Trustees and personal representatives take on many responsibilities. They have to communicate with beneficiaries or heirs. They also need to properly manage the assets in the estate or trust.
In some cases, their role may require that they sell trust or estate resources. Doing so could lead to complaints about their choices and even litigation attempting to remove the fiduciary from their role. Personal representatives and trustees have a fiduciary duty to beneficiaries or heirs. They must consistently act in their best interests. The sale of estate or trust resources could raise questions about their suitability for their role.
Undervaluing resources could lead to complications
Selling assets is common during estate administration. People often leave instructions for their personal representatives to divide the value of their property among their selected beneficiaries or to hold an estate sale. Trustees may also need to sell trust resources to make distributions to beneficiaries.
In either scenario, a fiduciary typically needs to ensure that they obtain the fair market value for the assets that they sell. Especially if they sell them to a beneficiary or to someone with whom they have a pre-existing relationship, others might scrutinize the price and question the motives of the trustee or personal representative. They could face allegations of misconduct or even responsibility for diminishing the value of the estate or trust by undervaluing key resources.
Those intending to liquidate particularly high-value assets, including real property or vehicles, need to be particularly cautious about ensuring that they understand what those assets are worth. Securing a fair price for estate resources can protect personal representatives during estate administration.