The process of estate administration often involves numerous different obligations for the executor or personal representative of an estate. They must submit paperwork to the probate courts, attend hearings and eventually distribute assets to the selected beneficiaries named in the paperwork (or according to state law in the event that the deceased passed away without estate planning documents in place).
Occasionally, responsibilities will include handling major assets, like real property. Either the primary residence owned by a testator or investment properties that they purchased to resell or rent out may be among the most valuable assets in an estate. If someone’s instructions include the sale of real property, there will be three crucial tasks for the representative of the estate to complete.
Securing the property and its contents
Especially in scenarios where no one lives in the home after the testator passes or when the community is aware of their death, the property could end up targeted by criminals or teenagers. The value of vacant properties tends to drop very quickly because of the possibility of crime like vandalism. Therefore, it will be incumbent upon the executor of the estate to secure the property, possibly by changing the locks, and to secure and itemize the assets inside the property.
Establishing a fair market value
The beneficiaries of the estate will usually receive a portion of the sale price of the home. The duty of the executor will therefore be to get as much as they reasonably can for the property to maximize their inheritances. It may be necessary to hire an appraiser or cooperate with a real estate agent who can perform a market analysis to determine what the property is worth currently and how to maximize its resale value.
Honoring the first right of refusal
When a testator leaves instructions for the sale of real property, they may anticipate that their family members only want the property’s financial value, not necessarily not to actually own the land or home. However, if they believe that someone might want to purchase the property, they may extend the right of first refusal to one or even all of their beneficiaries. The executor of the estate will, therefore, need to communicate with family members so that they are aware of that option and the current fair market value for the property. They should not accept less than the fair market value from beneficiaries with the right of first refusal almost the testator provided instructions to the contrary.
Those who do not properly manage real estate may face the risk that the probate court will prevent the sale of the property or even remove them from their position. Understanding how to handle major assets during probate proceedings will make estate administration less challenging for the personal representative who is settling someone’s affairs. Seeking legal guidance can be very helpful as well.