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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