Purchasing an asset from an estate I’m entitled to a percentage of

[Katie Young]

Jurisdiction

Colorado

Hi, unfortunately my father passed away in November. I am one of 4 daughters. As we understand it, we are all entitled to 25% of his estate after probate is closed. He has a vehicle my husband and I would like to purchase from the estate. What is the best way to do that? Am I still entitled to 25% of the value even though I want to purchase the vehicle? How do we value the asset as well? Is Kelly blue book sufficient or does it need to be appraised?

Thank you dearly for your help!

 

[Zigner]

If you purchase it now, then you should pay full price for it. The money will go into the estate for distribution. You may end up getting 1/4 of what you paid back, but if those funds are needed to pay creditors with a higher priority, then you may not.

However, you are going to need to discuss this with the administrator of the estate.

 

[adjusterjack]

Condolences.

What is the best way to do that? Am I still entitled to 25% of the value even though I want to purchase the vehicle?

How that works out depends on how well you get along with your siblings.

I see two possible ways to handle this (there may be more).

Let's assume that the car is worth $10,000 for this illustration.

1 - You pay $10,000. The $10,000 goes into the estate account. The car is deleted from the estate's assets. The estate is still worth what it was before the sale of the car.

2 - You pay $7500 for the car. $2500 you keep as an advance on your inheritance. When the estate is settled the $2500 is deducted from your share.

Zigner makes a good point. Number 2 works if there is more than enough cash or liquid assets to pay all the debts and expenses of the estate. If there isn't then the car may have to be sold to pay creditors.

Is Kelly blue book sufficient or does it need to be appraised?

Again, depends on how well you get along with your siblings. If you all get along well and agree on KBB, then go with that. If somebody objects, check Edmunds and NADA price guides for used cars and take an average. You can also look for comparable cars on Craigslist and Auto Trader, understanding that selling price is often 10% or so below asking price. You shouldn't need to spend money on an appraisal unless there's some real hostility going on between siblings and/or the probate court orders it.

 

[Zigner]

Condolences.



How that works out depends on how well you get along with your siblings.

I see two possible ways to handle this (there may be more).

Let's assume that the car is worth $10,000 for this illustration.

1 - You pay $10,000. The $10,000 goes into the estate account. The car is deleted from the estate's assets. The estate is still worth what it was before the sale of the car.

2 - You pay $7500 for the car. $2500 you keep as an advance on your inheritance. When the estate is settled the $2500 is deducted from your share.

Zigner makes a good point. Number 2 works if there is more than enough cash or liquid assets to pay all the debts and expenses of the estate. If there isn't then the car may have to be sold to pay creditors.



Again, depends on how well you get along with your siblings. If you all get along well and agree on KBB, then go with that. If somebody objects, check Edmunds and NADA price guides for used cars and take an average. You can also look for comparable cars on Craigslist and Auto Trader, understanding that selling price is often 10% or so below asking price. You shouldn't need to spend money on an appraisal unless there's some real hostility going on between siblings and/or the probate court orders it.

This is a much more thorough reply than I gave.

 

[adjusterjack]

Thx. Been through it a couple of times when family members died.

 

[Katie Young]

Condolences.



How that works out depends on how well you get along with your siblings.

I see two possible ways to handle this (there may be more).

Let's assume that the car is worth $10,000 for this illustration.

1 - You pay $10,000. The $10,000 goes into the estate account. The car is deleted from the estate's assets. The estate is still worth what it was before the sale of the car.

2 - You pay $7500 for the car. $2500 you keep as an advance on your inheritance. When the estate is settled the $2500 is deducted from your share.

Zigner makes a good point. Number 2 works if there is more than enough cash or liquid assets to pay all the debts and expenses of the estate. If there isn't then the car may have to be sold to pay creditors.



Again, depends on how well you get along with your siblings. If you all get along well and agree on KBB, then go with that. If somebody objects, check Edmunds and NADA price guides for used cars and take an average. You can also look for comparable cars on Craigslist and Auto Trader, understanding that selling price is often 10% or so below asking price. You shouldn't need to spend money on an appraisal unless there's some real hostility going on between siblings and/or the probate court orders it.

thank you so much for the help and great example!

 

[adjusterjack]

You're welcome.

 

[zddoodah]

As we understand it, we are all entitled to 25% of his estate after probate is closed.

Assuming he was unmarried at the time of his death and had no will that said otherwise, this is correct.

He has a vehicle my husband and I would like to purchase from the estate. What is the best way to do that?

Negotiate with the executor of the estate for payment of fair market value.

Am I still entitled to 25% of the value even though I want to purchase the vehicle?

Yes.

How do we value the asset as well? Is Kelly blue book sufficient or does it need to be appraised?

As a practical matter, it depends on what your siblings think about this. However, I doubt that a deal for the KBB price would be successfully challenged.

The executor should be discussing this with the attorney he/she (hopefully) retained to assist with the administration of the estate.