If an executor is not communicating with beneficiaries, it can lead to trouble. An executor owes the beneficiaries of the estate they are administering a “fiduciary duty.” This means that the executor must exercise reasonable care and act in the best interests of those beneficiaries.
As part of that fiduciary duty, an executor has a responsibility to keep beneficiaries reasonably informed about the administration of the estate. This does not mean that the executor must communicate every decision they make or every action they take.
However, executors generally must provide beneficiaries with enough information to understand the nature of the assets of the estate, the debts the estate owes, and how the property will be distributed. This information will typically be provided through an inventory and appraisal of the estate’s assets, updated appraisals, probate referee appraisals, and accountings that are usually filed when an estate is prepared to distribute and close. That all being said, the executor can always provide more information more frequently.
If the executor of an estate fails to keep the beneficiaries reasonably informed about the will’s administration, or if they have evidence the executor is engaging in misconduct or mismanagement, they have the right to petition the probate court for executor suspension or executor removal.
Can an Executor Sell Real Estate or Property?
Yes, an executor can sell real estate or property in most instances.
Under California Probate Code 10000, the personal representative may sell real or personal property of the estate in any of the following situations:
- Where the sale is necessary to pay debts, devises, family allowance, expenses of administration, or taxes.
- Where the sale is to the advantage of the estate and in the best interest of the interested persons.
- Where the property is directed by the will to be sold.
- Where authority is given in the will to sell the property.
However, even in these instances, there may be limitations on when an executor can sell property. For example, executors will often be able to sell the estate’s personal property without court or beneficiary approval, but only as long as they sell the property for at least 90% of the appraised value. And while an executor still might be able to sell property for less than 90% of the appraised value, if they do they are running the risk of being surcharged for the difference.
But on the other hand, an executor may need approval from the court and/or consent from the beneficiaries before they can sell real estate. It all depends on the level of authority granted to them by the will and any orders the probate court may have issued.
When the court has only granted an independent executor limited authority to act, they must obtain the court’s permission before selling real property. During this process, beneficiaries will have an opportunity to object if they believe that the proposed sale is unsuitable.
What Is a DE 165?
A DE 165 is a California probate form known as a “Notice of Proposed Action.” When a personal representative who has been granted authority to independently administer an estate wants to take certain actions, such as selling real estate, they must provide a DE 165 to every beneficiary whose interest in the estate would be affected by the proposed action at least 15 days before taking the action.
If one or more beneficiaries do not want the personal representative to take the action listed in the DE 165, they can submit a written objection to the executor. If the personal representative still wants to move forward with the proposed action, they will need to get approval from the probate court to do so.
In addition to returning the DE 165 to the personal representative, the disapproving beneficiary can also submit their objection to a Notice of Proposed Action with the probate court. Doing so will cause a hearing to be scheduled to determine whether or not the personal representative can take the action. The objecting beneficiary may also be able to obtain an order prohibiting the personal representative from taking the proposed action.
What Can Beneficiaries Do to Get Their Rightful Inheritance?
If a beneficiary disagrees with anything an executor is doing they can submit a written objection to the executor, and if the executor fails to respond and keep you informed you may have some of the evidence you need to have them suspended or removed.
If the executor has issued a Notice of Proposed Action – essentially telling you what they want to do and what will happen if you don’t object – you can object to the Notice of Proposed Action and the executor, in most instances, will seek court approval before acting. That time will allow you and the executor to work things out, and if you’re not able then you and the executor will be allowed to present your arguments to the court. The court will then decide whether or not to allow the executor to do what they propose – e.g. permit the sale.
If you are the beneficiary of an estate and you are concerned about the executor’s proposed actions or lack of communication, you should discuss your situation with a probate litigation attorney as soon as possible.
An experienced probate litigator can help you determine the best method to help you protect your inheritance. In some situations, you may only need to object to a Notice of Proposed Action. In some cases, having a probate lawyer may help open the lines of communication so you can make sure you’re well informed. However, in cases involving serious executor misconduct, your attorney may recommend that you petition to have the executor suspended or removed to ensure that your loved one’s legacy is protected and you receive your rightful inheritance.
Have questions? We’re happy to discuss.
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About RMO, LLP
RMO LLP serves clients in Los Angeles, Santa Monica, Ventura, Santa Barbara, San Francisco, Orange County, San Diego, Kansas City, Miami, and communities throughout California, Florida, Missouri, and Kansas. Our founder, Scott E. Rahn, has been named “Top 100 – Trust and Estate Litigation” by SuperLawyers, Trusts and Estates Litigator of the Year, and Best Lawyers in America for Litigation – Trusts and Estates. For a free consultation, call (424) 320-9444 or visit: https://rmolawyers.com.