I am joint executor and joint beneficiary of estate, how does this affect first-time buyer status?

Jennex

I'm one of two executors and two beneficiaries of an estate that includes a piece of land. The land contains uninhabitable property, if that makes a difference (it's little more than a ruined building site). The Will states that assets are to be equally divided between us. The land is still registered to the deceased owner. My question is whether, as a first-time buyer, I should make an effort to NOT have my name on the land registry deed. The other beneficiary wants to buy my share of the land and already owns property. Is there some way we can do the sale as executors, and then I get the money and agree the land registry deed should be only in their name?

RAS

Is there cash or other assets in the estate? Are you happy if the other beneficiary make a mint selling a building plot for lots of money?

Keep_pedalling

If he buys your share from the estate you will not loose your FTB status. The thing to avoid is transfering the land into your name, this never needs to be done where a beneficiary wants to sell rather have the asset transferred to them. 

Jennex

RAS said:

Is there cash or other assets in the estate? Are you happy if the other beneficiary make a mint selling a building plot for lots of money?

Not much else in the estate, the land is the main thing.

I wouldn't be happy, but I'm not sure I can do anything about it. The other beneficiary claims they intend to build a house and live there. I'm already selling at a loss to keep the peace, really - we have a private buyer offering a lot of money, well above market value, but the other beneficiary says they don't want to sell to them.

Grumpy_chap

Jennex said:

I wouldn't be happy, but I'm not sure I can do anything about it. The other beneficiary claims they intend to build a house and live there. I'm already selling at a loss to keep the peace, really - we have a private buyer offering a lot of money, well above market value, but the other beneficiary says they don't want to sell to them.

As (joint) Executor you (each) have a duty to realise the value of the Estate for the benefit of all Beneficiaries.  That is a legal duty, not an optional duty.

If the land has a private buyer offering £XXX, then each Beneficiary should gain to the tune of half £XXX.  

There may be some small reduction for selling to one of the Beneficiaries, but that would be related to matters around not incurring Estate Agent fees and such like.  Not substantial reduction to the value of the land.

The other Executor seems to be conflating their role as Executor (to maximise the value) with their desire as purchaser of half the plot of land.

doodling

Hi,

If property is sold from a deceased's estate then it is usually sold direct from the executors (with it being registered in the name of the deceased at the Land Registry) to the new owner.  In that case neither the executors, nor any beneficiaries which are selling their share ever gain a form of ownership which affects first time buyer status.

In your case, it will be sold directly by the executors to the other beneficiary and the Land Registry will never record you as owning it.

(If you are asking yourself the question "if the executors are selling it then surely that means they own it, doesn't that mean that the executors are not first time buyers anymore?" then well spotted yes you're right they have a form of ownership, but no, being an executor doesn't affect first time buyer status).

In theory the property could be transferred info the names of the executors before it is sold and transferred into the name of (in this case) the other beneficiary; that isn't legally wrong but is unusual, unnecessary and does muddy the water somewhat - don't agree to that.

It sounds like you are taking a pragmatic view as to value.  That is a very sensible approach if the other beneficiary is also an executor.

Jennex

Grumpy_chap said:

Jennex said:

I wouldn't be happy, but I'm not sure I can do anything about it. The other beneficiary claims they intend to build a house and live there. I'm already selling at a loss to keep the peace, really - we have a private buyer offering a lot of money, well above market value, but the other beneficiary says they don't want to sell to them.

As (joint) Executor you (each) have a duty to realise the value of the Estate for the benefit of all Beneficiaries.  That is a legal duty, not an optional duty.

If the land has a private buyer offering £XXX, then each Beneficiary should gain to the tune of half £XXX.  

There may be some small reduction for selling to one of the Beneficiaries, but that would be related to matters around not incurring Estate Agent fees and such like.  Not substantial reduction to the value of the land.

The other Executor seems to be conflating their role as Executor (to maximise the value) with their desire as purchaser of half the plot of land.

I don't disagree, but I don't know if I have the stomach for a fight. It will definitely be the end of any amicable relationship. Other beneficiary has made it clear that the next step will be getting solicitors involved and arguing bitterly over a just price. We have a RICS survey for the remains of the building work, I'm not sure about how to get land valued otherwise, beyond the private seller who was approached by the previous owner. Gonna be asking about that on another forum here... 

Keep_pedalling

Jennex said:

RAS said:

Is there cash or other assets in the estate? Are you happy if the other beneficiary make a mint selling a building plot for lots of money?

Not much else in the estate, the land is the main thing.

I wouldn't be happy, but I'm not sure I can do anything about it. The other beneficiary claims they intend to build a house and live there. I'm already selling at a loss to keep the peace, really - we have a private buyer offering a lot of money, well above market value, but the other beneficiary says they don't want to sell to them.

Please don’t give into his bullying he can’t do anything unless you agree it. You have an offer on the table tell him you are happy to sell your share to at 50% of the offer you have on the table or no deal. 

mattojgb

Executors can only properly acquire property from an estate they are administering if they jump through a number of hoops. It's difficult to do properly without the involvement of solicitors, and if not done properly can be relatively easily anulled. Look up the rules on self-dealing. It's kind of designed to prevent exactly this type of thing from happening.

Jennex

mattojgb said:

Executors can only properly acquire property from an estate they are administering if they jump through a number of hoops. It's difficult to do properly without the involvement of solicitors, and if not done properly can be relatively easily anulled. Look up the rules on self-dealing. It's kind of designed to prevent exactly this type of thing from happening.

Thanks for making me aware of this term, self-dealing, that clears up a few things. I've still got a lot to learn...

Grumpy_chap

Jennex said:

I don't know if I have the stomach for a fight.
Other beneficiary has made it clear that the next step will be getting solicitors involved and arguing bitterly over a just price. 

How much stomach you need to fight this really depends on the absolute amounts of money involved. 
If the property is worth £100k and the other Executor is offering you £45k for the half share, then probably not worth fighting much for the £5k.
If the property is worth £1m and the other Executor is offering £300k for the half share, probably worth more of a push-back.

It may well be that the other Executor getting a Solicitor involved might be the path to cutting through the greed from the other Executor.  Once the Solicitor knows there is a RICS valuation and an offer on the table at £XXX, the advice might well be that has to be the value.  Employing many hours of Solicitor may simply burn through the value of the Estate so you both end up with nothing.  I would expect that, if the proposal is for the Estate to pay the Solicitor fees, then the Solicitor should consider you both as their Client.  If the other Executor is paying the Solicitor fees themselves (as I feel they probably should), then the Solicitor won't take any instruction from you but will make the whole process for the other Executor far more expensive.