A personal representative of an estate has several important duties to uphold when administering an estate. If the deceased party owned real estate, selling their home may be one of the most significant transactions required during the probate process.
In Ontario, personal representatives, also known as estate trustees, must obtain a Certificate of Appointment of Estate Trustee to have the legal authority to manage and dispose of estate assets, including real estate. Those with this authority must keep three considerations below in mind before and during that process.
To sell or to buy?
When a testator has multiple family members who can inherit from their estate, they may not want to leave their home to just one party. Selling the house and letting everyone enjoy a share of its value is a reasonable solution.
However, they may hope one of their family members decides to buy the property. Testators may integrate clauses extending the right of first refusal to specific parties when their estate plan includes provisions to sell their home. The representative may have to offer an opportunity to purchase the home for its fair market value before listing it on the open market.
Securing the home is an important step
Vacant properties are at risk of criminal activity. Someone might break in to vandalize a home or use it for temporary shelter. Family members might even try to gain access to steal certain property from the home.
Accessing a property, securing valuables and protecting it against unwanted incursions is vital for those selling real estate. They need to keep a home clean and safe to obtain the best price for the property.
Optimizing sale price is crucial
The personal representative of an estate has a fiduciary duty to act in the best interests of the beneficiaries, which includes maximizing the value of estate assets. When selling estate resources, it is therefore important to try to secure the highest sale price possible. Decisions that deprive beneficiaries of home value might lead to attempts to prevent the transaction or remove the representative from their position.
Preparing to sell a home during probate proceedings is a challenging undertaking. Personal representatives who have support throughout the process are less likely to make mistakes that can lead to probate complications.