"Arm's Length Transaction" ?

[breeinmo.]

I believe the OP meant it HAS to be sold to a non-family member/heir. They are scared the trustee will sell it to a "friend" on the cheap, so they can then buy it for themselves. If I'm right: OP, the poster who said to cancel any purposed sale at below the appraised value is correct.

When I was selling my parents home, I broke my neck to get at least, if not more than the court appointed appraised price. If I had sold it cheaper, the other heirs could have come after me for the shortfall.

Just keep your eyes open, and make sure the trustee got a fair appraisal and that they sell at that price or more. Good luck. Just to stress the point, make sure the appraisal is dead on. I'd worry more about that, than who buys the property. That's why I got a court appointed one, so no one could question the true value.

[Utopian Slums]

Originally Posted by jackmichigan

It sounds like the OP knows what an arms-length transaction is. It appears that some of the family apparently want to sell for top dollar (which would likely NOT be a sale to a family member) and some want to keep it in the family. The confusing part is that the Trustee may or may not be a family member and there is a lot which really isn't explained in this thread. So, yes, the entire situation is confusing.

Yes! Thank you for providing your better explanation. I will try one last time. I'm trying to make the situation as simple and straight fwd to understand but maybe it just cannot be done in the context of a forum. Or maybe i should try in the "financial" thread.

________________

Background Info:

There is a trust in my extended family. It only includes 1 residential property. Arms Legnths transactions are strictly prohibited in this trust because all agreed to sell for most money.

The TRUSTEE IS A FAMILY member. The OTHERS who are beneficiaries of trust are ALSO FAMILY. i.e,- The trust is ALL FAMILY. No nonfamily members in trust.

There are 2 sides- the OTHERS and TRUSTEE.

NEITHER PARTY wants it in the family. And EVERYONE wants top dollar. But the "OTHERS" are concerned that the "TRUSTEE" will accept a low-ball offer which would actually be a from a SHILLER BUYING IT FOR TRUSTEE TO FLIP. The OTHERS are worrying that the TRUSTEE would thus benefit more than the themselves (i.e.-the OTHERS) from his flip.

__________________

My Question:

Can the TRUSTEE do this without the OTHERS finding out? Couldn't the OTHERS trace the paperwork back and take TRUSTEE to court? Wouldn't it NOT BE WORTH IT TO TRUSTEE after considering the taxes for the transaction he would have pay to the SHILLER so the SHILLER could pay in taxes/capital gains?

I personally think the OTHERS are being paranoid and that the TRUSTEE would NOT buy via a shill and flip due to the impediments above.

Am i being a Pollyanna or do the OTHERS really have reason to distrust the TRUSTEE? Could the TRUSTEE do something totally different than i mentioned above to benefit himself and leave out the OTHERS that i am not seeing?

[Utopian Slums]

Originally Posted by breeinmo.

I believe the OP meant it HAS to be sold to a non-family member/heir. They are scared the trustee will sell it to a "friend" on the cheap, so they can then buy it for themselves. If I'm right: OP, the poster who said to cancel any purposed sale at below the appraised value is correct.

When I was selling my parents home, I broke my neck to get at least, if not more than the court appointed appraised price. If I had sold it cheaper, the other heirs could have come after me for the shortfall.

Just keep your eyes open, and make sure the trustee got a fair appraisal and that they sell at that price or more. Good luck. Just to stress the point, make sure the appraisal is dead on. I'd worry more about that, than who buys the property. That's why I got a court appointed one, so no one could question the true value.

Thank you! This helps a bit. You sound like you were a straightfwd honest person in these transactions.

The trustee actually bought the property in the trust for $1.00 to avoid probate. (I've written my feelings about this in a few other threads.)

I know what the last tax appraisal was but they are selling it for at least 50% more than this. I know that NEITHER SIDE would EVER consider a point appointed trustee because all would see that as extra money out of their pockets!

Unfortunately, NONE OF MY FAM (NEITHER THE "OTHERS" NOR THE TRUSTEE) are good OR honest people!!

Honestly, i should not care as much as i do but i am actively following the situation. I am VERY curious as to the "game theory" behind it!

I get so many paranoid phone calls and emails that i'm starting to believe there IS something the trustee could do and is plotting to screw the rest of his fam over!!?

[thelopez2]

Years ago a lady died. A big 'for sale' banner with a phone number when up. I was never able to get a phone call returned from day one. Years later I was told it was in trust with the proceeds going to an organization. I didn't have a shot and neither did the developer that told me the story about it. I looked on public record how much it sold for. Membership has its privileges and it is about who you know.

No you won't be able to figure out and track and prove if the trustee has done anything fishy.

As far as can it be worth it despite taxes, transfer fees, etc, of course.

[Utopian Slums]

Originally Posted by thelopez2

Years ago a lady died. A big 'for sale' banner with a phone number when up. I was never able to get a phone call returned from day one. Years later I was told it was in trust with the proceeds going to an organization. I didn't have a shot and neither did the developer that told me the story about it. I looked on public record how much it sold for. Membership has its privileges and it is about who you know.

No you won't be able to figure out and track and prove if the trustee has done anything fishy.

As far as can it be worth it despite taxes, transfer fees, etc, of course.

Hmmm . . . . . I appreciate your feedback.

I see the taxes as being the biggest impediment unless a shill buyer was going to hold it in Trust (or just hold it) for at least 2 years. But then again, I'm not sure why they are even selling it now when it has only been in trust a year and the Trust will have to pay taxes on it. (I assume so anyways. I don't see how they could not?)