Found Money

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
Tony_L
Posts: 92
Joined: Tue Apr 07, 2009 8:13 pm

Found Money

Post by Tony_L »

I would sincerely appreciate any help on finding a definition, explanation, or link to a short article or story explaining what I have have heard described as "found money" which I can forward to the beneficiaries of an estate.

The reason is that I am involved with the settlement of an estate worth several million dollars. There are 6 beneficiaries involved.

Several of the beneficiaries are independently wealthy and view their share of the inheritance as "found money". Specifically, a significant portion of the estate is invested in various types of real estate. The wealthy beneficiaries do not want to sell the real estate. Rather, they want to hold it and take the chance it will rise in value significantly at which time it would be sold and the money distributed. If it doesn't rise in value for several years or longer, they do not care because it is "found money" they weren't planning to have it anyway - no big deal!

The remaining beneficiaries are not nearly so well off financially. They do not want to risk the money by keeping it involved in the various real estate holdings. To them, the money is very much "real money". If they lose all or a portion of it or do not have access to it (as in selling the real estate and receiving the money) their potential lifestyle will be significantly affected. They want to sell the real estate and pocket the proceeds.

It is possible that the wealthy beneficiaries would buy out the not so wealthy ones. However, there is no assurance this will be done.

I am looking for something to send to the wealthy ones that will explain to them the difference between their view and the view of the not so wealthy - in other words a definition, explanation, etc. of found money which they can hopefully understand. I have tried explaining but I am family and am not being heard.

Thank you for any help you can give.

Tony L
User avatar
In The Weeds
Posts: 309
Joined: Fri Mar 20, 2009 1:04 pm
Location: Texas

Post by In The Weeds »

What does the executor of the will or the will say about it (trustee if a trust)? It is his decision to make.

If agreement can't be reached is to divide the property/land amongst the heirs as the will or trust declares so each heir owns their specific share. Then they can sell it or keep it as they wish.
Last edited by In The Weeds on Mon Aug 17, 2009 8:08 pm, edited 1 time in total.
WISDOM comes with age... But sometimes it's an optional feature.
sommerfeld
Posts: 1159
Joined: Fri Dec 12, 2008 7:02 pm

Re: Found Money

Post by sommerfeld »

How many pieces of real estate, and how is the rough value distributed among them? What fraction of the heirs (by share of the estate) want cash vs. real estate?

Can you sell half the real estate, deed the rest to the independently wealthy heirs, and make everyone happy?
Topic Author
Tony_L
Posts: 92
Joined: Tue Apr 07, 2009 8:13 pm

Post by Tony_L »

The executor, being one of the wealthy beneficiaries, is leaning toward not selling the real estate. The following may put his understanding of risk in perspective. Almost immediately after administration of the estate began, it was known that a significant portion of the common stock would have to be sold to make the both the state and federal estate tax payments. He chose to not sell any of the stock because "it might go up".

Because of the values of the various properties, selling half and deeding the rest is not a viable option.
User avatar
retiredjg
Posts: 54082
Joined: Thu Jan 10, 2008 11:56 am

Post by retiredjg »

It is possible the only thing these people will understand is "lawsuit". And ugly proposition, for sure. But if you need your money and they are not willing to accommodate that, I'm not sure you have a lot of choices.

The law is not always logical, but I would find it hard to believe that you cannot, in some way, get your portion of the estate regardless of what they want.

It is up to the executor to make sure the estate is executed. Make a (nice) demand, and leave it up to him to figure out how to do it. But try to know your rights under the law before you go make everyone angry.
Rrolack
Posts: 76
Joined: Fri May 22, 2009 12:18 am

Post by Rrolack »

I believe that in many states, if a piece of property is jointly owned, and one of the parties wants to sell, the courts will force the property to be sold.

See the attached link:

http://www.palmbeachpost.com/business/c ... 28_vc.html
chaz
Posts: 13604
Joined: Tue Feb 27, 2007 1:44 pm

Post by chaz »

Rrolack wrote:I believe that in many states, if a piece of property is jointly owned, and one of the parties wants to sell, the courts will force the property to be sold.

See the attached link:

http://www.palmbeachpost.com/business/c ... 28_vc.html
In some states, an heir can sell his/her share of the real estate.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page
User avatar
MossySF
Posts: 2361
Joined: Thu Apr 19, 2007 9:51 pm
Contact:

Post by MossySF »

Tony_L wrote:The executor, being one of the wealthy beneficiaries, is leaning toward not selling the real estate. The following may put his understanding of risk in perspective. Almost immediately after administration of the estate began, it was known that a significant portion of the common stock would have to be sold to make the both the state and federal estate tax payments. He chose to not sell any of the stock because "it might go up".
Sounds like a lawsuit waiting to happen -- especially if say these assets don't go up in 5-10 years.
JDCPAEsq
Posts: 1835
Joined: Mon Mar 05, 2007 2:58 pm
Location: Southwest Florida

Post by JDCPAEsq »

The job of an exector is not to invest or to speculate with the estate assets. His job is to liquidate the estate and distribute according to the will. The beneficiaries who wish cash rather than real estate should petition the court responsible for the estate administration asking that the executor be compelled to adhere to his responsibility. In most states real estate immediately vests upon death in the heirs and they therefore can bring a partition action to compel a sale. The executor is risking personal liability with his present position.
John
User avatar
aainvestor
Posts: 512
Joined: Fri Mar 02, 2007 1:12 pm
Location: Northern Virginia

Post by aainvestor »

I was involved in such a transaction thru my ex several years ago. In the end the wealthier relatives (including her mom) bought out the ones who wanted the cash.
The problem came a couple of years later when there was an offer from a develper to the wealther ones who held the property. All of a sudden the others were back wanting "their share" of the increased value. That became a mess but was decided correctly that they had sold off their interest.

If the ones that want to keep the property cant finance it or buy off the others, then they can't afford to keep the property and it should be sold. I do believe that is how the law views it.

F-
cdwood
Posts: 138
Joined: Thu May 31, 2007 9:37 pm

Post by cdwood »

Tony_L wrote:The executor, being one of the wealthy beneficiaries, is leaning toward not selling the real estate. The following may put his understanding of risk in perspective. Almost immediately after administration of the estate began, it was known that a significant portion of the common stock would have to be sold to make the both the state and federal estate tax payments. He chose to not sell any of the stock because "it might go up".

Because of the values of the various properties, selling half and deeding the rest is not a viable option.
If the executor will neither sell stocks nor real estate to raise money for state and federal estate tax payments, where is that money coming from? It sounds like something MUST be liquidated to pay estate taxes.
ohiost90
Posts: 637
Joined: Wed Apr 11, 2007 3:24 pm

Post by ohiost90 »

Tony_L wrote:The executor, being one of the wealthy beneficiaries, is leaning toward not selling the real estate. The following may put his understanding of risk in perspective. Almost immediately after administration of the estate began, it was known that a significant portion of the common stock would have to be sold to make the both the state and federal estate tax payments. He chose to not sell any of the stock because "it might go up".
.
He could always sell the positions and then buy back the positions with the proceeds of the sale.

As others stated, he isn't doing his job.
Topic Author
Tony_L
Posts: 92
Joined: Tue Apr 07, 2009 8:13 pm

Post by Tony_L »

thanks for all the good replies. We have some time to work through the issues. We need to generate an agreement whereby the "have's" purchase the "have nots" shares.
I was merely hoping educate the have's on the reasons why the have nots may not want to hold the assets so the haves would be more responsive to the have nots requests.
Again, thanks.
User avatar
In The Weeds
Posts: 309
Joined: Fri Mar 20, 2009 1:04 pm
Location: Texas

Post by In The Weeds »

The "have nots" could always sell their percentage of ownership to some other "investors". That might not set to well with the "haves".
WISDOM comes with age... But sometimes it's an optional feature.
Post Reply