Beneficiary wanting to buy out other beneficiaries from inherited property

glyndwr1999

Hi, new to the forum, joined after seeing various posts on popular search engine about similar topic.

Ok, I am an executor of a will fro my late uncle that left his propert to 12 beneficiaries all inheriting equal portions, I've each beneficiary inherits 1/12 of the estate both monetary and property.
I have had the property valued by 2 seperate estate agents, both were very similar, and both advice marketing it at £47k accepting offers for the property around £44k or lower for a cash sale.
One beneficiary has offered £44k for a cash sale.
This would of course save the estate agents fees of £1500 plus vat, plus other fees like EPC certificate, possible solicitors conveyancing fees for a the sellers plus the possible beneficiary purchaser another possible £1200. So quite a lot in fees.

It is feasible and possible for one beneficiary to buy out the rest legally, if so would I need a deed of variation or could it be as simple as him pay the cash into the estate bank account and I as the executor arrange with the land registry to transfer the ownership into his name once the cash is already in and cleared into the estate tax bank account( he is quite wealthy so does have cash available, and doesn't need to mortgage)

Do all beneficiaries have to agree to a cash sale, and do you consider a cash offer a fair and reasonable offer. I beleive it's fair as once all fees are taken into consideration, it all that would be obtainable if sold at as,ing on the open market.
Also, if done as a cash sale, would 2nd home stamp dirty be applicable, or does the will need to be changed to show that the beneficiary wanting to buy out the others has inherited all the property so no stamp duty is required?

I am hoping I don't need to consult at 12 beneficiaries as there's 2 families involved that don't necessarily get on with each other. I have found dealing with the 12 has been quite stressful already,
Any help greatly appreciated.

Savvy_Sue

glyndwr1999 wrote: »

or does the will need to be changed

I'm just going to comment on this little bit.

If you went for changing the will - often called a Deed of Variation - then anyone adversely affected by the change would have to agree to it. You might argue that this didn't adversely affect anyone, but it could be interesting to see what happened if any of them thought this DID adversely affect them. 'Interesting' as in 'not something I'd want to oversee'.

Are you one of the 12?

What does the will say?

Would any of the others be in a position to buy the house outright?

Would any of them want to do so?

If you're the sole executor, you don't actually have to consult the beneficiaries much, if at all, but if any of them are going to be upset by your decisions then getting proper legal advice might be worth the fee ...

getmore4less

No DOV just a normal sale of a property from an estate to an individual .

With 12 beneficiaries keeping the place would probably be madness.
I can think of situations where it could make sense but unlikely and difficult to set up.

leaving aside the valuation for probate for now...

taking note of SS questions above.
As executor your obligation is to get the best value for the assets but being reasonable in terms of timing/offers/effort.

A quick cash sale to a beneficiary at a sensible price may be the best result for everyone, trying an open market sale might only result in few months delay and a few extra £ after expenses.

Also results in no ongoing costs and less work for the executors.

You could make part of the deal they are responsible for clearance(after all the stuff of value has been liquidated) to reduce the estate costs and executor time.


I a situation like this a quick poll of the beneficiaries might be a sensible move to see if anyone else wants the place or objects to the current valuations/offer.

Are any of the beneficiaries under 18?


if everyone is happy this might avoid the need for a paid for valuation.

What does your research of the property market and selling prices come up with as a decent price for this place?

Land_Registry

getmore4less has covered it with thoughts and Qs and if the sale/transfer to one of the beneficiaries went through it would simply be a case of you, as the named executor in the probate, transferring ownership to him/her

The only think I would add is that although they have inherited 1/12 each of the money and property the latter can't be split into 12 pieces. In essence they have a 1/12 of the value of the property so in some ways your responsibility is to turn it into that cash amount and divide it accordingly.

That was presumably the deceased's intention and not that they have to keep the property between 12 of them - he wanted them all to derive some financial benefit

glyndwr1999

Hi all,

To answer a few of the posted questions....

I am the sole executor and have already obtained the grant of probate in my sole name

I am also one of the 12 beneficiaries

The property is in need of total renovation, new kitchen bathroom, central heating, total redecoration and plastering, etc... You get the idea.....

The will stated all beneficiaries have an equal portion of the finalised estate. In my knowledge that meant selling all possessions and the house, pooling all the money in a executors account, paying all outstanding debts, then divining equally the remaining funds to each of the 12.

2 other beneficiaries (brothers) expressed an interest in buying it but have no funds to do so, they would also be unable to obtain a mortgage. They would even fall short of the money if I paid them out early to buy the everyone outright. Then They wanted to do paid work on the property to upgrade it to obtain a higher selling price, which on paper sounds ok, but who pays them for their time, who's money pays for the materials, like kitchen bathroom decorating throughout. I thought this path was too messy and unpredictable. I had no objections to them buying it but I needed to see the cleared funds before transfer of ownership, they got abit nasty at this point and said if they couldn't buy it they would object to any beneficiary buying it.

Due to this I don't think any offer would satisfy the unreasonable behaviour of the above 2 beneficiaries. I feel personally that the beneficiary cash offer of what the estate agents agree was an offer that would sure the property on the open market is absolutely fine, but am also cautious in case these 2 disagree and make a complaint to someone.

I have had 2 valuations form professional estate agents in writing stating in their view to accept offers in or around £44k, lower for cash for a quick sale.

There are no beneficiaries under 18.

Thanks

Yorkshireman99

glyndwr1999 wrote: »

Hi all,

To answer a few of the posted questions....

I am the sole executor and have already obtained the grant of probate in my sole name

I am also one of the 12 beneficiaries

The property is in need of total renovation, new kitchen bathroom, central heating, total redecoration and plastering, etc... You get the idea.....

The will stated all beneficiaries have an equal portion of the finalised estate. In my knowledge that meant selling all possessions and the house, pooling all the money in a executors account, paying all outstanding debts, then divining equally the remaining funds to each of the 12.

2 other beneficiaries (brothers) expressed an interest in buying it but have no funds to do so, they would also be unable to obtain a mortgage. They would even fall short of the money if I paid them out early to buy the everyone outright. Then They wanted to do paid work on the property to upgrade it to obtain a higher selling price, which on paper sounds ok, but who pays them for their time, who's money pays for the materials, like kitchen bathroom decorating throughout. I thought this path was too messy and unpredictable. I had no objections to them buying it but I needed to see the cleared funds before transfer of ownership, they got abit nasty at this point and said if they couldn't buy it they would object to any beneficiary buying it.

Due to this I don't think any offer would satisfy the unreasonable behaviour of the above 2 beneficiaries. I feel personally that the beneficiary cash offer of what the estate agents agree was an offer that would sure the property on the open market is absolutely fine, but am also cautious in case these 2 disagree and make a complaint to someone.

I have had 2 valuations form professional estate agents in writing stating in their view to accept offers in or around £44k, lower for cash for a quick sale.

There are no beneficiaries under 18.

Thanks

If you aleady have probate then they are too late to object. You have every right to sell the property and their chance of getting any objection heard is negligible.

getmore4less

there is little the brothers can do now other than make a better offer than you have.

They would have to go to court to stop the sale and on the only ground it is one of the beneficiaries would get thrown out or cost a lot of money they don't have.

Their offer seems to be keep the house in the estate pay them from the estate to add value and hope for the best.

Your other offer is £44k in cash.


I don't think they would win a case on the basis of their offer is better.

If they are the only objectors then it may be prudent to consider an announcement in the local paper for better offers if there is a functional kitchen and bathroom then mortgage may be possible if not cash.

or formally ask them to make an offer to buy the place for more than the current £44k on the table.

Worst case is you just let an EA market it and take the hit on your 1/12 or get the support of the other 8 not involved so far to make the brothers see sense


What's it worth done up?

glyndwr1999

Hi all,

I have considered putting the house on the open market, but there seems no real gains can be made when fees and costs are considered.
Also, if the beneficiary who made the 44k cash offer bids the same offer and no other offers come in then in reality the estate looses as out of the 44k now comes ea fees plus solicitors, p,us the beneficiary buying will also have to pay stamp duty as it'll be a 2nd home, whereas if he inherited it entirely there'll be no duty to pay.
All I'm trying yo do is be fair and save the estate and myself time and money in fees etc.

When fully refurbished the ea expect to market the property at around 70k, but the property does fully refurbishing, my uncle was a heavy smoker and hasn't really done anything to house in 40 years. It needs kitchen, bathroom, full central heating, ea would estimate a 15 to 20k refurb cost.
To clarify I am not the beneficiary making the offer, although am his brother. All 12 beneficiaries are all brothers sisters from either side of family.

Thanks

Yorkshireman99

glyndwr1999 wrote: »

Hi all,

I have considered putting the house on the open market, but there seems no real gains can be made when fees and costs are considered.
Also, if the beneficiary who made the 44k cash offer bids the same offer and no other offers come in then in reality the estate looses as out of the 44k now comes ea fees plus solicitors, p,us the beneficiary buying will also have to pay stamp duty as it'll be a 2nd home, whereas if he inherited it entirely there'll be no duty to pay.
All I'm trying yo do is be fair and save the estate and myself time and money in fees etc.

When fully refurbished the ea expect to market the property at around 70k, but the property does fully refurbishing, my uncle was a heavy smoker and hasn't really done anything to house in 40 years. It needs kitchen, bathroom, full central heating, ea would estimate a 15 to 20k refurb cost.
To clarify I am not the beneficiary making the offer, although am his brother. All 12 beneficiaries are all brothers sisters from either side of family.

Thanks

As executor your prime responsibility is to administer the estate properly. If the estate decided to renovate it then CGT would be an issue. Don't allow yourself to be bullied. The dissidents really have no case.They need their bluff calling. You could even put it up for auction. The bottom line is just put it up for sale and have done with it.

getmore4less

glyndwr1999 wrote: »

Hi all,

I have considered putting the house on the open market, but there seems no real gains can be made when fees and costs are considered.
Also, if the beneficiary who made the 44k cash offer bids the same offer and no other offers come in then in reality the estate looses as out of the 44k now comes ea fees plus solicitors, p,us the beneficiary buying will also have to pay stamp duty as it'll be a 2nd home, whereas if he inherited it entirely there'll be no duty to pay.
All I'm trying yo do is be fair and save the estate and myself time and money in fees etc.

When fully refurbished the ea expect to market the property at around 70k, but the property does fully refurbishing, my uncle was a heavy smoker and hasn't really done anything to house in 40 years. It needs kitchen, bathroom, full central heating, ea would estimate a 15 to 20k refurb cost.
To clarify I am not the beneficiary making the offer, although am his brother. All 12 beneficiaries are all brothers sisters from either side of family.

Thanks

SDLT either way.

They are paying the estate the cash to pay out the other beneficiaries that's the consideration for SDLT purposes.

To make it SDLT free would need a DOV where all the beneficiaries give up their shares but they cannot get anything in return.

securityguy

Christ. How stupid and/or badly advised do you have to be to leave twelfth shares of anything? It's a move virtually guaranteed to start a fight. If I were an executor with that dumped on me I would renounce if I possibly could: let people who care fight it out amongst themselves. All that grief for the price of a holiday? Nah.