Do the beneficiaries have to be consulted about sale of estate assets?

A reader wrote to me recently about the rights of a beneficiary when an estate property is being sold. Here is the question and my response.

"My Aunt is the administrator of my grandmother's estate. With there being no will, the estate was left to her three daughters and the children of her 4th daughter. Can the administrator sell the property without notifying all the beneficiaries of the estate? The three children of the deceased daughter were not notified they were beneficiaries until after the house was sold. Can this be done without the input of all those involved?"

I wanted to give some attention to this particular question simply because I hear variations of it all the time. Beneficiaries want to know why they were not consulted about the sale of assets, particularly the sale of a home.

It is up to the executor or administrator to administer the estate in the way that they believe is best for the estate. There are many duties and obligations that govern what an executor may or may not do, such as the obligation to act in good faith, and restrictions against taking money for themselves or causing losses to the estate. They are not obligated to consult beneficiaries about the disposition or sale of specific assets.

The reason for this arrangement is that an executor or administrator is responsible for selling the asset and therefore must also have the authority to carry out the sale. If agreement had to be obtained from every beneficiary for every sale of an asset, no estate would ever be finished. Every estate would bog down in arguments.

It may be hard for a beneficiary to accept, simply because there is such a strong emotional component to every estate-related decision. In this case, the house wasn't just a house, it was their mother's home. This always leads to a feeling of being left out or deliberately snubbed when someone is not consulted. Though I am constantly telling clients to try to keep the emotions under control during estates, I know that can be impossible. All I can say is try not to demonize the administrator without good cause.

Sometimes executors choose to involve beneficiaries in the decisions surrounding the sale of assets, for various reasons. One reason is that they don't want to upset people. Another is that they may think that a beneficiary might be interested in buying or receiving a particular asset. These are voluntary choices made by executors.

In this particular case, it does seem that the administrator did not send out notice to the beneficiaries particularly early in the process. Whether that was intentional so that the administrator could sell the house without any interference is impossible to know.  It could simply be that it took time for the administrator to consult a lawyer about who was to inherit and then gather the names and addresses.

The requirement for notifying beneficiaries differs from province to province. Most of the time, notice is given at the time the application is made to the court for probate or administration. In some provinces, the court won't grant the request until it's proved that notice was given. That's not the same everywhere. Some provinces have no formal rules at all about notifying beneficiaries at any particular time or step in the process. This means that in some provinces, notice in pretty much any form can be given to the beneficiaries at pretty much any time.

While the administrator does have the right to sell the property, this does not mean that the beneficiaries have nothing to say about it. At the end of the estate administration, the beneficiaries will be given their inheritance and will be asked to sign a release. If it turns out that the administrator sold the house at too low a price, for example, the beneficiaries can object to it. They can refuse to sign a release, or they can compel the administrator to pass accounts through the court. This holds an executor or administrator to account for decisions made on behalf of the estate and gives the beneficiaries a voice.