Selling Property in Probate
Last week, I was at the probate docket at the Oklahoma County Courthouse in Oklahoma City. There, I watched as the judge took to task a personal representative for attempting to sell property without supervision of the court. It got me thinking about a common misconception I frequently hear, which goes something like this: “Mom wanted me to have the house. She gave it to me in her will.” Thanks to movies and television shows, many people believe that, whenever a loved one dies, the attorney simply takes the will out of the safe, reads it aloud to the family and then distributes the deceased person’s estate. The truth is that, under Oklahoma law, a will is not effective to pass title to property until it has been admitted to probate in the appropriate probate court. What about the sale of property by the personal representative?
In discussing the sale of property, we must first distinguish between personal property and real property. Personal property is any property that is movable, such as jewelry or clothes. Personal property also includes stocks and bonds. With regard to personal property, probate judges usually defer to the personal representative’s discretion. If there is sufficient agreement, personal property can be often be divided up among the family members or donated to charity. Furthermore, the Oklahoma probate code gives the personal representative the authority to sell personal property of the deceased that is perishable or likely to depreciate in value. Real property, i.e. houses and land, are a bit trickier. The personal representative must first obtain an order of sale from the probate court after the required notice and hearing. Then the personal representative has to follow the procedures set out by the probate court for sale of the property (it can be a public auction or private sale). Many wills contain what’s known as a power of sale. In this case, the personal representative can sell the property without prior court approval. However, the personal representative is still obligated to make a return of sale to the probate court and account to the probate court for the proceeds generated from the sale.
It is important to remember that a personal representative has a fiduciary duty. This means the personal representative must do what’s best for the estate and not place his or her interests above the interests of the beneficiaries. Breach of fiduciary duty can lead to the personal representative being removed or, worse, lawsuits against the personal representative by the beneficiaries.