Tips for navigating inheritance and still loving your family at the end

Submitted by dcdavys t3_z929uq in personalfinance

Hi all, My grandparent recently died and left their estate in a trust, split into quarters for myself and three cousins. At the end of the day, my goal is to not owe any money and not be in conflict with my cousins. I don't know the total value of the estate yet, but we're talking a few hundred thousand tops, not millions. Here are some pertinent details:

As written, a small family property counts toward my quarter; my grandparent wanted this property to stay in the family in its entirety, and that is also my and my cousins' preference. It is in a rural, LCOL area and nowhere near any potential development. My understanding is that once all the other assets and debts are settled, if the property is worth less than a quarter of the total estate, I will receive some cash, while if the property is worth more than a quarter of the total estate, I would need to pay the other parties to keep the property; alternatively we would have to sell the property and split the proceeds.

My cousin is the trustee and executor and (god bless them) is trying very hard but is not necessarily the most financially savvy or experienced in real estate matters. TBF I'm not either, but I read a lot of reddit :D I really have no concern about making a profit off of this inheritance so I have largely refrained from giving any unsolicited advice and have just tried to stay out of the way. However, the executor cousin recently told me they were having the property appraised and would send me a copy for my records. What they sent was drawn up by a realtor and is labeled a "drive by opinion of valuation". They did not enter the dwelling or draw up any comparisons of recent sales in the area or potential rental income and did not have a forester evaluate the timber potential. I truly have no idea if their opinion is high or low, as I don't live in the area. My preference is to avoid conflict and just roll with this, but if the high end of the estimate is used to say I owe money to the other parties, how could I politely request an actual appraisal and not have this devolve into family drama? Should I raise the issue now or wait to see if it is even an issue? Is an appraisal likely to come in higher and I am essentially shooting myself in the foot? Should I suggest the land be put in a family trust for everyone's benefit and the rest of the estate be split? Any advice or similar experiences you could share are much appreciated.

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MikeWPhilly t1_iyexvpk wrote

Depending on property value drive by valuation as per banks (just had one done for an investment property) is good for about 20-25% bandwidth. Or rather it becomes an option if you are putting that amount down and the house is still standing.

So suffice to say it could be a huge range. Frankly if you want to do it right but not cause issues you could offer to pay for a real appraisal (about $500) and then you’d have good numbers to work with.

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cephalus t1_iyf5hcy wrote

Honestly, just go have an appraisal done without telling anyone else, pay the 500$, and if it turns out the number was fair (or in his favor) no one needs to know that OP had a real appraisal.

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Liquidretro t1_iyeygrx wrote

Might be time to consider suggesting that your cousin hire an estate attorney paid for by the estate, to help navigate all these issues in a unbias and informed manner. Make sure things are done correctly and fairly, with as little stress as possible.

Was the property split evenly between all parties? If so I'm not sure I understand the issue of potentially owing others. Also keep in mind for the future that someone will need to pay property taxes (assuming your state has them) on the property and deal with any income it generates. Some a trust or something might not be a bad idea to deal with this. That's where a professional could give good advice as it sounds like it's more complex than anyone's experience level.

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harrison_wintergreen t1_iyfbqsk wrote

check with /r/legaladvice

>how could I politely request an actual appraisal and not have this devolve into family drama?

'that drive-by is a good start but I'd be more comfortable with a fully detailed appraisal and comps.' this is a totally reasonable request. you can't control their reactions to it, and the trustee should be willing to follow reasonable requests and might be obligated to follow reasonable requests.

> Is an appraisal likely to come in higher and I am essentially shooting myself in the foot?

maybe higher, maybe lower. an appraisal is just an estimate, it's not an offer to buy. people can have this idea that an appraisal is a 100% correct guarantee or something. it's just an educated guess. that's it.

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No_Tension_280 t1_iyeo9ez wrote

What does the IRS require? If they require an actual appraiser to do it, then tell them your accountant suggested that.

We hired a guy once to appraise some business equipment, and our bank would not accept the appraisal because he was not an accredited appraiser.

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