As the executor or administrator of an estate, you will often have to make decisions that beneficiaries or heirs may find questionable. Depending on the instructions left behind by the deceased, you may have to liquidate assets that certain family members or loved ones of the deceased might have an interest in maintaining.
In some cases, people might challenge your decision to sell an asset, even using that action as grounds to challenge you as the executor. There are several steps that you can take in order to protect yourself from allegations of improper management of the estate related to the sale of real estate.
Have some documentation regarding the fair market value for the asset
As executor, your role involves both following the instructions left behind by the testator and acting in the best interests of the estate and its beneficiaries. If the executor ordered you to liquidate or sell certain assets and then divide the proceeds among their heirs, you need to do so in a manner that is as beneficial as possible to the estate.
Typically, that means you want to get a reasonable, competitive price, especially for major assets like real estate. Having a professional come out and provide an estimated fair market value for the property is a good way to demonstrate that the price you accepted or sold the property for was reasonable. In some cases, getting a second opinion can protect you from allegations of insider dealing with the real estate professional or others involved in the transaction.
Keep the family members involved in the process prior to the sale
Getting a home ready for sale on the open real estate market often involves a lot of work. There can be surprise defects that nobody recognized until an inspector or another professional comes through to review the property. Sometimes, what people expect a property to be worth will be significantly different than the actual price the property can command.
Making sure that all the beneficiaries of the estate know about issues as they arise with the property, such as the need to replace the roof, will help ensure that they better understand the price that you accept and the amount of money it takes to get the property ready for market. Transparency can go a long way toward helping people feel included and empowered.
On the other hand, not providing them with information can make them feel like you might have something to hide. Although it can add to the already burdensome work associated with estate administration, routinely updating everyone on the process as it relates to the larger assets from the estate can help protect you from challenges or show that you behaved in good faith if someone challenges you.