curious to see how close this website will be to the final outcome. Alot of my clients quote this web site. So here it goes.


Thank You

- Tom G. CPA

 

[army judge]

Hello all,

I have a question about how two heirs (in Maine) should structure the ownership of a property.

· Heir # 1 inherited 1/3rd of a fathers house (via his will) and the estate settles in 2010.

· Their are three related heirs... # 1, 2 & 3. Each gets 1/3 of the house and land. (one parcel and one house on the land)

· The executor agreed for Heir # 1 to buy the house and property so that I #1 is the sole owner and holds the deed and mortgage.

· Heir #2 will be paid aprox. 1/3 rd of the appraisal value upon the purchase (Cash our Refi) of the home by Heir # 1.

· Heir #3 wishes to keep his interest in the house and land but not be on any deed or mortgage.

· Heir #1 and #3 trust each other (without question) and the executor has agreed to consider this arrangement.

What is the best way to structure the arrangement between # 1 and # 3?

The goal is to hold the property until the market recovers (5 years or so) and Heir #1 to buy out Heir # 3 completely... or for Heir # 1 to sell the place (in 5 years or so) and split the net proceeds 50/50 with Heir #3.

PS: As the sole owner, Heir #1 intends to have all tax benefits and they are going to have an attorney structure the deal for them...

As an uncle/CPA, I am curious to see how close this website will be to the final outcome. Alot of my clients quote this web site. So here it goes.


Thank You

- Tom G. CPA

You can't own a home without being on the deed, except in some community property states by virtue and benefit of marriage.

I won't bore everyone here with reasons why this isn't allowed, but it isn't, except as noted above!

I don't see how H1 and H3 plan to structure their sidebar deal even with an attorney doing the dirty work?

Has everyone forgotten the Statute of Frauds?

It might do all well to review the Statute of Frauds before doing anything.

All of the above considered, as long as H1 does what is promised for H3, I suspect all will be well.

What they propose (H1 & H3) isn't legal, but nothing prevents them from executing their scheme.

But, what happens to that arrangement upon the death of H1 or H3 or both?