It is difficult for older adults to properly address real estate in their estate plans. Although the homes where they live may be among their most valuable property, the sentimental value of the home may lead to someone’s desire for loved ones to live there rather than to merely access the wealth it represents.
In some families, a testator will know ahead of time that there may be one beneficiary who would like to inherit the home where they live. They may extend the right of first refusal to specific beneficiaries whom they believe might want to buy their home as a result of this knowledge. What happens if a family member is not allowed to make use of their right of first refusal?
They can take their case to court
Maybe the executor had a personal relationship with someone who wanted to buy the property. Perhaps they simply insisted they could get a higher value for it on the open market. Whatever the reason, the executor of the estate may have listed the property for sale and even entered into a contract for its purchase.
The beneficiary of the estate with the right of first refusal could potentially ask the courts to intervene. In some cases, they could have the executor removed and replaced with someone else. Other times, they could prevent the sale of the real property so that they can purchase it themselves.
Of course, the beneficiary-turned-buyer will need to pay roughly what the property is worth. Any prospective buyer purchasing real property from an estate will need to offer an appropriate amount based on the property’s current fair market value. Executors could defend against claims by showing that the offer made was unreasonably low.
Probate litigation can help to protect someone’s inheritance
Waiting too long to push back against misconduct by an executor could potentially deprive someone of their inheritance. Testators who wanted to give someone an opportunity to buy a property would likely feel disappointed to learn that a stranger purchased the home instead.
Recognizing when it may be time to pursue estate litigation can potentially benefit those who are worried about the questionable behavior of an executor.