The ability of a beneficiary to stop the sale of an inherited property largely depends on the specifics of the estate, the local laws, and the terms of the will or trust, if any.
The most important thing to understand about beneficiaries and their potential to stop the sale of an inherited property is that their power to do so is largely dependent on the specifics of the inheritance structure and local law. The type of inheritance (whether it’s through a will, trust, or intestate succession), the number of beneficiaries, and the terms stipulated in the will or trust are all key factors.
In cases where there are multiple beneficiaries, consensus is often needed for major decisions such as selling the property. If one beneficiary disagrees with the sale, they may have the ability to halt it, causing potential legal disputes and delays.
In addition, if the estate is in probate, the executor or administrator has a fiduciary duty to act in the best interest of all beneficiaries. If a beneficiary feels the sale of the property contravenes their best interests, they might be able to challenge the decision in court. However, the court typically gives considerable weight to the executor’s or administrator’s decisions unless it’s proven they’re acting in bad faith or against the estate’s interests.
Ultimately, navigating the sale of an inherited property can be complex, particularly when multiple beneficiaries are involved. As such, consulting with a qualified estate attorney is strongly recommended to understand all the potential legal nuances and ensure the interests of all parties are properly addressed.
Understanding Different Beneficiary Relationships And Their Power Over Estate Decisions
Here are a few general scenarios which could occur during an inheritance:
Sole Beneficiary: If the beneficiary is the only one named in the will or trust for that specific property, they generally have control over the property, including the decision to sell it.
Multiple Beneficiaries: Things can get complicated when there are multiple beneficiaries. In many cases, all beneficiaries must agree to the sale of the property. If one beneficiary doesn’t agree, they could potentially halt the sale.
The Estate is in Probate: If the estate is in probate, the executor or administrator of the estate (often appointed in the will or by the court) has the authority to manage the estate’s assets, which could include selling property. However, they are usually expected to act in the best interest of all beneficiaries. If a beneficiary feels the sale isn’t in their best interest, they could potentially challenge it in court, but the success of such a challenge varies on a case-by-case basis.
Trusts: In the case of a trust, the trustee usually has the authority to manage the assets, including the ability to sell the property. However, this is dependent on the terms of the trust.
Life Estates: In certain cases, a property might be subject to a “life estate,” where one person has the right to live in the property during their lifetime, but the property will pass to someone else after their death. The person with the life estate generally cannot sell the property without the consent of the remaindermen (those who will inherit after their death).
The Beneficiary And Their Role
The beneficiary has an easy role, they collect the assets that have been left to them by the deceased. They do not have any other responsibilities to contend with. Many of us have witnessed those situations in which the beneficiary is unhappy with their lack of involvement and opinions about what should happen with some assets. Ultimately, the courts uphold what has been determined in the will and ensure that the executor is doing their job. However, sometimes the courts find that the executor of the estate isn’t doing the right thing.
The Executor And Their Role
An executor of an estate is responsible for making sure that the wishes of the deceased are fulfilled. These wishes are in the will and are supposed to be followed exactly as planned. Their responsibilities include:
- Offer the will to probate
- Pay off all debts and taxes from the estate
- Distribute assets to the beneficiaries
- Protects the assets of the will
When The Executor Doesn’t Follow Their Responsibilities
It all sounds cut and dry, right? Well, there is always a loophole somewhere and there is here too. It is understood that the executor of an estate will follow probate laws and act in good faith of the will. If there is to be the sale of property, it must be done in a way that shows it’s not for personal gain and benefits the beneficiaries. A sale of the property at market value to pay off debt and taxes is an act of good faith.
However, not every executor does this. A quick sale of property well below market value can be seen as an adverse action. Any sale of property below market value that benefits the executor is also questionable. This is where a beneficiary could stop the sale of a property. It requires court intervention and the beneficiary will have to pay for the legal battle.
Probate Laws By State
Selling Inherited Property FAQs
Yes, siblings are able to force the sale of inherited property with the help of a partition action. If you don’t want to hold on to an inheritance given to you by parents, you might want to sell.
Consider An Inheritance Buy Out
Buying out a sibling’s share in inherited property is one way to circumvent disagreements that may arise and potentially stop a property sale. In this situation, the sibling living in or wishing to keep the property negotiates a fair buyout price, often corresponding to the sibling’s share of the appraised market value of the property.
Securing funds for the buyout may involve personal savings, a conventional loan, or siblings estate loans. This process facilitates a smooth transfer of property between siblings, eliminates potential contention, and ensures all parties receive their fair share of the inheritance.
However, each case is unique and depends on the specifics of the estate and local laws. Therefore, it is essential to consult with a legal or financial professional when attempting a sibling buyout to ensure it is conducted fairly and legally.
Watching the sale of a property can be painful and if you are considering contesting a sale, we can help. Getting an advance on your inheritance can help you fund the court battle you will face. Contact us today to learn more about how we can assist you.