When someone dies leaving a property, it is common for questions to arise about what should happen to it. One beneficiary may want the house sold as quickly as possible, while another may want to keep it in the family. In some cases, a beneficiary may even be living in the property and strongly oppose a sale.
This can leave families asking the question “can an executor decide to sell a house without the beneficiaries agreeing?”
In many cases, an executor has the legal authority to sell estate property without obtaining the agreement of every beneficiary. However, that does not mean an executor has unlimited discretion. They have legal duties when administering the estate and must act properly when deciding what happens to the deceased’s assets.
At AFG Law, our Private Client team advises executors and beneficiaries throughout the estate administration process, including where an estate contains residential property.
What is the Executor’s Role?
An executor is appointed under a Will to administer the estate of a deceased person. Their responsibilities can include identifying and valuing assets, establishing liabilities, dealing with Inheritance Tax, applying for probate where required, paying debts and ultimately distributing the remaining estate to the beneficiaries.
A house owned by the deceased may form part of the estate alongside savings, investments and other assets. The executor’s responsibility is to administer the estate according to the Will and the law, rather than simply following the wishes of whichever beneficiary is most vocal.
Does an Executor Have Authority to Sell a Property?
Executors generally have powers that enable them to deal with estate assets, including an authority to sell property where appropriate. However, the practical position can depend on the property’s ownership and the terms of the Will.
Where the deceased owned the property solely, it will usually need to be dealt with through the estate. The executor will commonly need to obtain the appropriate Grant of Representation before a sale can be completed. Where an executor obtains a Grant of Probate, this confirms their authority to administer the estate under the Will.
Different considerations apply where the deceased owned a property jointly with someone else. How the property was jointly owned can determine whether the deceased’s interest passes through the estate at all.
Do the Beneficiaries Have to Agree to the Sale?
Not necessarily; an executor does not usually need every beneficiary’s permission simply to sell the property as part of properly administering an estate.
This can sometimes be misunderstood by beneficiaries. Being entitled to receive money or assets from an estate does not necessarily mean having decision-making authority over each individual asset during the administration.
For example, three children might inherit their parent’s residuary estate equally. That does not necessarily mean all three must approve a proposed property sale before the executor can proceed.
The executor is responsible for administering the estate and must act in the best interests of the estate and its beneficiaries as a whole.
What If the Will Leaves the House to a Particular Person?
This can change the position significantly. There is an important difference between a beneficiary receiving a percentage of the overall estate and the Will specifically leaving a particular property to them.
If the Will states that a particular house should pass to a named beneficiary, the executor cannot simply disregard those terms because selling it would be more convenient. The property may instead need to be transferred to the beneficiary, subject to issues such as estate debts, tax liabilities and the precise wording of the Will.
For this reason, the Will should always be reviewed carefully before decisions are made about a property.
Why Might an Executor Need to Sell a House?
There are many legitimate reasons an executor may decide to sell a house. The estate may need cash to pay outstanding debts, tax, administration expenses or other liabilities. Alternatively, the Will may divide the residuary estate between several beneficiaries, making a sale the most practical way of distributing their respective shares.
A sale may also be appropriate where none of the beneficiaries wants to take ownership of the property. Once completed, the sale proceeds become part of the estate and can be used to meet liabilities before the remaining estate is distributed according to the Will.
Does the Executor Have to Achieve the Best Possible Price?
An executor has a duty to act responsibly when dealing with estate assets. This means they should take reasonable steps to obtain a proper market value rather than selling the property cheaply simply to achieve a quick sale or benefit a particular person.
Obtaining professional valuations and marketing the property through an estate agent may help demonstrate that reasonable steps were taken to achieve an appropriate sale price.
The value of the property at the date of sale may, of course, be different from its probate value.
The property’s value at the date of death is relevant for estate and tax purposes, while the eventual sale price reflects what is achieved when the property is actually sold. The difference can also have tax implications, so executors may need appropriate legal, valuation and tax advice.
Can an Executor Sell the Property to Themselves or a Family Member?
This requires particular care. Executors must avoid conflicts between their personal interests and their duties to the estate. A proposed sale to an executor, another beneficiary or a family member can therefore require additional scrutiny.
An executor should not use their position to obtain estate property at an artificially low price. Independent valuation and legal advice can be particularly important in these circumstances. An executor who mishandles estate assets could potentially face personal liability for losses caused to the estate.
What If a Beneficiary Wants to Buy the House?
Sometimes a beneficiary does not object to a sale in principle but wants to keep the property themselves. It may be possible for a beneficiary to purchase the property or for its value to be taken into account as part of their entitlement under the estate, depending on the circumstances.
For example, if two siblings are due to inherit the estate equally and one wants the house, arrangements might potentially be made for that sibling to receive the property as part of their inheritance while accounting to the estate for any additional value required.
This needs to be structured correctly, particularly where there are several beneficiaries, tax considerations or insufficient other assets to balance the respective entitlements.
What If a Beneficiary Refuses to Leave the Property?
The situation can become more complicated if a beneficiary or another person is already living in the deceased’s home. Their occupation does not necessarily prevent the executor from having authority to sell, but the executor should not simply assume they can remove the occupier immediately.
The person’s legal status, the terms of the Will and the circumstances surrounding their occupation need to be considered. If disagreement arises, obtaining legal advice early may help prevent the situation developing into a more serious estate dispute.
Can Beneficiaries Challenge an Executor’s Decision?
Beneficiaries cannot usually dictate every decision an executor makes, but they are not without protection.
If there are genuine concerns that an executor is failing to administer the estate properly, selling assets at an undervalue, favouring themselves or another beneficiary, or otherwise breaching their duties, legal action may potentially be considered.
There is an important distinction between disagreeing with a sensible administrative decision and alleging that an executor has breached their duties.
For example, a beneficiary simply wanting a higher sale price does not necessarily mean the executor has acted improperly. Evidence that the executor deliberately accepted a substantially undervalued offer for an improper reason could be much more significant.
What Happens After the Property is Sold?
After completion, the money received will normally form part of the estate. The executor should not necessarily distribute the money immediately.
They must first ensure that the estate’s liabilities have been dealt with. These could include funeral expenses, outstanding debts, Inheritance Tax, administration expenses and other tax liabilities.
Once the estate is ready for distribution, the remaining funds can be paid to the beneficiaries in accordance with the Will.
Should Executors Consult Beneficiaries Anyway?
Although formal consent may not always be required, good communication can prevent disputes.
Where appropriate, executors may want to keep beneficiaries informed about valuations, marketing and offers received. This can be particularly helpful where the property represents most of the value of the estate.
Ultimately, however, the executor remains responsible for the decisions they make during the estate administration process.
How AFG Law Can Help
Dealing with a property after someone dies can involve considerably more than simply putting the house on the market. At AFG Law, our experienced Private Client solicitors can advise executors on their legal authority, the terms of the Will and the steps required before they sell the property. We can also deal with the probate application, property transfer or sale and the wider administration of the estate.
If you are a beneficiary concerned about the way an executor is dealing with estate property, we can also help you understand the executor’s responsibilities and your legal position.
Whether you are an executor selling a property, a beneficiary hoping to retain a family home or simply unsure what should happen next, obtaining advice early can help ensure the estate is administered correctly and reduce the risk of disputes.
Contact AFG Law’s Private Client team for advice about probate, estate administration and dealing with property following a death.