Purchasing off market via executor of the will - Ran into roadblock.. - Path forward?

Question

I'm looking to purchase an off-market home in my neighborhood and ran into a hurdle that I might not be able to overcome...For context my elderly neighbor who I've been friends with for the last couple of years recently passed away. His sister is the executor of his will and is staying at his home to fulfill all of the end of life obligations that he has. We discussed me purchasing the home and had verbally agreed to sell the house to me. I know that a verbal agreement doesn’t mean much so I was looking to get her into a purchase contract.

The sister visited her brother's lawyer to discuss the responsibilities of being executor of the will and what needs to be done in order to sell the house. She found out from her brother’s lawyer that he has put the house into a trust and that the decision of what happens to the house is up to the trustees. If that is the case, does the executor of the will, in this case his sister have any influence on whom the trustees sell the house too? Is there anything I can do to ideally get them to not list the house and sell to me, I’m assuming there might not be many options, especially since the sister and I had agreed on a price that was below market value given I was planning to invest money to remodel the home and was planning to honor his wishes of not having the home knocked down to make a townhome or new home. I think it's a long shot, but looking for any possible ideas...

Jay King · Answer

Typically a trust is a vehicle to shield assets. Imagine a car, you can place assets in the trunk passengers in the car and trustee chosen by the trustor is driving or "executing" the trust. In most cases the executer of a will is the trustee. Never trust an attorney you have not paid for yourself neither should your neighbor. She should consult her own attorney for her brothers lawyer has a fiduciary responsibility to him NOT her.

Frank Chin · Answer

Hello Jim:Trustees and executor may or may not be the same individuals. See Trustees vs Executors I am not an estate attorney, My home and real estate are placed into a trust. Me, my wife and daughters are named as trustees. Separately, we have wills written and my wife named as my executor and me as her executor under my wife's will. Someday, after my death or my wife's death, we would have to name another executor, either one of my daughters, or someone else. If we name someone other than our daughters as executors, that person cannot make a deal with you as the authority to sell the property passed to our daughters, the trustees, as the property is now in their hands. It's not part of property or assets under probate as explained by our attorney.In your case, you don't know the details of the estate, so the deal with the executor may or may not work out. The road forward is that the executor would have to work with the trustee or refer you to a trustee. Separately, there may be issues if the executor resides in a different state from the decedent depending on state laws.

Jayne Segman · Answer

Hi, im in a similar situation. i would advise against simply writing to the trustees to offer. i don’t think it would work out well, since its under market value. Unfortunately, most people in that position don’t care about what our own personal situations are, they’re interested in their own ends. I’d suggest possibly talking to the sister again and get her okay to mail them the letter. Hold off on putting your offer in the letter yet. Wait till they get back to you, and know who you are firstly. Then make your offer. consider going a little higher, and say you can get the ball rolling right away. Good luck!

Jim Doyle · Answer

Thanks @Jay King - The trustee in this case is a trust company that is managing the estate, you're saying I can offer them additional money to sell the house to me and it might work versus an individual person who was named as a trustee? Was your situation similar where the trustee was a trust company?

Jay King · Answer

We dealt with similar scenario gave each family member named in the will $2k and the trustee $10k and it was ours.

Jim Doyle · Answer

Thanks @Rick H.- Agreed, I'm just an interested buyer, the only potential opportunity I have is I'm an interested buyer who is ahead of the rest of the interested buyers with the hope that the trust would be open to an off-market sale to me. Big TBD though on if it will work out..

Rick H. · Answer

Anytime a legal matter is of concern, it’s helpful to include the State where the property is located and perhaps other pertinent details that would be useful. Generally speaking, attorney reps a clients and wishes to advocate for their position. If attorney reps a successor trustee, they want to protect that person in carrying out their fiduciary duties.

That would usually include a bias towards seeing that an asset to be sold gets maximum market exposure. Absent a clause in a trust that provides for a beneficiary to designate powers of sale (or will, if that’s the controlling document) then you are just an interested buyer party.

Jim Doyle · Answer

This is helpful, I've defintely been respectful, I've been helping her out with a lot of the tasks that are part of cleaning out the house and supporting her with additional information via Google as she is in her 70's. Hoping she'll be able to influence the trustees as she does not want the home to go on the market and deal with the hassle of a listing agent and all that's invovled in selling a home.

Frank Chin · Answer

Hello Jim:

My wife's mom died 2 years ago and she served as executrix of her mom's estate. My dad served as the administrator of many of his friends' estate as they had problem with English. While the sister serving as executrix may or may not have ownership, suggest you show her some respect going through her if the intent is to gain ownership. Even though my wife is executrix, she shared the estate with two siblings and one thing she had to do before proceeding is she has to obtain a letter from her siblings that they had no objections to how the assets are distributed. In other words, she's in charge.

Jim Doyle · Answer

That makes sense Frank and thanks for that context. I do believe that is the scenario I'm in, the trustees own the assets and the executor (the sister) is also the main beneficiary of the trust, so my thought was that she'd be able to have influence over the trustees over whom they sell the house too. I think I need to write my purchase contract to the trustees to see if they'd consider my offer as this is what the sister as the beneficiary and executor would like. Not sure if it works like that, but it doesn't seem I have many options at this point.

Purchasing off market via executor of the will - Ran into roadblock.. - Path forward?

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