Beneficiaries or heirs receiving property from an estate rely on the choices made by the executor or personal representative. The person administering the estate must secure and manage estate resources. They may use resources to repay creditors and cover certain expenses, such as taxes, before they make distributions.
In some cases, estate administration requires the liquidation of resources. If the executor appears to have accepted an unreasonably low sale price for major resources, beneficiaries may need to ask the courts to help.
Sales could diminish the estate’s value
Selling a business, vehicle or piece of real property for less than the fair market value ultimately diminishes what beneficiaries receive from the estate. A personal representative or executor has a fiduciary duty to the estate. They should make reasonable attempts to determine what assets are worth and to sell them for a price close to that value.
It is common for items to sell for below fair market value at an estate sale. Such transactions may not require intervention by a judge. However, selling major assets for substantially less than they are worth could represent a breach of fiduciary duty.
Judges can potentially issue injunctions in response to pending probate litigation. They can prevent the sale of resources while reviewing the situation.
They might ultimately replace the executor with someone better suited to the role. In other cases where sales have already occurred, the courts can potentially hold executors responsible for the financial impact of their misconduct or incompetence.
Reviewing proposed resource sales can help beneficiaries and heirs assert their rights. Probate litigation can prevent sales that diminish what people inherit or demand accountability from fiduciaries who don’t uphold their duty.