Wed | Oct 18, 2017

Oran Hall | Selling estate property without executor's knowledge

Published:Sunday | September 24, 2017 | 12:00 AM

QUESTION: I was left as an executor for a piece of land with a dwelling house and a bakery on it. Can it be sold without my knowledge? If not, what can I do about it?

Beverley

 

FINANCIAL ADVISER: The personal representatives of an estate are those persons who, by law, undertake the duties and obligations of administering the estate of the deceased.

Where there is a valid will, the personal representative is known as the executor. The personal representative is known as the administrator where there is no will at all or there is no valid will.

The executor's primary functions are to prove the validity of the will in a court of law by applying for the grant of probate of the estate, which the court grants after it examines and verifies that the will was prepared in accordance with the Wills Act, and to satisfactorily carry out the wishes of the deceased person, as stated in the last will and testament.

In administering the estate, the executor, and administrator in the case of intestacy, generally collects, preserves, realises, and distributes the income and assets of the estate.

As executor, you are required to collect and preserve the assets of the deceased by taking possession of, or assuming control over the assets as soon as you are properly able to do so. This means you should, among other things, gather and keep safely the deceased's documents and property such as the original will, bank books or statements, titles to land and motor vehicles, as well as keys to real property, motor vehicles, and safety deposit boxes.

You have an ongoing duty to ensure the estate assets are preserved until you can realise and distribute them or the proceeds to the creditors of the deceased and, thereafter, to the beneficiaries of the estate.

You are required to ensure that the estate assets are secured from theft; as best as the estate can afford, take reasonable steps to avoid loss to the estate; and ensure that the assets do not fall into disrepair.

You should ensure that the debts of the deceased are paid and collect money owed to the deceased at the time of death. You should seek to get the best price for assets by getting a proper valuation and advertise assets to get the best possible market exposure. And it would be useful to engage the services of professionals where appropriate.

You will be able to distribute the assets of the estate according to the terms of the will after the court has given you the requisite grant of representation after all debts expenses, undischarged mortgages, outstanding loans, government fees and taxes have been liquidated, and if the estate has more assets than liabilities.

There are several actions that you should take to fulfil your responsibilities. They include instructing an attorney at law to apply to the court for a grant of representation in the names of the personal representatives, valuing the assets of the estate to ensure accurate accounting and computing of the government taxes and fees likely to be imposed on the estate and to protect against claims for loss of value of the estate.

You should also contact the beneficiaries and creditors and consistently update them on the progress of the administration of the estate. Contact as well the holders of the assets of the estate, such as financial institutions, to advise them of the passing of the deceased and request that the balances left in those accounts be transferred to an estate account, or for them to be held and preserved pending the grant of representation.

Additionally, you should settle government taxes and fees payable by the estate transfer tax payable on death, stamp duty, for example, and settle any liabilities the deceased had with creditors; and distribute the remaining assets to the beneficiaries.

Be sure to account to the beneficiaries and the creditors of the estate through the courts by filing the accounts of your administration of the estate.

You have not said much whether the application for probate has been made, and if so, whether it has been granted. Neither have you mentioned the circumstances in which the property might have been sold.

It also seems that you are not the only executor because you stated that you are "an executor". In normal circumstances, if there are others, they would also have to be involved in administering the estate.

In any event, it is the executors who have the right and duty to sell the property of the estate. Are we, therefore, looking at a situation in which somebody has committed a fraud against the estate?

You need to consult a lawyer promptly to determine that question.

- Oran A. Hall, principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel. Email finviser.jm@gmail.com.