Ethics of bidding on family item at auction

[slightlyrounded]

I’ve had a bit of a situation come up and need some advice. My grandfather recently passed away and left the estate a considerable high end book collection. Most of these books have now been liquidated but a couple of the very high end books are being put up for auction. Because there are several family members that stand to benefit from the proceeds I didn’t want to approach my family with an offer. But I am in a financial position to purchase at least one of these items for sentimental reasons.

Does anything preclude me from bidding ethically speaking? Are there any steps I should take prior?

Thanks in advance!

[butchie_t]

The following is just my opinion. I am not a lawyer.


First off, approach the executor with the lawyer present and discuss your intentions.

Be up front with them and tell them of your intentions. Ask the group if they would consider a purchase. Don’t take any of the estate proceeds from the sale.

Most all be open and honest.

Regards,

Butch

[SteveS]

First of all, my deepest condolences on the loss of your grandfather.

As for the auction, are you someone who would receive any benefit from the estate as a result of the auction proceeds? If not, there shouldn't be any conflict. You're in the same position as any other bidder. However, it's a delicate situation nonetheless. Perhaps there's a way you can explain it to the other family members and purchase it for a fair price before the auction and have that item pulled, if it's not too late.

[oldjudge]

Explain the situation to the auction house and ask them if they have an issue with you bidding. My guess is that they will not have one if in fact you are trying to win the lot.

[JustinD]

If you are a member of the estate trust that consigned it, then I would follow the previous info.

If not, you are not obligated to talk to anyone as you are not the consignor and I think you should bid away. I don't see a conflict personally bidding on something you want if you are not benefiting from the sale.

[boysblue]

I attended a live auction many years back and a desirable sports card was about to be auctioned. Prior to the start of the bidding, the auctioneer told the crowd that he wanted to own the card and planned to bid on it. He asked if anybody had issue with that. Nobody did. He ended up going back-and-forth with another bidder, simply pointing to himself when it was his turn to bid. In the end he won the card and many in the auction hall applauded, perhaps partly because of his transparency and honesty.

Good luck in acquiring the book.

[Aquarian Sports Cards]

If you are bidding with an honest intent to win those items it's often the easiest way to do things rather than trying to make an accommodation with the estate.

Any bidder who is trying to win something for the purpose of possessing it is acting ethically.

It's actually a common occurrence in estate situations, that and multiple people wanting the same heirloom. In auction school the instructors almost drool when describing the times they had multiple family members fighting over the same item of high sentimental but low retail value.

[bnorth]

Originally Posted by Aquarian Sports Cards

If you are bidding with an honest intent to win those items it's often the easiest way to do things rather than trying to make an accommodation with the estate.

Any bidder who is trying to win something for the purpose of possessing it is acting ethically.

It's actually a common occurrence in estate situations, that and multiple people wanting the same heirloom. In auction school the instructors almost drool when describing the times they had multiple family members fighting over the same item of high sentimental but low retail value.

Bid away and hopefully you win the item you want.

[Mark17]

Originally Posted by bnorth

Bid away and hopefully you win the item you want.

I wouldn't complicate things by talking to the auctioneer, etc. Just bid. As Scott says, any bid you make benefits the estate, so there is no conflict of interest. You are helping the estate by making sure it sells for a higher price than if you weren't bidding. Where's the downside or conflict of interest in that?

[NiceDocter]

No matter what you do, be prepared to get called all sorts of nasty names and have years of acrimony with members of your family. This is the reality of estate settlements more often than not. Im just saying be ready to be sadly surprised at some poeples behavior. I hope Im wrong but Ive seen it go down the drain so often based on I dont know what..... hidden resentments, unresolved sibling rivalries, greed, grief and misplaced anger over the death. The advice to be transparent and honest is good ..... my best wishes to your family in this transitional and trying time. I pray Im totally wrong and it all goes smoothly..... and my condolences on your grandfather.

[FrankWakefield]

Aaron, are you an executor or administrator for the estate? If so, I think you will want to disclose that you're wanting to bid, and let the attorney for the estate and the auction house know.

Was there some restriction in the testamentary documents that directs a public auction and that beneficiaries are not allowed to participate in the public auction? If so, that might put you in a quandary if you are a named beneficiary but you relinquish that position if you bid in the public auction. (This seems an unlikely scenario, but you should look at the testamentary documents.)

Truth is, the family members and estate are all better off if you are bidding, as you increase the sales price for everyone. You could welcome other family members to bid.

I actually think that a testator would have wanted family members to participate in such an auction, it would validate the testator's collecting practices.

[Peter_Spaeth]

Originally Posted by NiceDocter

No matter what you do, be prepared to get called all sorts of nasty names and have years of acrimony with members of your family. This is the reality of estate settlements more often than not. Im just saying be ready to be sadly surprised at some poeples behavior. I hope Im wrong but Ive seen it go down the drain so often based on I dont know what..... hidden resentments, unresolved sibling rivalries, greed, grief and misplaced anger over the death. The advice to be transparent and honest is good ..... my best wishes to your family in this transitional and trying time. I pray Im totally wrong and it all goes smoothly..... and my condolences on your grandfather.

Most human drama revolves around families. Just look at how much great literature is devoted to that.

[parkplace33]

My only concern would be if you did win the book, but it went below what the family was expecting (price wise). There could be some hard feelings there.

Maybe ask if they will sell it to you directly?

[slightlyrounded]

Wow - really appreciate all the responses and fodder here guys. Realize I probably should have provided a little more context:

• My grandfather is survived by his wife so technically the estate is transferring over to her. She is liquidating his collection and I believe plans to distribute the funds to her children and grandchildren (of which I am one) but I have no idea about the equity intentions.
  
• I didn't really want to approach her with interest because I felt the worst case scenario was she'd offer to give me the item(s) which would likely be poorly received by the rest of the family. Under a best case scenario I could have agreed to a market value but even then I'm not sure how all involved would have felt. I also didn't really want to broadcast my personal finances since my family's situations are pretty disparate right now.

The general consensus I'm getting is its probably okay to be bidding on these items without guilt, and I may or may not need to tell the auction house depending on their rules.

Finally - thank you for the condolences....we all lost a helluvah man but at 91 it was a great run and I appreciate the ample time I had with him.

[timzcardz]

Originally Posted by parkplace33

My only concern would be if you did win the book, but it went below what the family was expecting (price wise). There could be some hard feelings there.

Maybe ask if they will sell it to you directly?

Hard feelings?

If that turned out to be the case I would call them irrational feelings.

If it went for less than what the family expected, then they should be thankful you bid or it would have gone from even less.

But then again, I don't often hear the word rational in conjunction with family!

Whatever you decide, good luck and best wishes with the auction and/or family!

[Rhotchkiss]

If it is being auctioned by an independent third party and you are bidding genuinely to win it, I see no ethical reason for you not to bid, and bid to win. Indeed, your participation likely results in maximized value for the family members who will benefit from the proceeds.

[Lorewalker]

If your intentions are pure, which it appears they are, I see nothing wrong with it. Last thing you need is to make an offer to the family and have it turn out to have been too low. Buying it on the open market relieves you of that burden.

[Leon]

Originally Posted by Rhotchkiss

If it is being auctioned by an independent third party and you are bidding genuinely to win it, I see no ethical reason for you not to bid, and bid to win. Indeed, your participation likely results in maximized value for the family members who will benefit from the proceeds.

+1. I see no issue either...
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