Legal Question in Wills and Trusts in California

Dear Law Guru:

My deceased parents left a building in their Trust and named my brother as Trustee. My brother, sister and I are the three beneficiaries. The Trust states that on the death of the second Trustor, the Trustee shall distribute the Trust Estate in equal shares to the three children of the Trustors. Both of my siblings want to buy me out. My brother, the Trustee wants to use the bank's appraisal for his and my sister's lean application as the basis for price negotiation. Am I limited to this bank appraisal as the sole basis? Do I have a right to bring a realtor as well as an independent appraiser into the vacant building for the purpose of doing a walk-through to establish the fair market value of the property? Do I need to get permission from the Trustee or just inform him of such a walk-through? I see a huge "Conflict of Interest" on the part of the Trustee if he were to limit me on what professional info I could receive to make my decision. Am I correct?

Are there legal restrictions that limit my access to the building? The Trust does not contain any such restrictions.

What is the fairest way of establishing a price for the buy-out? (Bank appraisal of real estate for bank loan, independent appraisal by certified general appraiser, real estate broker's Opinion of Value, or combination of all three)

Thank you very much and looking forward to your answers.

Robert Lem


Asked on 10/09/12, 12:18 am

1 Answer from Attorneys
Anthony Roach Law Office of Anthony A. Roach

This is really more of a real estate question. If the property has been distributed under the terms of the trust, then the property title is most likely held as a tenancy in common. When the tenants in common can't agree on a buyout, these things end up in court as a partition by sale. At that point, you do have the right to have your own independent appraisal, but the court can also appoint a probate referee and problems can arise. (In my experience, probate referee appraisals tend to be less than market value, because probate referees tend to appraise real property at a lower value to reduce tax implications.)

A broker's opinion of value is generally inadmissible in court, because a real estate broker is not licensed as a real estate appraiser and is not qualified to testify as to an expert opinion on market value. Broker's also tend to overvalue property when they are a listing broker, to increase any commission they are going to get, where as a buyer's broker will come in with a lower value.

You may want to repost your question in the category for Real Estate, so that more real estate oriented lawyers can respond to your question.

Read more
Answered on 10/09/12, 10:00 am


Related Questions & Answers

More Probate, Trusts, Wills & Estates questions and answers in California