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Loren
Loren, Attorney
Category: Estate Law
Satisfied Customers: 29118
Experience:  30 years experience in the practice of estate law.
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My mother has recently passed. There are 4 siblings, 2 of

Customer Question

My mother has recently passed. There are 4 siblings, 2 of them are not part of this. My mother in her will stated that me and my older sister are to share her possession's which include 2 house's. One house is free and clear, no mortgage. The second house has about $270,000 in a mortgage and home equity loan, which I'm currently living in and paying the mortgage under mom's name. I told my sister I would buy the house for the price of the mortgage's, she agreed. We have a lawyer doing the probate of the will. He wants to do a Gift of Equity of $50,000 on the sale of the house, saying my mother did not have much Equity, she has about $30,000 in different accounts. So I can turn around and give my sister $25,000 of it. Why would a lawyer want to do this? Should I get my own Attorney to protest this?
Submitted: 12 days ago.
Category: Estate Law
Expert:  Loren replied 12 days ago.

Good evening. I am Loren, a licensed attorney and I look forward to assisting you.

Expert:  Loren replied 12 days ago.

There is nothing sinister about a gift of equity. When one party sells their home to another for less than its fair market value, the difference in the sale price and the appraised value is considered a gift of equity.

In your case it is just a way to balance the books when the estate assets are distributed. You do not need to protest this, unless you disagree with the market value being assigned to the house.

Customer: replied 12 days ago.
Thank you Loren, I'm Don
Expert:  Loren replied 12 days ago.

Hi Don. Do you see my answer.

Customer: replied 12 days ago.
I see your answer, I don't see why I should have to give my sister $25,000, when she agreed for me to buy the house for the liens that are one the house
Expert:  Loren replied 12 days ago.

I understand. You can continue to negotiate. The provisions of the will need to be followed. So, if the estate is being divided equally, it just needs to balance when it is distributed. So, if your sister is getting a house free and clear and you are gettiing one saddled with debt, the debt should be apportioned in the distribution, as well. That may be an element you can negotiate.

Customer: replied 12 days ago.
The house that we are discussing is for arguments sake is worth $300,000 with $270,000 in mortgage's The other house is worth close to a million. I'm supposed to buy this house and then we are to split the other. I just don't see why the gift of equity
Expert:  Loren replied 12 days ago.

Are you still with me?

Customer: replied 12 days ago.
I am
Expert:  Loren replied 12 days ago.

The gift of equity is necessary to balance the books, but you are going to need an attorney if the assets are to be split evenly and your sister is taking a million dollar home free and clear and you are getting a home with no equity and worth one-third of the other.

Expert:  Loren replied 12 days ago.

The market value has to be accounted for in the estate, but you should not be paying anything to your sister. By my calculation, she should be paying you.

Customer: replied 12 days ago.
Look up a few response's ago
Expert:  Loren replied 12 days ago.

Got it. well the gift of equity is necessary to balance out the inventory of the estate and account for capital gains. You can challenge the market value, but the full market value has to be accounted for in the estate.

Expert:  Loren replied 12 days ago.

Did you have further questions? I am happy to continue if you need further information.

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