Do beneficiaries get a chance to agree on disposal of inherited assets

Donald Trump

Suppose someone dies intestate and their estate is to be divided between a good few relatives.

What rights, if any, do the beneficiaries have to agree to, or disagree with, disposal of assets?

Is there an obligation for the executor/administrator to inform them of any agreed disposals prior to the contracts being signed?

Dolbhad

In a nutshell none - it’s up to the executor/administrator. But they have a duty towards the beneficiaries. So executor/administrator can decide the sale price of house and who to sell to but would need to sell it at market value.

Donald Trump

Dolbhad wrote: »

In a nutshell none - it’s up to the executor/administrator. But they have a duty towards the beneficiaries. So executor/administrator can decide the sale price of house and who to sell to but would need to sell it at market value.

So nothing to be done if the executor/administrator sells it to a friend or family member, perhaps after getting it "valued" by a registered valuation person, maybe even before notifying beneficiaries that they are beneficiaries!

Dolbhad

Donald Trump wrote: »

So nothing to be done if the executor/administrator sells it to a friend or family member, perhaps after getting it "valued" by a registered valuation person, maybe even before notifying beneficiaries that they are beneficiaries!

The beneficiaries would know they are beneficiaries early on - usually by the solicitors acting for the executor/administrator. If there is no will you can have a few beneficiaries Who could be administrator so usually a decision is agreed between all on who applies for administrator. Probate requires all assets to be valued anyway.

GerardKeating

Donald Trump wrote: »

So nothing to be done if the executor/administrator sells it to a friend or family member, perhaps after getting it "valued" by a registered valuation person, maybe even before notifying beneficiaries that they are beneficiaries!

As mentioned in the second post in this thread, the executor/administrator has a duty to the beneficiaries to get the market price for the asset, selling it cheap to a friend would/could be a criminal offence.

Donald Trump

GerardKeating wrote: »

As mentioned in the second post in this thread, the executor/administrator has a duty to the beneficiaries to get the market price for the asset, selling it cheap to a friend would/could be a criminal offence.

I never said selling it "cheap". I said selling it after getting it "valued".

However, as I am sure you are aware, valuations from registered valuers/auctioneers can differ. It is common for a scenario where a local authority tries to CPO a property. Current owner hires valuer X who says it it worth 200. Local authority hires valuer Y who says it is worth 100. Both valuers give their professional opinions at any subsequent hearings etc.

coylemj

Donald Trump wrote: »

I never said selling it "cheap". I said selling it after getting it "valued".

Putting quotes around the word valued was a pretty open invitation to us to assume that there was something underhand about the process. That is to say, that it wasn't a bona fide valuation but one which was deliberately low so as to favour the buyer. Who was in cahoots with the executor.

Donald Trump wrote: »

However, as I am sure you are aware, valuations from registered valuers/auctioneers can differ. It is common for a scenario where a local authority tries to CPO a property. Current owner hires valuer X who says it it worth 200. Local authority hires valuer Y who says it is worth 100. Both valuers give their professional opinions at any subsequent hearings etc.

That is not a valid parallel. In the case of a contested CPO, each valuer will have a propensity to go in the direction which favours his client - the council valuer to go low, the valuer hired by the property owner to go high. In the case of a valuation for probate, the valuer has no vested interest in the process.

How would you have gone about it if you were the executor? If you throw it open to the family, they will all give lowball valuations for the items they fancy.

Donald Trump

coylemj wrote: »

Putting quotes around the word valued was a pretty open invitation to us to assume that there was something underhand about the process. That is to say, that it wasn't a bona fide valuation but one which was deliberately low so as to favour the buyer. Who was in cahoots with the executor.



That is not a valid parallel. In the case of a contested CPO, each valuer will have a propensity to go in the direction which favours his client - the council valuer to go low, the valuer hired by the property owner to go high. In the case of a valuation for probate, the valuer has no vested interest in the process.

How would you have gone about it if you were the executor? If you throw it open to the family, they will all give lowball valuations for the items they fancy.

So my question then is how to determine/prove that an accepted deal is fair or at market value? In the same way that a valuer will tend towards the favour of the person hiring them for a CPO, it is also possible that they might tend towards the person hiring them for a valuation here. No? Is that impossible? Or even if not, would it not be possible for the executor to get 10 valuations and then simply choose the most beneficial one for their own purposes?

On the other side of the coin, if you were the executor, how would you protect yourself against any possible allegations?

For your latter point, if it was, as you described , thrown open (and not that I'm advocating that necessarily) then suppose cousin Jimmy lowballs 100k for a house worth 200k. Then maybe cousin Mary says "Well I'll go for 110k" and so on. Or Mary could say "I want it put on the market for auction".


My scenario was where the disposal of property was already agreed upon before all of the beneficiaries were notified that they were beneficiaries.

coylemj

Donald Trump wrote: »

So my question then is how to determine/prove that an accepted deal is fair or at market value?

You can't. Because as you say, different valuers will give different valuations. You can hire two, three, four valuers and average out the valuations. but where do you stop?

Donald Trump wrote: »

On the other side of the coin, if you were the executor, how would you protect yourself against any possible allegations?

Sell everything at a public auction.

Donald Trump

coylemj wrote: »

You can't. Because as you say, different valuers will give different valuations. You can hire two, three, four valuers and average out the valuations. but where do you stop?



Sell everything at a public auction.

So then you would have to agree that my scenario is not implausible? That the executor could sell it to a connected person after getting it "valued" and afterwards inform the beneficiaries that they are beneficiaries?

I'm not talking about selling a house for a Euro. I'm talking about maybe 5-10% under what you might have expected the market value to be. Suppose there are 20 equal beneficiary shares and the property was sold for 200 rather than 220 before they were notified. Then each person is going to get 10 instead of 11 and it might not be worth the hassle to asking questions.

randomrb

In the situation that you have described your issue would be with the the auctioneer. They are providing a formal valuation that will be used for probate and revenue for stamping.

The executor has a duty the beneficiaries but they can argue that they relied on a valuation from a registered source and that selling it privately would actually save money in auctioneers fees.

To answer your more general question beneficiaries have no right to decide how the estate is divided or administered that is solely the Executor/Administrators job.

brian_t

randomrb wrote: »

To answer your more general question beneficiaries have no right to decide how the estate is divided or administered that is solely the Executor/Administrators job.

How the estate is devided up is decided by the rules of Intestacy.

Who has the final say over who the Administrator will be if the next of kin cannot agree among themselves.

coylemj

Donald Trump wrote: »

I'm not talking about selling a house for a Euro. I'm talking about maybe 5-10% under what you might have expected the market value to be. Suppose there are 20 equal beneficiary shares and the property was sold for 200 rather than 220 before they were notified. Then each person is going to get 10 instead of 11 and it might not be worth the hassle to asking questions.

Two things ...........

1. You still haven't answered my question...... how would you have administered the assets?

2. What type of assets are involved?

You have to realise that when you go to sell your car or (as in your case) you are getting a share from the sale of one or more assets, there is almost always a gap between what you consider to be the 'market value' and reality.

Donald Trump

What is the relevance of asking how I would do it? I was merely trying to find out whether there was a standard procedure or not. From the replies it doesn't appear that there is!

And would it matter what type of assets are involved? Surely the same laws and principles hold in both cases. It's a hypothetical scenario.

Let me make up some details for you:
Two brothers Paddy and Mick are the only children in a family.
Paddy inherits the small farm and house. Paddy marries Mary. They have one child Padraig. Padraig inherits the property when his parents die.
Mick moves away and gets a job. Mick also gets married and has one child called Micheal

Mary had 5 brothers and sisters who each had 4 children. So Padraig had 21 cousins - 20 on his mother's side and 1 on his father's side. He never gets married or has children.

Padraig passes away. 6 months later, Micheal receives a letter from a solicitor that Padraig left his estate to be divided equally between his 21 cousins. This is the first notification that he is a beneficiary. The solicitor notes that the property has been valued and a sale has been agreed on it.

Subsequently, Micheal learns that one of Padraig's other cousins, Jack, acted as executor/administrator and sold the property to his (Jack's) son. Jack's son is a builder and it is the understanding that he bought the property to renovate the old cottage and flip it for a profit.

Micheal doesn't have all the information to value the property exactly himself, but it is of sentimental value to him due to it being where his grandparents lived and worked and where his father grew up. He would have been happy to pay more for it than Jack's son did. He also thinks it appeared to be very conservatively valued but Jack did pay for a registered valuer to give him an official valuation. It was never advertised publicly, nor was it flagged to Micheal as being for sale.

From what people say above, under this scenario, it's just tough shit to Micheal. The other beneficiaries are unlikely to complain as it is their nephew who benefits from the sale. Suppose Micheal had been willing to pay 21k more for the property, then they'd just have received another 1k each (minus whatever tax might be applicable). So they wouldn't really care.