Administering an estate and overseeing probate proceedings can lead to many legal and personal challenges. Estate administration can overextend a busy professional and possibly damage their relationships with estate beneficiaries if they need to make difficult decisions or carry out wishes that upset the beneficiaries.
Certain common requirements, such as liquidating estate assets, are likely to trigger conflict. Personal representatives administering an estate need to be aware of the three concerns below if the probate process requires the liquidation of estate resources.
1. Obtaining a fair value
A personal representative has a fiduciary duty to the beneficiaries of an estate. When selling resources, they should try to obtain a fair market value, especially for the most valuable assets owned by the estate. Undervaluing assets can lead to claims of self-dealing or other breaches of fiduciary duty.
2. Providing notice
In some cases, the estate plan may extend the right of first refusal to specific beneficiaries. They may require an opportunity to purchase the assets before they are made available to the general public for sale. Providing advance notice of an upcoming sale helps ensure that beneficiaries can assert the right of first refusal.
3. Protecting specific resources
Asset liquidation can provide capital to pay creditors and pay probate costs. However, personal representatives may need to identify assets specifically earmarked for beneficiaries and avoid selling those resources if at all possible.
Whether preparing to sell a person’s home or oversee an estate sale, a personal representative may need legal protection to minimize their exposure and chances of litigation. Having an attorney’s guidance takes much of the risk out of asset liquidation and other potentially contentious aspects of estate administration.