# Can executor spend my inheritance due to upgrade house before sale?



## SlugBreath

There are 3 beneficiaries to my father's estate. One of them is my sister and she is married to the executor a non beneficiary. She has decided and convinced her husband the executor that my late father's house needs a new kitchen, carpets and curtains before it is sold. The other beneficiaries do not agree with this and want the house sold warts and all. Can the executor use beneficiaries inheritance to upgrade the house before it is sold?


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## rover600

The beneficiaries inheritance will only go to the beneficiaries...she wont get it unless you give it to her.


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## Padraigb

It is for the executor, and not the beneficiaries, to make the decisions on managing the assets of the estate. That said, a wise executor will keep beneficiaries informed on progress and try to keep them onside with the decisions made. 

In my non-expert opinion, money spent on the sort of thing proposed here is unlikely to be recouped in the sale price of a property. It is possible, but difficult and expensive, to go after an executor for wasting the assets of an estate, so that course of action is best avoided (and that is without even considering the impact on family relationships).

I suggest that you advise the executor to seek professional advice on the best way to present the property to the market. Put simply, he should select an estate agent to handle the sale, and then get advice from that EA.


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## SlugBreath

Padraigb said:


> It is for the executor, and not the beneficiaries, to make the decisions on managing the assets of the estate.



Thanks for that. My father left a sum of money in his account to be divided between his 3 children. I cannot believe that the executor has any rights to this money to spend as he sees fit on the needless upgrade of a house that is to be sold? I can understand some monies may be needed to be spent on ongoing maintenance but a new kitchen?. There was even talk of new bathroom furniture.  My sister is the main mover in this as she feels she will be embarrassed if the house is put on the market in it's present state. What will the neighbours say type of thing!


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## Padraigb

If the money is clearly identified as being something to be divided equally, then it is the executor's duty to do so. The executor is appointed to carry out the testator's instructions, not to override them or second-guess his intentions.


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## WizardDr

I would have thought that if the Executor believed he could secure a better price by the outlay on reasonable grounds then that would be ok.

It could be argued that the Executors fiduciary duty is such that he is bound to investigate the possibility.

Many buyers see value with executor sales for the very reason that they dont seem to realise that better price in this market is available with a better quality house.

Maybe your sister has a point.


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## bleary

It is usually blatantly obvious to a buyer when this is done, there is a huge difference between a house that has been revamped and an executor sale where they throw in cheap laminates and a new kitchen. It puts more buyers off than it would ever attract. The quality is so bad you want to get rid if it but since its new you feel guilty at ripping it out. Its a complete waste of money


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## Bronte

WizardDr said:


> I would have thought that if the Executor believed he could secure a better price by the outlay on reasonable grounds then that would be ok.
> 
> Maybe your sister has a point.


 
I agree that a reasonable outlay can reap benefits, that would be a big clean up and maybe a lick of paint. But a new kitchen and carpets is over the top, unncessary and expensive. 

And apparently the real reason for the expenditure is not logical, it's only about what the neighbours might think. I can tell the OP's sister that the neighbours know full well the state of the house all the years your father lived in and fixing it now will not undo that.  

I would write the executor a registered letter threatening action if the assets of the estate are wasted on work that is not necessary, and that such work needs to be documented and fully justified.   A well worded letter might make them think twice.


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## mathepac

WizardDr said:


> I would have thought that if the Executor believed he could secure a better price by the outlay on reasonable grounds then that would be ok.
> 
> It could be argued that the Executors fiduciary duty is such that he is bound to investigate the possibility....


I disagree. The executor has no property development responsibilities. His duties are simply those that are necessary to execute the wishes of the deceased as set out in the will. nothing more and nothing less. In fact it could be argued that speculating part of the beneficiaries' inheritance as you suggest is both irregular and irresponsible.


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## Bronte

That's an excellent way to put it Mathepac.


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## SlugBreath

mathepac said:


> I disagree. The executor has no property development responsibilities. His duties are simply those that are necessary to execute the wishes of the deceased as set out in the will. nothing more and nothing less. In fact it could be argued that speculating part of the beneficiaries' inheritance as you suggest is both irregular and irresponsible.



That's the way I see it as well. My father never upgraded his kitchen and I think he would be appalled to see his money being spent this way. He wanted his existing estate equally divided between his three children. In my mind I own one third of my father's estate and I think that it is the executor's job to ensure that I get one third of my father's estate as was, at the time of his death. As mathepac says to speculate using my money on the gamble that the house may achieve a higher price when sold is not part of his job.


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## WizardDr

So what about the fiduciary duty?
There is more than a hint of prejudice in some of the comments - tinged with what I might term inheritors excitement at getting their hands on the cash.

The fiduciary duty is a simple concept. It does not mean super human efforts - but the executor is obliged to seek the best price, if this is based on reasonable advice. The fact that an executor might not want to make an outlay would be justified if there was large doubt that it would work. In this market I could not see that this would be the case.

Your belief in your fathers wishes are not relevant here as to securing the best price for a reasonable outlay as your fathers will seems to be silent on this matter.

Your view of the words gamble in a rising property market is why executors achieve spectacularly bad prices. If I was the executor - getting a poor price would save me a lot of hassle than trying to argue with the 'informed' beneficiaries. So breaching the fiduciary duty would ok with you ! 

So read up on fiduciary duties before you suggest it has nothing to do with the executor ..


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## Odea

In the above case it appears that the executor is listening to his wife's wishes. Just because a person is an executor doesn't mean that he is more intelligent than anyone else.


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## RichInSpirit

Another area worth a look at before going through with everything is that your father's solicitor doesn't have to be the solicitor that make's it all happen. 
I know a close family member was executor on a fairly large estate and the deceased's solicitors were expecting something like 30% of the value of the estate. 
They didn't get the colour of it, to put it mildly


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## Setanta12

I like AAM except when people offer opinions without being qualifed in the area or experiencing it themselves ... ...


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## Odea

WizardDr said:


> Your belief in your fathers wishes are not relevant here as to securing the best price for a reasonable outlay as your fathers will seems to be silent on this matter.



Nor does it specifically say that the executor should spend money in the belief that doing so will get a better price for the house.


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## Grizzly

WizardDr said:


> If I was the executor - getting a poor price would save me a lot of hassle than trying to argue with the 'informed' beneficiaries.



Maybe the "informed" beneficiaries have something to bring to the table. Some executors behave as if it is their own money that they are handling.


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## WizardDr

Fact is that executors achieve poor prices.


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## mathepac

WizardDr said:


> Fact is that executors achieve poor prices.


An absurd generalisation. Some executors may achieve poor prices some of the time.

As executor to my late father's estate and more recently an aunt's, I achieved sale prices in excess all of the valuations I sought and paid for. I could in fact have saved each of the estates the valuation outlays if I'd just sold the properties with no EA input. But one must be seen to observe the established protocols.

I believe that properties sold in executors' sales sometimes achieve poor prices because they may be sold within the family at a heavy discount. Another issue is that where a property valued at say €200,000 is sold to one of 4 beneficiaries all with equal "shares" in the estate, the sale price would typically be €150,000 which at first glace looks very poor.


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## Grizzly

WizardDr said:


> Fact is that executors achieve poor prices.



This comment says more about you really!


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## WizardDr

@Grizzly - you are right. Merely looking at figures for 25 years make me somewhat prejudiced. Similar to yourself. I have to avoid mentioning anything about the way the housing markets are going - maybe you get the drift.

Look up fiduciary duty and let me know what you think - which is what this is about.

In fact if an executor acts as if its his own money, its a perfect definition of fiduciary duty - except that the money isn't his. Paying out to the beneficiaries is ultimately what this is about - and part of that is to maximise the value of the estate. That means examining the circumstances not ignoring them. 


Some commentators here should realise that constructive comments are always useful but jibes at commentators - particularly if you happen to be simply disagreeing tends to be why people stop posting here.


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## Pinesky

WizardDr- Do you imply that the executor carry out a business case analysis on whether he should improve or sell as is. Should he employ a consultant to do this if he himself is not competent. What cost of capital should he use and over what timeframe. What percentage of the estate value should he spend on professional fees and cost of works.
If he picks the wrong option by improving the house and not achieving a bigger price could the beneficiaries have a case for breach of fiduciary duty ?


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## IsleOfMan

WizardDr said:


> In fact if an executor acts as if its his own money, its a perfect definition of fiduciary duty - except that the money isn't his. Paying out to the beneficiaries is ultimately what this is about - and part of that is to maximise the value of the estate. That means examining the circumstances not ignoring them.



I disagree. There are lots of people strutting around this town who are incapable of looking after their own money, their banks money, their relatives money etc. I am presently in the position where I have one of these tossers looking after an inheritance of mine. Long before the guy became an executor he was an idiot and a bluffer and he still is!


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## WizardDr

Well then if he does act the way you say - he can be held liable. The breach of fiduciary duty carries consequences.

You could get him removed.  

However - in law its need to be objective (as in would the reasonable person agree) rather than subjective (as in yourself).


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## mathepac

I'm a bit puzzled as to what's going on with various posters in the thread. This summarized process is the one I've followed, based on various advices and inputs. Can someone point out where I went wrong?

• Inventory all of the deceased’s assets
    •    Gather all monies belonging to the deceased or owed to the estate
    •    Secure and protect the assets pending distribution
    •    Sell any assets as necessary (property, shares, etc.)
    •    Pay off debts
    •    File tax return
    •    Pay taxes due from estate
    •    Distribute the estate

Thanks


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## Bronte

mathepac said:


> I'm a bit puzzled as to what's going on with various posters in the thread. This summarized process is the one I've followed, based on various advices and inputs. Can someone point out where I went wrong?


 
I agree with you mathpac, some people on this thread are making things way too complicated.


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## Bronte

WizardDr said:


> Well then if he does act the way you say - he can be held liable. The breach of fiduciary duty carries consequences.
> 
> You could get him removed.
> 
> .


 
Right so, can you list some of these cases where executors have been removed?  I imagine that is would be a very costly and idiotic exercise.  the power and rights of a testator to appoint an executor of their own choosing is fairly enshired in law and will not be taken away lightly.   

Where is your proof that executors achieve bad selling prices.  Why would executors do this in any case, in most situations they are also beneficiaries.


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## WizardDr

1.
The Supreme Court in Dunne v Heffernan [1997] 3 I.R. 431 has held that “...once an executor has been appointed, and proven a will and had thus accepted the duty of administrating a testator's estates, her or she could be removed pursuant to s. 26, subsection 2 of the Act of 1965 only if there were serious grounds or weighty reasons for overruling the wishes of the testator. Serious misconduct and/or serious special circumstances on the part of the  executor would be required in order to justify such a drastic step. The appointment of a new  executor pursuant to s. 27 subsection 4 of the Act of 1965 was not justified merely because one of the beneficiaries felt frustrated or excluded from her legitimate concerns..."

As for your comment on idiotic exercise - could you just deal with the debate as opposed to opining on others' contributions that you don't particularly agree with or is that a major task?

2. What standard of proof do you want - beyond reasonable doubt or on balance of probabilities? Seeing as you are conducting a trial.

Most things in the property market are anecdotal. Many executors would sell the house without seeing as to whether there was an opportunity to increase the sale value by some form of renovation.  On the reverse are you suggesting that executors therefore get good value? The tone of some of the contributions was that how outrageous it was that anybody had the audacity to suggest that the renovations be considered. 

The point that was raised earlier was did the Executor have the power to spend money on renovating the house. HE HAS.

Some of you seem to have forgotten that all that was said was that the executor should investigate the matter as opposed to closing his mind to it. Most might feel that any renovation plan would be risky and conclude that it would not be  in the interests of the beneficiaries to proceed - and that would be fine. That means its been considered. 



And none of you seemed to comment on fiduciary duty.


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## Odea

WizardDr said:


> That means its been considered.



I think the fear is that when it is considered the executor will carry on regardless.


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## Odea

WizardDr said:


> However - in law its need to be objective (as in would the reasonable person agree) rather than subjective (as in yourself).



The subjective view was the executor was an idiot and bluffer. Maybe this is a reasonable and common viewpoint held by many people.


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