News & Insights

Dying Intestate Could Result in a Lower Fair Market Value for Your Property
September 8, 2015
by Marcellus Lebbin

 

South Bend / Mishawaka, IN – There are many risks associated with dying intestate (dying without a will), one of which is the mandated reliance on a court appointed Personal Representative. For individuals who die without naming an Executor, the court appoints an individual to administer the estate. At the time of appointment, a Personal Representative takes an oath or affirmation that he or she will faithfully discharge the duties of his or her trust according to law (Indiana Code section 29-1-10-3), however, the Personal Administrator likely does not have the same personal attachment to the estate that a family member or close friend would have.

A recent Indiana Court of Appeals case, In re: the Estate of Robert F. Darter, underscores the rule that a Personal Representative can sell property for less than the fair market value filed with the inventory.

In this case, Mr. Darter died intestate, leaving one son (“Plaintiff”) who was still residing on his father’s property.  The personal representative filed a verified inventory, with a warranty deed and a multi-page report of the Property, which concluded that the “Assessed Value” and the “True Tax Value” of the Property were both $120,700. Plaintiff argued that the personal representative violated Indiana Code sections 29-1-15-13 and -14 and breached its fiduciary duties by petitioning the trial court to approve a sale price of $50,000, which Plaintiff contends is less than fair-market value and less than the value set forth in the inventory. However, Indiana Code section 29-1-15-14 provides that the fair market value of a property for purpose of sale is the fair market value set forth in the inventory, “unless the court directs that the property be appraised or reappraised.” In this case, a licensed real-estate agent opined that “the court should accept the offer that was written by the buyer of $50,000.” The trial court considered this opinion to be an appropriate appraisal of the Property’s fair market value and the appellate court affirmed.

While developing an estate plan does take some work, the unintended consequences of dying intestate can be severe. Instead of being able to decide in advance how you want your property divided among your heirs, your assets will be distributed according to the laws of intestacy in the state where you were domiciled and/or owned real property at the time of your death. These laws have no way of measuring sentimental value and often lead to fighting among heirs over the distribution of certain items.

At May Oberfell Lorber, our attorneys have experience working with clients to avoid the consequences of dying intestate by developing a personal estate plan. We’ve seen the heartache associated with ill planned estates and would be happy to assist you in protecting your family from this anguish.

 

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