Questions in Alabama
New Member
- Jurisdiction
- Alabama
Handling an estate as administrator and am also one of the three heirs. The estate is basically split 3 ways and we three siblings have no issues with anything in the planned distribution of the remainder of the assets. We are however struggling on how to approach the promissory notes.
Approximately 1/2 the value of the estate resides in 8 promissory notes issued over the past 10 years with a combined value (current principal owed) of 900K. 2 notes have less than 2 years remaining while the remainder have terms remaining of up to 12 years. Interest rates vary between 0% and 8%. All are current with the payments. The notes are secured by a mix of commercial, residential and agricultural properties.
The cleanest way to dispose of them and allow us to close the estate would be to sell them at a significant discount to a third party. This would give us approximately 60% of the current value. A second option would be to assign individual notes to heirs but the current values / interest rates / risk don't really align to that.
The third option is to transfer the promissory notes to an entity representing the 3 siblings. This trust / LLC or something else, would take ownership of the notes. It would collect the payments and at intervals distribute them to the siblings. It would continue until the notes were paid off completely or the mortgagees sell the properties and payoff the notes. Is this even an option?
Open to any suggestions on how to handle this so that the estate doesn't drag out. Thanks
Approximately 1/2 the value of the estate resides in 8 promissory notes issued over the past 10 years with a combined value (current principal owed) of 900K. 2 notes have less than 2 years remaining while the remainder have terms remaining of up to 12 years. Interest rates vary between 0% and 8%. All are current with the payments. The notes are secured by a mix of commercial, residential and agricultural properties.
The cleanest way to dispose of them and allow us to close the estate would be to sell them at a significant discount to a third party. This would give us approximately 60% of the current value. A second option would be to assign individual notes to heirs but the current values / interest rates / risk don't really align to that.
The third option is to transfer the promissory notes to an entity representing the 3 siblings. This trust / LLC or something else, would take ownership of the notes. It would collect the payments and at intervals distribute them to the siblings. It would continue until the notes were paid off completely or the mortgagees sell the properties and payoff the notes. Is this even an option?
Open to any suggestions on how to handle this so that the estate doesn't drag out. Thanks