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.

How can I get rid of Grandma and Grandpa's stuff?

This link doesn't really go to an article or story. It's a question that someone posted online, and several people answered it. I found it interesting because it's the kind of question I hear a lot. It's really not unusual that a person is doing his or her best to be an executor but doesn't really know how to deal with specific situations. Click here to read it.

In this situation, the person is wondering how he can rid his home of tons of personal and household things that used to belong to his grandparents. He doesn't say that he's the executor, but I assume that he must be as he is in possession of all of the goods and seems to be reporting to the rest of the family about them. His real issue is that the other people in the family don't want the items but also don't want him to dispose of them.

If he is the executor, he should dispose of the items in the way that maximizes their value. Now, used furniture and household items don't have a lot of resale value. An estate sale or garage sale might gain a few dollars, which would go into the estate and be divided among the beneficiaries. Many of the items he mentions will end up being thrown away, as nobody is going to want second-hand bedding. The executor might donate items that are in good condition but that weren't sold at the estate sale to a charity, and may or not be able to get a small charitable receipt for them.

Documents such as tax returns were mentioned as well. He says that seven years have passed since his grandfather passed away, so on the face of it, it may seem that documents may be discarded. I'd want to make sure that any estate tax returns were completed and filed before I counselled anyone to shred the old documents.

This fellow has been brought to a halt by the self-interested objections of family members. I think he should give them one last chance to collect what they want, then get on with selling them.