Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, December 22, 2020

Virginia Supreme Court: The Term “Fair Market Value” In Codicil Provides No Certainty As To Price

WillsIn Wilburn v. Mangano, the Virginia Supreme Court considered whether an "option to purchase decedent's tea; property at 'fair market value' provided sufficient certainty as to the sale price to warrant specific performance of a contract for sale." The case was decided on December 10, 2020. 

Jeanne Mangano executed a will in which she left her residence to her three daughters, ("the sisters"). Jeanne granted her son Anthony, an option to purchase the Property from his sisters (the "Option"). According to the will, Anthony could exercise the Option within one year from the probate of Jeanne's will, and at a purchase price equal to the Property's real estate tax assessment in the year of Jeanne's death. 

Jeanne executed a codicil afterwards which revised the purchase price "to an amount equal to the fair market value at the time of my death." Jeanne died in November 2005. 

Anthony decided to exercise the option to purchase and sent a letter to his sisters that was meant to give them legal notice of his intent to exercise the option. The Sisters then filed suit to compel Anthony to purchase the property. "The Sisters obtained two appraisals of the fair market value of the Property as of Jeanne’s death — one valuing the property at $311,000, and the other at $270,000." 

Anthony claimed that there was no enforceable contract because fair market value as of the date of Jeanne's death is not "a sufficiently specific term to establish mutual assent to the Property's purchase price." The circuit court agreed. 

In Virginia, "fair market value" means the price that a seller is willing to accept and a buyer is willing to pay on the open market and in an arm's-length transaction." 

The Virginia Supreme Court held that because there was no certainty as to the price set forth in the codicil, along as no way to ascertain it with sufficient certainty, the circuit court decided correctly.

https://lawprofessors.typepad.com/trusts_estates_prof/2020/12/virginia-supreme-court-the-term-fair-market-value-in-codicil-provides-no-certainty-as-to-price.html

Current Events, Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink

Comments

Post a comment