Selling an inherited house with "houseguests"

[silvor]

I am named the executor of my dads trust to be split between me and my brother. Before our inheritance, I would have hit my FIRE goal early 2021. He has never had money before. As a matter of fact, when my dad would gift us money, he would buy my brother stuff that is "needed" like fixing up his house or a down payment on a used car so he wouldn't waste the money.

My dad was sick for over a year, almost died several times in the mean time, and finally passed after being in the hospital 3 weeks.

Once he died, I setup appointments with realtors, auctioneers and his brokerage house to transfer assets.

Right before the realtor got to the house, I was told my brother may want to buy the house. I was surprised, because it's a county home and takes much more work than your typical suburban house. Since then, I have heard anything between "I'm 80% sure I'm buying the house" to " we can discuss this after the funeral" to "I want to buy his cars, tools and household items" to "well, some of it". Or maybe all of it.

The BIG problem is my brother's son and wife moved in "temporarily" at least 6 weeks ago. He was supposed to be out in under 30 days. They have not paid rent or any bills. When I asked them to give me an idea on when they will be leaving it's "a few weeks". Or "6-8 weeks" or "we're not sure." From what I understand, to legally get them out of the house, I have to formally evict them. Is that the case? I don't want to, but I can't trust my nephew or my brother with what they say.

Also, according to some of my brothers kids, he now needs 2-3 weeks to "think about" buying the house. From what the realtor said, and I know this to be true around here, to sell a country home needs to be done by the end of September. If not, you are likely to hold it through the winter, then I have all those issues to deal with. And the house is filled with clutter that they absolutely refuse to get rid of or store in the onsite, outbuilding.

This turned into a big shouting match the other day and I really don't expect our families to ever talk again.

Any help is appreciated.

 

[ERD50]

Think about declining the executor position (no one can force you). Turn it over to a trust department or law firm that does this.

Unless your brother is named second in line, that could be a problem.

Yes, it will cost you some fees. Getting this monkey off your back - priceless. I did this, because one of my siblings is crazy, and I did not want to be between him and any inheritance. The bank was very good in many ways, pretty poor in others, but I'd do it again in a heartbeat.

Good luck -ERD50

 

[Gill]

You say you're the "executor of the trust". Are you the executor of the will and where is the house held, in the estate or in the trust? You need to assert your authority as executor or trustee. They had no right to move in nor to continue to live there. Tell them to be out in 30 days or you'll have them arrested as trespassers.
Gill

 

[OldShooter]

Sad situation, but not uncommon when one family member is executor or is a trustee having some control over assets and payments to other family members.

Yes, you will have to evict the squatters. @ERD50 is probably correct in recommending that you turn the estate over to a good attorney. When I had rental property and (rarely) had to evict, I figured it took 45 days from the beginning of the month where rent went unpaid. An attorney can probably get it done faster since the squatters didn't have permission to occupy in the first place and there is urgency due to selling the property

The attorney will be your protection on many other matters including selling other assets, disbursing assets, and executor compensation. In the unlikely event your brother does want and is able to buy the property, the attorney can handle the negotiations, which will undoubtedly be difficult and prolonged.

To get the ball rolling I would sign the listing agreement with an exclusion for your brother. The attorney can step into your shoes as the seller when it is convenient.

 

[silvor]

Think about declining the executor position (no one can force you). Turn it over to a trust department or law firm that does this.

Unless your brother is named second in line, that could be a problem.

Yes, it will cost you some fees. Getting this monkey off your back - priceless. I did this, because one of my siblings is crazy, and I did not want to be between him and any inheritance. The bank was very good in many ways, pretty poor in others, but I'd do it again in a heartbeat.

Good luck -ERD50

I don't think I can hand it off. The language says:
If there is no serving trustee, then (me) shall serve as trustees. If (me) is unable or unavailable to serve as trustee, then (my brother) shall serve as trustee.

But if I can handoff, the bank or lawyer would handle an eviction, sale of the home, sale of the household items?

How much does something like that run?

FWIW, the house is worth about $330k net, and there's about $380k in cash and mutual funds.

 

[silvor]

You say you're the "executor of the trust". Are you the executor of the will and where is the house held, in the estate or in the trust? You need to assert your authority as executor or trustee. They had no right to move in nor to continue to live there. Tell them to be out in 30 days or you'll have them arrested as trespassers.
Gill

I am mixing up terms.

The house is in a trust and I am the trustee. He also has a will, which was setup along with the trust. Basically the will says everything belongs in the trust.

 

[RetiredHappy]

I don't think I can hand it off. The language says:
If there is no serving trustee, then (me) shall serve as trustees. If (me) is unable or unavailable to serve as trustee, then (my brother) shall serve as trustee.

But if I can handoff, the bank or lawyer would handle an eviction, sale of the home, sale of the household items?

How much does something like that run?

FWIW, the house is worth about $330k net, and there's about $380k in cash and mutual funds.

I am not a lawyer, but I do not believe you can hand off directly to a bank or lawyer, because when you are unable/unwilling to be the trustee, your brother will be next in line.

 

[eeyore]

How about putting the house in your brother's name and taking the cash for yourself ?
How much authority does an executer have, regarding how to divide the estate ?
Or at least, tell your brother that that is what you are going to do if he does not leave.

 

[RetiredHappy]

How about putting the house in your brother's name and taking the cash for yourself ?
How much authority does an executer have, regarding how to divide the estate ?
Or at least, tell your brother that that is what you are going to do if he does not leave.

I was thinking along the same line. Brother keeps home and OP keeps the money and writes a check for $25K to brother, unless those are in tax deferred accounts and there is no check to be written.

 

[silvor]

I was thinking along the same line. Brother keeps home and OP keeps the money and writes a check for $25K to brother, unless those are in tax deferred accounts and there is no check to be written.

Which by him buying the house would work out to that anyway. But man, that seems TOO easy.

 

[RetiredAndLovingIt]

Is there a mortgage on the house?

 

[RetiredHappy]

Which by him buying the house would work out to that anyway. But man, that seems TOO easy.

Have you proposed that to him?

 

[silvor]

Is there a mortgage on the house?

No. Free and clear for at least 20 years.

 

[silvor]

Have you proposed that to him?

Of course.

But even small decisions like clearing out one dresser drawer of socks took 1/2 an hour.

 

[RetMD21]

As trustee could you hire an attorney and pay him out of trust assets? Sounds like it would be well worth it.

 

[RetiredHappy]

As trustee could you hire an attorney and pay him out of trust assets? Sounds like it would be well worth it.

Sounds like it may work, without relinquishing trustee duties.

 

[RobbieB]

I would do it, only way to proceed w/o making your brother trustee and we all know how well that would work out.

 

[CardsFan]

I am named the executor of my dads trust to be split between me and my brother. Before our inheritance, I would have hit my FIRE goal early 2021. He has never had money before.

If I read this correctly, you have hit YOUR FIRE goal without the inheritance. So, you don't NEED the money (but it would be nice). You brother NEEDS the money (but will probably blow it soon enough, just reading between the lines here).

So, if allowed, I would hire an outside person to handle on your behalf (as recommended above). And I would remind brother that every obstacle he, or his kids, put in place will require more money to be spent and therefore reduce what he gets.

If you can't do that, I would put the house up for sale, reminding brother that if it sells low due to the "circumstances", he will lose money.

I have been in a similar circumstance, and it was not fun. I let brother live there for years. He finally got a no doc loan and bought me out. He then proceeded to lose the house, because he could not pay, and, of course, that was my fault. FWIW, my brother had some mental issues, and that made it worse.

 

[JP.mpls]

I'm also not a lawyer, but you might need one soon.

My thoughts.
Lay out the numbers for your brother. Tell him he is entitled to half of the estate.

Option A: If he wants the house, it is valued at $330k. He will get the house, and $25k.

Option B:. You both work together to sell the house, and he gets half in cash.

Give him a short timeline. Tell him if he or his kid continue to live there, you will assume he wants the house, and proceed to process the trust accordingly.

I think he is assuming he will get more out of the estate if they simply take over the house. Like a money grab.

Good luck. JP

 

[Bamaman]

One issue is what does the will say about who gets the home? Is the home supposed to be sold and the proceeds split?

Last time I had to evict someone, I found the state eviction laws slanted to the person in the house. I filled out a form at the County Court Clerk and paid $320 fees to have a summons served for a court hearing. They were a no show. The people were given 20 days to get out of the property and the Sheriff was given notice to vacate the premises in 2 weeks. I had to make an appointment with the sheriff and they sat at the house while my agents moved everything to the curb. An attorney is not required to process an eviction in many states.

You should first tell the nephew to get out now. If he doesn't leave immediately, start the eviction proceedings immediately. Feelings are secondary when people have so much nerve. There is presently a moratorium on evictions by landlords in some states, and I hope that has nothing to do with this situation--since no rent is being charged.

And don't feel bad about it. An executor's first responsibility is to The Estate. And time is of the essence when it comes to liquidating the estate.

 

[JP.mpls]

I missed a few of the latest comments.
Others are suggesting the same.

He needs to make a decision, but you will have to force his hand.

 

[OldShooter]

You need a good trusts & estates attorney. He will advise you on what your options are. One MAY be to go to court and ask that the trust language be overridden because your brother has acted in bad faith with respect to the house and cannot be expected to behave as a fiduciary going forward. Another MAY be that you can bring in a co-trustee to assist you. Certainly you can hire an attorney to assist you as a consultant. IANAL and SGOTI is probably not an attorney experienced with your state laws and familiar with the local judiciary either. Hire an expert.

 

[Sunset]

OP has not mentioned it, but some of the bank accounts or brokerage accounts might have a TOD or POD on them.
These are NOT part of the Will.
They go to whoever is named on the various accounts, and technically the actual beneficiaries of these accounts are responsible for claiming the $$$.
Not the executor.

I'm throwing this out, as from my experience folks really mix up what is governed by the Will and what is outside the Will.

 

[OldShooter]

... I'm throwing this out, as from my experience folks really mix up what is governed by the Will and what is outside the Will.

Yes and apparently an irrev trust here too. Hence the need for a good lawyer.

 

[ERD50]

I don't think I can hand it off. The language says:
If there is no serving trustee, then (me) shall serve as trustees. If (me) is unable or unavailable to serve as trustee, then (my brother) shall serve as trustee.

But if I can handoff, the bank or lawyer would handle an eviction, sale of the home, sale of the household items?

How much does something like that run?

FWIW, the house is worth about $330k net, and there's about $380k in cash and mutual funds.

OK, then it seems you can't just hand over executor/successor-trustee responsibilities.

But as others have said, I don't think that means you can't hire an attorney or bank rep to handle this stuff for you (you are still executor/trustee), and the cost comes out of the estate.

But try to get the brother to agree to the split of him getting the house plus $25K, you get the other half in $$$. That sounds simple. Make the point hat anything else will involve more costs and fewer $$$ to him.

But as I have learned, if he is the irrational type, well, rational approaches may not work.

-ERD50