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  1. #1
    Join Date
    Sep 2020
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    3

    Default Can I Do Something About This

    My question involves estate proceedings in the state of: VA

    My mother passed away intestate with a small estate. Divorced, raised 6 children by herself and leaving behind the house (Worth $300k) with a mortgage loan of (45k) and possibly unpaid taxes (that could be about 10k). All she ever wanted was everything to be split 6 ways, evenly and fairly amongst her children. I am the Administrator of the Estate (qualified from the court) and also one of her 6 children.

    Hereís the issue. My mother also had an IRA (85k) with enough money to cover the mortgage debt, tax debt, and other small debts, but my sister is listed as the beneficiary and so this IRA doesnít have to go through Probate.

    Hereís my concern. My sister has already decided to take out $36k from the IRA to give each of the kids $5k and give $3k to the Estate. I feel as though I have no authority over this money that needs to go to priority expenses. Iím told that the IRA and the Estate are totally separate. And if thatís the case, then I would have to sell the house which would lead to petitioning the court because half the kids want to keep it.

    I canít get through to my brothers and sisters that thereís a legal process which I have to follow. That if I donít, Iím held responsible. Iím told I need to relax and stop making things so difficult and complicating.

    Does this happen?

  2. #2
    Join Date
    Jul 2018
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    2,745

    Default Re: Can I Do Something About This

    Quote Quoting WutzRite
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    Here’s the issue. My mother also had an IRA (85k) with enough money to cover the mortgage debt, tax debt, and other small debts, but my sister is listed as the beneficiary and so this IRA doesn’t have to go through Probate.
    Why do you consider this to be an issue?


    Quote Quoting WutzRite
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    Here’s my concern. My sister has already decided to take out $36k from the IRA to give each of the kids $5k and give $3k to the Estate.
    Why do you find this concerning? This is a very nice thing of her to do.


    Quote Quoting WutzRite
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    I feel as though I have no authority over this money that needs to go to priority expenses.
    It's more than a feeling. As you noted, the money in the IRA that designates a beneficiary is not a probate asset, so you do not have any control over it, and your opinion that the money "needs to go to priority expenses" is not of any legal relevance.


    Quote Quoting WutzRite
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    I’m told that the IRA and the Estate are totally separate. And if that’s the case, then I would have to sell the house which would lead to petitioning the court because half the kids want to keep it.
    Well...your siblings' desire to keep the house is largely irrelevant. You're the administrator. If they wanted a say, they should have sought appointment as joint administrators. Unless the court's appointment gave you limited authority, you likely will not need to petition for the sale and probably already have that authority under law. What does the court's order appointing you as administrator say about your powers?


    Quote Quoting WutzRite
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    Does this happen?
    I'm not sure what you mean by this question (nor do I really understand the prior statement about someone telling you to relax and not make things difficult).

    The bottom line is that the money in the IRA is your sister's money to do with as she pleases. As for the rest of the estate, your job as administrator is to: (1) identify and take control of all probate assets; (2) identify all estate debt; (3) pay debt to the extent the estate has liquid assets and sell non-liquid assets to the extent necessary to pay debt; and (4) distribute whatever is left after all debt has been paid. The only reason not to sell the house would be if all six of you wanted to own it jointly (which, IMO, would be a HORRIBLE idea). If some of your siblings want the house, they can buy it from the estate for fair market value.

  3. #3
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Can I Do Something About This

    Quote Quoting WutzRite
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    My question involves estate proceedings in the state of: VA

    My mother passed away intestate with a small estate. Divorced, raised 6 children by herself and leaving behind the house (Worth $300k) with a mortgage loan of (45k) and possibly unpaid taxes (that could be about 10k). All she ever wanted was everything to be split 6 ways, evenly and fairly amongst her children. I am the Administrator of the Estate (qualified from the court) and also one of her 6 children.

    Here’s the issue. My mother also had an IRA (85k) with enough money to cover the mortgage debt, tax debt, and other small debts, but my sister is listed as the beneficiary and so this IRA doesn’t have to go through Probate.

    Here’s my concern. My sister has already decided to take out $36k from the IRA to give each of the kids $5k and give $3k to the Estate. I feel as though I have no authority over this money that needs to go to priority expenses. I’m told that the IRA and the Estate are totally separate. And if that’s the case, then I would have to sell the house which would lead to petitioning the court because half the kids want to keep it.

    I can’t get through to my brothers and sisters that there’s a legal process which I have to follow. That if I don’t, I’m held responsible. I’m told I need to relax and stop making things so difficult and complicating.

    Does this happen?
    The IRA money belongs solely to your sister. The fact that she is sharing it makes her a nice person, but she has no legal requirement to share it, its all hers.

    The house must be sold if there is debt that cannot be paid with liquid assets.

    I agree with the other poster that if some of your siblings want to keep the house, they should buy it out at fair market value (deducting what their shares would be as down payments.

  4. #4
    Join Date
    Jul 2018
    Posts
    157

    Default Re: Can I Do Something About This

    Quote Quoting WutzRite
    View Post
    My question involves estate proceedings in the state of: VA

    My mother passed away intestate with a small estate. Divorced, raised 6 children by herself and leaving behind the house (Worth $300k) with a mortgage loan of (45k) and possibly unpaid taxes (that could be about 10k). All she ever wanted was everything to be split 6 ways, evenly and fairly amongst her children. I am the Administrator of the Estate (qualified from the court) and also one of her 6 children.

    Here’s the issue. My mother also had an IRA (85k) with enough money to cover the mortgage debt, tax debt, and other small debts, but my sister is listed as the beneficiary and so this IRA doesn’t have to go through Probate.

    Here’s my concern. My sister has already decided to take out $36k from the IRA to give each of the kids $5k and give $3k to the Estate. I feel as though I have no authority over this money that needs to go to priority expenses. I’m told that the IRA and the Estate are totally separate. And if that’s the case, then I would have to sell the house which would lead to petitioning the court because half the kids want to keep it.

    I can’t get through to my brothers and sisters that there’s a legal process which I have to follow. That if I don’t, I’m held responsible. I’m told I need to relax and stop making things so difficult and complicating.

    Does this happen?
    You shouldn't be vetting these concerns with total strangers. Follow the advice of the attorney for the estate. You seem to be somewhat aware of your fiduciary responsibilities and the personal risks involved in administering the estate. If you haven't hired a competent attorney to council you through this difficult process, then get one! You'd be a fool to do it alone.

    Also, whether there are sufficient assets to pay the creditors and the expenses of administration OR NOT, exercise your fiduciary authority (Virginia Code Section 64.2-105;106) and SELL THE HOUSE during probate!

    The headaches you are experiencing now are miniscule compared to those that would arise if the house ends up being distributed to 6 separate, but equal owners! A chaotic condition of multiple ownership known as an estate in co-tenancy that most assuredly would eventually end upon in court with someone having filed an action for Partition and the home being possibly sold to the highest bidder at an advertised sheriff's sale. (Virginia Code Section 8.01-83.1)

  5. #5
    Join Date
    Sep 2020
    Posts
    3

    Default Re: Can I Do Something About This

    The Deputy Clerk said "Administrators do not have the power to sell real estate." That we all have to agree to sell the house and if we did not agree, the Administrator (me) would have to petition the court to sell, and if granted, It would put us over the $25k for small estate assets- which would require Inventory and Accounting and changing the bond to a corporate bond...

    Can I remove myself as the Administrator?

  6. #6
    Join Date
    Jul 2018
    Posts
    2,745

    Default Re: Can I Do Something About This

    Yes, generally, an administrator of an estate may resign.

  7. #7
    Join Date
    Jul 2018
    Posts
    157

    Default Re: Can I Do Something About This

    Quote Quoting WutzRite
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    The Deputy Clerk said "Administrators do not have the power to sell real estate." That we all have to agree to sell the house and if we did not agree, the Administrator (me) would have to petition the court to sell, and if granted, It would put us over the $25k for small estate assets- which would require Inventory and Accounting and changing the bond to a corporate bond...

    Can I remove myself as the Administrator?
    Please disregard what I wrote recommending that the house be sold during administration. I was dead wrong. You do not have the power to sell the house and I apologize. In my state and in most jurisdictions the duly appointed personal representative/administrator does possess that authority. But not so in Virginia and some other states. In your common wealth real property that is not effectively disposed of by will descends and passes (directly) in accordance with Section 64.2-200 of the Virginia Code. My advice to seek the counseling of an attorney still stands.

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