Typically the beneficiaries will prefer the cash over real estate because of the flexibility that cash provides. This cash can be used to invest in other financial instruments such as stocks, bond, mutual funds, annuities, etc. Furthermore, the beneficiaries are not "in business" with the other beneficiaries in managing the property. One question I commonly pose to beneficiaries who are set to inherit real estate is "do you want to liquidate or retain the property with the other beneficiaries (invariably relatives) and operate as a quasi-partnership?" The response is practically universe, sell.
If the estate's representative is tasked with selling real estate, prudence is naturally expected of them.
A recent appellate opinion highlighted the failed efforts of an administrator to sell real estate.
"Armuress's expert witness testified Rogers did not effectively market the estate's land holdings in the years after the probate court's 2001 ruling. Rogers removed parcels from the active listings for periods of time and failed to adjust the asking price when the market for similar undeveloped land dropped considerably. At the time of trial, the properties were listed for a total asking price of more than $9 million, but the expert opined the property was worth no more than $6.1 million and the inflated asking price meant the property was effectively off the market. Rogers's expert provided contrary testimony, for sure, but the record supports the probate court's conclusion that "the weight of [the] evidence" showed the properties had been marketable since 2001 yet Rogers failed to sell them."
Estate of Sapp (2019) _____ Cal.App.4th _____
A conclusion from the case would be that to reasonably market real estate, the estate's administrator needs to be mindful of current market conditions. If the real estate market is soft, the price should be dropped to reflect the lack of demand at the current price. Conversely, if the real estate market is competitive, the price could remain as-is.
For context, the opinion noted that it had been 15 1/2 years since the administrator was instructed to sell the properties and failed to do so. While the administrator "sold four parcels in 2004, in the 12 years that followed she had failed to sell the remaining nine parcels."
