An inheritance isn’t official until someone actually receives assets from the estate of a loved one. Technically, beneficiaries of an estate won’t receive anything until the executor settles accounts and files appropriate paperwork with the probate court. Such claims take precedence over the right of heirs and beneficiaries, in most cases.
However, beneficiaries often have expectations based on what they know estate resources are worth and the terms included in estate planning documents. Numerous details, including the misconduct or incompetence of the executor, could diminish how much the beneficiaries of the estate ultimately receive.
Real estate holdings are often the most property included in many estates. It can be extremely stressful to watch someone mismanage and potentially endanger an asset worth hundreds of thousands of dollars. Can beneficiaries prevent an executor from selling real estate for too little?
There needs to be a provable loss
In theory, family members of the deceased and beneficiaries of an estate can ask the courts to prevent certain transactions during estate administration. They can also seek the removal of an executor who has proven incapable of performing their duties appropriately. In a scenario involving the sale of real property, beneficiaries would likely need documentation affirming what the property is worth.
An appraisal or price estimate created by a real estate professional could serve as key evidence for validating the claim that the executor wants to sell the property for far less than it is worth. Especially when it is a deal benefiting someone who knows the executor or who is the beneficiary of the estate, a low sale price could lead to the cancellation of the transaction.
Executors have a duty to the beneficiaries of an estate
People can remove an executor for violating their fiduciary duty to the people who should receive assets from the estate. Although there are many opportunities for profit during estate administration, executors should do what is best for those who will benefit from the estate. They should seek to protect the assets in the estate and maximize their value. That includes making smart choices about the sale of the most valuable estate assets.
Recognizing when it may be necessary to challenge the actions of an executor or remove them from their position can benefit those who are expecting to inherit from an estate. When it isn’t clear whether or not assets are being mismanaged, it can help to seek legal guidance.