If you are named the personal representative in a will, or if you are a beneficiary or creditor involved in a probate case, you may have concerns about what duties a personal representative has when selling assets of the probate estate. If you are a beneficiary, you want the personal representative to get the highest price possible so that you maximize your inheritance from the probate. For creditors, it is important that sales of assets of the estate that are not exempt generate enough funds to pay their claims. And for personal representatives, selling assets of the estate can generate stress because they want to make sure that all interested persons are satisfied with the process for the sale of the assets. In this post, we’ll go over the requirements for a personal representative to sell property of the estate and how hard the personal representative must try to get the highest price. Please note that this article, as any other article on our website, is not legal advice. If you are a personal representative consult with your attorney before taking any action to sell property of the estate. If you are an interested person, consult with your own attorney if you have concerns about the handling of the sale of property of the estate.
How is property of a Florida probate estate sold by the personal representative?
The first step for a personal representative to sell property of the estate is to review the powers of a personal representative. Under section 733.608(1)(a), Florida Statutes, all property of the estate is in the hands of the personal representative for the purpose “for the payment of devises, family allowance, elective share, estate and inheritance taxes, claims, charges, and expenses of administration and obligations of the decedent’s estate.” Further under section 733.612, Florida Statutes, the personal representative is empowered to make many decisions regarding the assets of the estate without the requirement of a court order. The powers relating to the sale of estate property under section 733.612 include:
- Acquire or dispose of an asset, excluding real property in this or another state, for cash or on credit at a public or private sale, and manage, develop, improve, exchange, partition, or change the character of an estate asset.
- Sell, mortgage, or lease any personal property (anything that isn’t land) of the estate for any interest in it for cash, credit, or for part cash or part credit, and with or without security for the unpaid balance.
- Satisfy and settle claims and distribute the estate as provided in this code.
A personal representative has the power under section 733.613, Florida Statutes to sell real property (land) of the estate. A personal representative may only sell real property of the estate when “it is for the best interest of the estate and for those interested in it that real property be sold.” A personal representative can sell the real property at a public or a private sale. In an probate where there is no will, the court must approve the sale of real property. In a case where there is a will and the will authorizes the personal representative to sell real property, the personal representative can sell the real property without court approval under section 733.613(2). As you can see, there are a variety of powers provided to a personal representative in Florida to sell property of the probate estate. This makes sense, because one of the main jobs of a personal representative is to make payments to creditors of the estate. The only way this can occur is if noncash assets of the estate are sold. Furthermore, when there are multiple beneficiaries of an estate, it may make sense for a personal representative to sell property of the estate in order to give the beneficiaries or heirs cash instead of a fractional ownership in a piece of property.
What is the standard for a personal representative to get the highest price when selling property of the estate?
Under section 733.602(1), Florida Statutes, “A personal representative is a fiduciary who shall observe the standards of care applicable to trustees.” The standard of care for a trustee in Florida, and also for a personal representative, is set out in a couple of sections of the Florida Statutes and under Florida case law. Under section 736.0801, Florida Statutes, “Upon acceptance of a trusteeship, the trustee shall administer the trust in good faith, in accordance with the terms and purposes and the interests of the beneficiaries, and in accordance with this code.” Additionally, under section 736.0804, Florida Statutes, “A trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.” The case law in Florida clarifies and expands on the personal representative’s duty to obtain a good price for sales of property of the estate. In a case where a personal representative is selling property of the estate under the authority granted in a will, the court may consider “the adequacy of consideration, whether or not the transaction was made in good faith, whether the transaction will benefit one or more beneficiaries to the detriment of others and whether or not there is fraud involved.” In re Granger, 318 So. 2d 509, 510 (Fla. 1st DCA 1975). According to the statutes set out above, there is no requirement that a court assess whether a sale of estate property is actually required when the will provides the power to sell property to the personal representative. Id. In a case where there is no will, the personal representative is required to get court approval of the sale and show that the sale is necessary for the payment of creditors or for the distribution to the beneficiaries or heirs of the estate. In the case Baker v. Vidoli, 751 So. 2d 608, 610 (Fla. 2nd DCA 1999), the beneficiaries of the estate argued that a personal representative improperly sold securities and should have waited to sell the securities because the value would have increased. However, the court disagreed. The personal representative was empowered to sell the securities by the will and by section 733.612, Florida Statutes. Furthermore, the court stated “To require a personal representative to accurately predict the rise and fall of the stock market would constitute an unrealistic burden and could foreseeably result in litigation in nearly every estate in which marketable securities are an estate asset.” Id. As you can see from these two cases, the burden on a personal representative to sell property of the estate for a good price is relatively simple, given that the personal representative is granted the authority to sell the estate property. If a personal representative acts in good faith to sell the property close to to the market value and is otherwise empowered to sell the property under the will or Florida Statutes, the Florida probate court will likely support the decision to sell the property.
Contact us today to schedule a free consultation.
If you are an heir to a decedent that passed away without a will or are named as a personal representative in a probate case, contact us today to schedule a free consultation. We will be able to review the facts of the probate and give you an idea of the time and cost. Also, if property of the estate will need to be sold, our attorneys can discuss with you the options available for selling the property. Selling property of the estate is not something to be stressed about and our attorneys strive to make the situation as low stress as reasonably possible.