Can an executor buy an asset from the estate below market value?

callie72

I have received the final estate accounts from the solicitor showing the estate assets, liabilities and administration expenses, this is for my parents estate. It has taken the solicitor 4yrs to deal with this. The accounts show that my sister who is an executor and beneficiary has bought a timeshare from the estate for half the market value, is this allowed? Do all beneficiaries need to agree to this? 

Savvy_Sue

How was the market value ascertained? Was it put on the open market?

They don't always sell easily...

callie72

The timeshare is in the grounds of a prestigious hotel on the banks of Loch Lomond, they don’t have problems selling and there is only 1 other lodge for sale for the same week (smaller lodge) which is on the market at double the price. 

I thought maybe it would come under the “rule of self dealing”?

Linton

The asking price and selling price for something may be very different. Perhaps  that is a reason for the estate taking so long to settle.
If the executor were really to have used her position  to acquire an estate asset for under the market price that could be challenged but with a solicitor involved that should be unlikely.  

 If it caused your inheritance to be adversely affected then you have every right to ask questions. But be careful before making wild accusations as it is quite possible that she did you a favour by buying the timeshare because no-one else would.

Flugelhorn

Ask how the value was determined - they may have some evidence 

honestly they are often much more difficult to sell than the companies let on - quite unpopular these days

bobster2

Timeshare? The "market value" is not the value you see these things advertised out.

I would imagine these could be quite hard to shift. "Banks of Loch Lomond" sounds nice - but the market might not be huge. Plus it may come with maintenance fees so could be a burden for whoever takes it on.

She may have done you a favour

E.g. see

The Truth About The Loch Lomond Timeshare Trap
https://www.timeshare-solicitor.co.uk/the-truth-about-the-loch-lomond-timeshare-trap/

We can't give away our Loch Lomond timeshare - and now the fees are piling up
https://www.thisismoney.co.uk/money/experts/article-6323785/TONY-HETHERINGTON-away-Loch-Lomond-timeshare-fees-piling-up.html

Keep_pedalling

You should probably thank your sister for offloading this “asset”. Paying the ongoing fees is an indefinite obligation and regardless of location TS is an extremely difficult sale, a lot can’t be given away.

GDB2222

I’m truly astounded that the executor would buy an asset from the estate without first agreeing that with the other beneficiaries. 

At best, that is incredibly high handed and likely to cause acrimony. At worst, it could lead to litigation costing a small fortune. That applies whether or not the price paid was fair. 

Brie

I would have thought the difference would need to come from her portion of the estate.  If I was a beneficiary I would be pushing to have this included in the accounts.  

In that...sister has £50k and time share costs £100k and the estate is worth £1million to be split in two but that's taking time.  So sister pays the estate £50k to take on the time share and the other £50k comes out of her share of the cash in the estate when it is paid out.  

doodling

Hi,

I strongly recommend that the OP has a very polite discussion before making an issue of this - it is quite possible for the value of timeshares to be negative so the sister could have done the OP an enormous favour.

Don't look at what people are trying to sell timeshares for, you need to find out what they are actually being sold for.

Sometimes, when people die with a timeshare, the cost of charges and getting rid of it can eat up the whole of the rest of the estate.

Of course, this could be a highly sought after timeshare in a prime location and all of the above could be irrelevant.

sheramber

Brie said:

I would have thought the difference would need to come from her portion of the estate.  If I was a beneficiary I would be pushing to have this included in the accounts.  

In that...sister has £50k and time share costs £100k and the estate is worth £1million to be split in two but that's taking time.  So sister pays the estate £50k to take on the time share and the other £50k comes out of her share of the cash in the estate when it is paid out.  

What value for the timeshare was included in the estate value?