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Tuesday, January 29, 2013

Selling off assets in a garage sale risky for executors

I remember when, a couple of years ago, a story hit the news about how a woman holding a garage sale for an estate sold a painting for $2. She later found out that the painting might have been painted by Picasso and was possibly worth millions of dollars.

I suppose people would react to this story in different ways. Most were probably thinking about her bad luck in letting something so valuable slip away. Being an estate lawyer as I am, my thoughts were more about her duty to the estate and whether she might end up being personally liable for the loss to the estate. After all, if she had placed the correct value on the painting, the money would have gone to the beneficiaries of the estate.

This point was recently made in a blog post at www.estatedebate.com. Click here to read their comments and, if you like, read the original news story about the "possible Picasso" as well.

I don't want you to think that the moral of this story is that you should never hold a garage sale for an estate. Many, many executors successfully hold garage sales without any problems, and it's still a viable solution. The important thing to remember is that if you are an executor, you must be careful to place proper values on items. If the deceased collected paintings or sculpture, even on a small scale, get an appraiser to take a look before you decide to put items on that sale table. Same goes for almost any kind of collection, from baseball cards to antique furniture.

Failure to place proper values on items can lead to lawsuits against the executor by the people who would have inherited the money had the item been sold for its proper value.

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