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  1. #1
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    Dec 2012
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    Default House Transfer During Probate

    My question involves estate proceedings in the state of: NJ
    I have posted a few times since November as administrator of my brothers estate. Long story short, my older brother & I were the only family beneficiaries (a girl friend of decedent receives an IRA). My older brother was going to assume my 1/2 of our brother's house in lieu of cash out of the estate account. However, before the bank sent the lien release for a HELOC on the home, my older bro passed away in mid June. Loosing 2 brothers in 7 months was beyond overwhelming & I needed time to deal with what has transpired in life before I could fully re focus on tasks at hand.
    My brother who passed in June has a will & his daughter will receive her dad's share of the 1st brothers estate. Only to her, did I extend the offer to take over the house her dad was going to & she's rather certain of going thru with it. My attorney keeps using "sale of the house" while I believe it's a distribution of assets & can transfer the title to her name, can anyone clarify this along with if she would face tax implications if considered a buyer.
    The offer is a bit below market value & honestly at this point I want to be done with it, the last major dealing with the estate is after 3 months NJ Taxation pulled both the Estate & IT-R returns for audit.
    As mentioned, i'm hoping the house & cash can be treated as asset distributions. All input is greatly appreciated.

  2. #2
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    Default Re: House Transfer During Probate

    The person best positioned to address the two probate estates and the transfer of property following the death of the designated heir during the probate process is your lawyer.

    It is possible that your lawyer had intended to handle the issue with mutual disclaimers -- you would disclaim inheritance of the home and your brother would disclaim inheritance of the money -- and that your lawyer is either not certain whether your brother's estate can disclaim the inheritance, or he has found authority that indicates that it cannot. But I'm guessing -- the only way to find out what your lawyer is thinking is to ask him to explain his thought process.

  3. #3
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    Nov 2013
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    Default Re: House Transfer During Probate

    Quote Quoting krn001
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    My question involves estate proceedings in the state of: NJ
    I have posted a few times since November as administrator of my brothers estate. Long story short, my older brother & I were the only family beneficiaries (a girl friend of decedent receives an IRA). My older brother was going to assume my 1/2 of our brother's house in lieu of cash out of the estate account. However, before the bank sent the lien release for a HELOC on the home, my older bro passed away in mid June. Loosing 2 brothers in 7 months was beyond overwhelming & I needed time to deal with what has transpired in life before I could fully re focus on tasks at hand.
    My brother who passed in June has a will & his daughter will receive her dad's share of the 1st brothers estate. Only to her, did I extend the offer to take over the house her dad was going to & she's rather certain of going thru with it. My attorney keeps using "sale of the house" while I believe it's a distribution of assets & can transfer the title to her name, can anyone clarify this along with if she would face tax implications if considered a buyer.
    The offer is a bit below market value & honestly at this point I want to be done with it, the last major dealing with the estate is after 3 months NJ Taxation pulled both the Estate & IT-R returns for audit.
    As mentioned, i'm hoping the house & cash can be treated as asset distributions. All input is greatly appreciated.
    Did your first brother's will specifically state that you and your brother were to each get 50% of the house or did it say you were each to get 50% of the estate? Either way, the effect is the same in the end and probate in NJ is pretty simple if there are no challenges to the distribution.

    The entire estate (house and other assets) has a value and you and your brother each get half. That half can be cash, assets, or the house. I don't see why you can't sign the lien release as the executor of the estate (your first brother)and pay off the loan. You keep the remaining cash. The house would then have been given to your brother as his half of the inheritance with no tax consequences and you got equal value in cash. That would settle your first brother's estate. As it would stand now, the house is in his estate free and clear. If he were still alive, you would deed the house to him but now that he is dead you deed the house to his estate.

    But now the second brother passed away and his daughter inherits the house from his estate again with no tax consequences. His daughter is not a buyer in this case she is a beneficiary. There is no sale. The house is in her dad's estate free and clear.

    Your making it overly complicated by making the second brother's daughter an offer when the house is still in your first brother's estate.

  4. #4
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    Dec 2012
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    Default Re: House Transfer During Probate

    Quote Quoting budwad
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    Your making it overly complicated by making the second brother's daughter an offer when the house is still in your first brother's estate.
    What's over complicated? I extended the same buyout offer to my niece prior to having it listed on the market. My attorney emailed & again, uses "sale of the house" while her attorney says she needs to pay the 50% cash value to the estate then settle when the estate is complete. Sounds like the attorneys are being over complicated, i'm trying to distribute assets, house or cash.

  5. #5
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    Nov 2013
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    Default Re: House Transfer During Probate

    Quote Quoting krn001
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    What's over complicated? I extended the same buyout offer to my niece prior to having it listed on the market. My attorney emailed & again, uses "sale of the house" while her attorney says she needs to pay the 50% cash value to the estate then settle when the estate is complete. Sounds like the attorneys are being over complicated, i'm trying to distribute assets, house or cash.
    This is what you said in your original post:
    My older brother was going to assume my 1/2 of our brother's house in lieu of cash out of the estate account.
    Where is there a 'buy-out" or a sale? Your brother was to get the house and you got the cash. Is that correct or was he to pay, from outside of the estate, from his own funds to buy your half of the house?

    Your older brother passed before you distributed the house to him so the house is still in the first brother's estate. Is that correct?

    Your older brother left his estate to his daughter, your niece, and if the house had been transferred to him before he died, the house would now be in his estate. Is that correct? Then she would just inherit the house.

    So if I understand what you have been saying, there are two estates still open and in probate. The house has not yet been transferred out of your first brother's estate. And now your attorney is saying that you are going to sell half of the house to your niece from your first brother's estate? Is that correct? And her attorney is saying that she has to pay 50% of the value of the house to who's estate?

    Follow the logic. Right now, who owns the house?

    Overly complicated seems like an understatement right now. I am either missing something or you have not explained what the real circumstances are.

  6. #6
    Join Date
    Apr 2009
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    757

    Default Re: House Transfer During Probate

    ...& can transfer the title to her name...
    Why do you think that you can distribute the house directly to her? It is your brother's estate that now has the right to inherit. Who is administering his estate?

    It does not sound like your communication with your attorney is the best. Maybe it is time to have a sit down and get on the same page.

  7. #7
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    Nov 2013
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    Default Re: House Transfer During Probate

    Thanks for jumping in Harry. I believe that OP is the executor of both estates.

    If we have the true facts, and they go through jumping over the first brother's estate, there is going to be one muddy title to this house. The only one, at this point, that can inherit the house is the second brother's estate.

  8. #8
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    Apr 2009
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    757

    Default Re: House Transfer During Probate

    By the way....

    krn001 - My condolences. It's tough enough dealing with the death of one close relative...


    I believe that OP is the executor of both estates.
    May be. But, when the krn001 mentioned "her [second brother's daughter] attorney," I assumed otherwise.

    Maybe the problem with the attorneys is krn001's use of the term "buyout." As in:

    I extended the same buyout offer to my niece prior to having it listed on the market.
    A distribution in kind of one or more assets should not be a problem and should not need to be treated as a "sale."

  9. #9
    Join Date
    Dec 2012
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    121

    Default Re: House Transfer During Probate

    I have explained what the real circumstances are, apparently I should present them in a more concise manner. I am only administrating 1 estate (1st brother), who had no will. My 2nd brother who just passed had wanted to assume my 50% of the house. He explained his daughter would eventually take this house over eventually. My bro & I agreed at 214k as the value & in place of receiving 107k cash, he gets my share of the house & I gets my share of the cash.
    Due to the bank taking 5 months to release the lien we were forced to wait on filing/signing any legal documents to complete the division of assets equally. 6 weeks after he had it painted, sanded floors & had it in nice move in condition, he went into hospital in early June, while there I get the Lien Release but his condition worsened & we couldn't finish up the transfer, 2 weeks later he passed away.
    Since my niece who is the beneficiary of bro #2, was still wanting the house, I kept the same offer to her which BTW was about 15-20k below FMV.
    My attorney repeatedly use the term "sale of the house"; it isn't a sale as i'm distributing assets in an agreed & equal manner. That was what my initial inquiry was asking, sale or distribution, how is it treated
    is what I was asking. My niece's attorney said she has to pay the 107k to the estate, then upon settling the estate she gets paid back from the estate. I was told this yesterday so it isn't in the original post.
    Essentially I was trying to find out if it's a sale or transfer or other. Often in posts, people leave out pertinent info & maybe mine contained too much or not worded properly.
    If I add anything i'll make sure no one

  10. #10
    Join Date
    Apr 2009
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    757

    Default Re: House Transfer During Probate

    My niece's attorney said she has to pay the 107k to the estate, then upon settling the estate she gets paid back from the estate. I was told this yesterday so it isn't in the original post.
    I guess that your response will have to be: "What the hell are you talking about?"

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