Legal Question in Wills and Trusts in Kentucky
Is this legal?
My mother has 4 children, two of which have been named power of attorney, my sister, and my brother, as I live out of state and my other sister in unable to manage her own money much less that of my mother. The sister who has power of attorney and her husband want to buy my mother's home for $80,000 and put the money in the bank for my mother to live on for the rest of her life. The power of attorney has kicked in because my mother is no longer able to make cometent decisions regarding her finances. The house has not been appraised and I'm sure it is worth more than $80,000. My sister says that they intend to buy the house and allow my mother to still live there and pay them a bit of rent each month. However, in my mother's will, which I understand takes over at the time of her death, my mother states that whatever is left after paying her debt, is to be split equally between her four children. That being said, is my sister and her husband allowed to buy the house from my mother and flip it for porfit without sharing the profit between the 4 of us? My brother who as I mentioned is co-power of attorney does not agree with this, but if he did, is this legal?
2 Answers from Attorneys
Re: Is this legal?
I am a little confused, is your mother in CA or KY (the system seems to be showing both up). I cannot comment on KY law as I am not licensced to practice there. Under CA law, your sister and her husband most likely owe a duty to manage your Mother's estate. While they might have the right to purchase the property (depending on the DPA and any Trust instrument), they would almost definetly be required to pay fair market value for the house. Meaning that while they might be able to purchase it, they would have to pay FMV for, so there is no flipping it for extra money.
If the case is in KY, then you want to change your "location" as this question is currently being directed to CA Trusts, Wills and Estate Attorneys.
Re: Is this legal?
I concur with the answer of Mr. Burton in Sacremento. Kentucky law is similar to California law in this respect and they owe a duty of good faith and fair dealing to your mother. Ripping her off would not be "legal" with or without power of attorney.
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