Executor wants to buy property

gabbo is coming

Hi

Can someone let me know if the executor of a will can simply pay the valuation price of a property at time of death and buy it, irrespective of the current value? What if the current value if significantly higher?

Do the beneficiaries have a right to contest the transfer / sale?

Trampas

What does the will say ?

id suggest getting 3 valuations

Peregrinus

The executor's job is to distribute the estate to the beneficiaries. For that purpose he has powers to manage the estate and he can sell estate property and distribute the sale proceeds, instead of distributing the estate property directly to the beneficiaries. But he must exercise these powers solely in the best interests of the beneficiaries, disregarding his own interest. If, as is commonly the case, the executor is also a beneficiary, then he is entitled to consider his own interests as a beneficiary, but he must not attach greater weight to his interests than he does to the interests of other beneficiaries. He cannot exercise his powers as executor so as to secure an advantage for himself; only so as to benefit the beneficiaries. And he should not put himself in a position where his duty as executor conflicts with his personal interest.

Which means that, if he sells the property, he must do so for the benefit of the beneficiaries. Selling below its current market value is clearly contrary to the interests of the beneficiaries; therefore he should not sell to anyone at below current open market value, never mind to himself. If he sells to himself, he should do so in the most transparent way possible, and in a way that demonstrates that he has paid full open market value - e.g. he can sell the house through public auction, instructing someone to bid on his behalf.

If all of the beneficiaries with an interests in the matter are adults, and fully legally competent, and they all agree, with full information and the benefit of independent advice, to the executor embarking on a particular course of action, then the executor can safely do that. So that's the course I would encourage an executor to take, if he wants to buy property from the estate. This isn't always possible (e.g. if one of the beneficiaries is under 18); in that case the executor should not go ahead unless he can prove beyond any doubt that he acted solely in the best interests of the beneficiaries.