Legal Question in Wills and Trusts in Pennsylvania
Estate Settlements in PA
My grandparents both passed away and left their house to the 3 children. the 3 children agreed that my mother would apply for a mortgage and buy their part from them. The mortgage company will not approved the mortgage now (this has been going on for a year) My mother's brother is full of greed (he had to file bankruptcy twice)and is now threatening to sue the estate for his share of the money. Can you explain to me the actual procedure. Is there anything that my mother can do - are there any options?
Thank you for your assistance
2 Answers from Attorneys
Re: Estate Settlements in PA
One possible remedy that might be available to your Uncle would be to petition the court to remove the executor. To accomplish this, he would have to show that the acting executor is in some way wasting the estate�s assets or interfering with the administration of the estate. The reason that he might do this would be that a new executor would then be put in place who might be more willing to sell the property quickly and distribute the sale proceeds.
If your mother would qualify for a smaller mortgage amount from the bank, then it may be worth talking to the siblings to see if they would be interested in taking back a private second mortgage for the balance of the purchase price.
Re: Estate Settlements in PA
Have either of your grandparents' estates been probated and administered? The executor[s] should be in a position to have a family settlement agreement prepared, to be signed by the heirs/ beneficiaries, indicating that they agree that they will "sell" their respective interests in the house to your mother. The agreement should also specify what your mother will pay to each of the other two heirs. The total value of the property should be in line with fair market values, or the lender will not make a loan to your mother. The settlement agreement would also cover other aspects of the estate administration, including payment of inheritance and estate taxes and debts, and the heirs/beneficiaries approving the administration, and other issues that are usually covered by such agreements.
Once an agreement is signed, it should be submitted to the lender, and when the mortgage loan is approved, settlement or closing may be scheduled. At that time, the other two heirs will sign a deed, and they will be paid for their interests. Your mother should certainly have title insurance for this transaction.
The fly in the ointment is that one brother is now threatening to sue, and does not sound cooperative, as he may once have been. Perhaps with the promise that he will be paid for his interest in the house, he will be more cooperative. However, if he has valid claims that the administration has been improper, he may seek to go to court to force a proper administration.
It sounds as if your mother should consult with an experienced real estate and estate attorney to assist her in this.