Purchasing vehicles in probate with multiple beneficiaries.
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Purchasing vehicles in probate with multiple beneficiaries.
I have three sisters who are beneficiaries to an estate. one sister would like to
purchase a vehicle, that is still part of the estate at fair market value. Since
all 3 sisters own a third of said vehicle does that mean that the sister who
wishes to purchase the vehicle only pays 2/3 of the fair market value?
Fair market value for vehicle 10,500.
Each sister owns 3,500
purchaser, one of the sisters pays 7,000 for the vehicle.
Asked on March 20, 2017 under Estate Planning, Washington
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
Actually, since the estate has not been settled, the way to do this is the sister buying it pays the estate the *full* fair market value--possibly at a slight discount, to reflect that there are no marketing, advertising, etc. costs associated with the sale. The reason is, whatever the car sells for, that amount is then split three ways among the three beneficiaries, so each gets 1/3 of the proceeds: the paying sister, therefore, gets 1/3 back once the estate settles, and each other sister get 1/3, too. If the paying sister only pays 2/3 and that is then distributed three ways--which is what would have to happen, if the three sisters are each 1/3 beneficiaries--then the non-paying sisters only each get 1/3 x 2/3 of the value, or 2/9; and the paying sister would also get 2/9 after having gotten a car worth $10,500 for only $7,000, so she would come out well ahead of her siblings.
Assuming the above is satisfatory to all (since buying the car is voluntary), what you need is for the estate's personal representative--e.g. the executor (if there is a will) or court-appointed administrator or representative (if there is no will)--to approve the sale and make it happen: the personal representative has the authority to sell estate assets.
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