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Can Personal Representative Accept Offer on House $15,000 Under Market Value?

Attorney Thomas B. Burton is joined by Attorney Matthew Underwood, of Underwood Legal, LLC in Madison, Wisconsin. Together, Attorney Burton and Underwood discuss and answer a reader's question about whether a Personal Representative for an Estate can accept an offer for a home owned by the Estate that is $15,000 less than the fair market value of the home.

Transcript of Video: Can Personal Representative Accept Offer on House $15,000 Under Fair Market Value?

Okay welcome back we're here on the

beach and I'm joined by my friend

attorney Matthew Underwood Matt thanks

for joining us today

thanks for having me Tom, and I saved

another difficult question for you Matt

owns and operates Underwood Legal, LLC a

boutique estate planning and elder law

firm in Madison Wisconsin and I have a

good probate question for you today Matt

that came in from a reader and the

reader writes the following can a

personal representative accept a home

offer of a will that is part of three

kids he is one of the kids the offer is

$15,000 under market value so what do

you think about that Matt? so there's a

few things going on in this question but

you know I think the first part is that

this is a fairly common situation that

we see we often see cases where parents

where mom and dad set up an estate plan

where if mom and dad both passed away

then one of the kids would take over as

the personal representative and

administer the estate so I think it's

fairly common to see that where you know

where we might have three kids but one

of them was named as that personal

representative so really that the

personal representative that is the

person who has the legal authority to

administer the estate and the personal

representative is actually appointed

by the court so they would get letters

from the court giving them authority to

handle the estate so in in the personal

representative’s authority one of the

things they can do is dispose of

property so they can sell property you

know real estate they can sell stocks

and convert that to cash so that you

know the short answer this question is

that the personal representative can

accept offers on that house they do have

that authority to do so as long as they

are appointed by the court but the you

know slight twist of this question is

can they accept

an offer that is $15,000 under the market

value yeah so market value you know

in a lot of ways valuation is more of an

art than a science so there's you could

have three appraisers take a look at a

house and you'll get three different

valuations from each person so in my

mind that when people are coming up with

the market value it's always an estimate

it's using our best judgment our best

guess but only by listing that property

on the market and starting to get some

actual offers and people interested

that's when we're really going to know

you know what are people willing to pay

for that property so I think you know

maybe that market value it's out of date

or it just doesn't reflect the actual

market conditions so it's you know I

think it's okay for the personal

representative to potentially accept an

offer that wasn't what they expected or

not fair market value but the one

cautionary tale to that is I would

highly recommend that that personal

representative talked to his siblings

and make sure that everyone's on the

same page and that siblings are okay

with with him accepting that lower offer

that'll avoid any sort of potential

disagreements down the road so I would

really encourage that open communication

with other heirs of the estate so in

I think in my mind the best way for that

personal representative to deal with

this situation is to speak with a

qualified estate planning or probate

attorney and you know that attorney is

really there to provide guidance so if

the personal representative wants to

handle you know a lot of the work of the

estate and be the person that's really

dealing with a lot of things that's fine

and then if there's questions that come

up that personal representative is not

really sure what to do that's a perfect

place for the attorney to come in and

then offer guidance on that so I do

really encourage that you know this

personal rep to get some other help on

this as well so Matt I think that was a

great answer but what I heard you say

here is that personal representative if

that's the person named in the will

they're really in charge

managing and selling that real-estate

correct yep that's correct so just

being named in a will

that doesn't give that person authority

to act we really need to give that will

to the court and then get a letter from

the judge that letter of authorities

saying that yep this personal

representative was accepted and and

personal representative can now you know

take action on behalf of the estate and

that's called the domiciliary letters in

Wisconsin so those are the letters the

personal rep is going to get from the

court so really your other point is a

good one try to talk with your siblings

and get consensus on this house sale

right but if there's a disagreement

ultimately the court correct me if I'm

wrong they're going to look to that

personal representative as the

decision-maker correct right so if there

is a dispute and you know maybe siblings

can't agree on what to do that's what

the court is there for the court it is

kind of the last resort on where those

disputes can be resolved so you know I

think in that case you know the judge is

an impartial person so they're

going to look at all the facts to the

situation maybe that personal

representative is trying to sell the

house to their best friend and trying to

give their best friend a really good

deal on this house so you know a judge

might say hey you know that's not

what you should be doing as a personal

representative so I think you know it

really depends on the facts and

circumstances and you know what's

happening overall but you're absolutely

right there is a way to resolve

those disputes it's just that you know

does the family want to get together and

resolve it on their own or if they can't

well then we need to get a third party

involved to help with that right well

great question to the reader thanks for

writing and thank you Matt for that

comprehensive answer and thanks for

having me Tom thank you everyone for

watching that's all for today we'll see

you next time!

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Transcript and captions provided for ease of access for the hearing impaired.

For questions about this topic, or to suggest a topic for a future blog post, please contact my office.

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