Owning a home is the American dream, which means that a house is often the most financially valuable component of an individual’s personal legacy. Those who have worked hard to become property owners instead of renters may want to pass some of that financial stability on to the next generation.
Sometimes, individuals leave their homes to a specific family member. Other times, what they want is to share the value of the home with all of their beneficiaries. Ordering the sale of real property in a will or as part of the trust administration process is quite commonplace. There are two special considerations that those who are tasked with trust or estate administration should keep in mind when handling real property during probate proceedings.
1. They must uphold promises to beneficiaries or tenants
No matter how competitive the market becomes, the executor of the estate or trustee will still need to abide by the specific term set by the executor. If they intend to sell the property, they have to respect special clauses included in the will itself or in a rental agreement with a tenant or roommate.
Some property owners choose to give certain beneficiaries or tenants the right of first refusal before the property goes on the market for sale. Those extended the right to make an offer before public listing should have the opportunity to buy the property before it sells to someone else.
2. They must do their best to maximize the returns on the sale
The executor or trustee has a fiduciary duty to the beneficiaries who will inherit the property that they manage or the resources generated by their sale. Even if they sell to someone with the right of first refusal, that party should offer fair market value for the property.
Validating what the property is worth, taking steps to increase its fair market value and cooperating with competent professionals rather than family members who just got their real estate license are all actions that will help an executor or trustee uphold their fiduciary duty while selling real property as part of the estate or trust administration process.
Learning more about the unique challenges that apply to the most valuable assets in an estate, like real estate holdings, can benefit those who are hoping to sell real property either prior to their own death or as part of an estate administration process. Seeking legal guidance is generally a good idea in either scenario, as this area of the law is complex.