Estate fiduciaries, whether serving as executor and administrator, often face a great deal of uncertainty in exercising their duties. While certain types of personal property are fairly easy to manage while the estate is open, others — especially real estate — require constant attention and maintenance. Failing to take these necessary actions can result in a substantial reduction in the value of the property — called waste in the legal vernacular — for which a fiduciary may be held liable.
In order to prevent waste, a fiduciary should take care to watch over real property and take necessary steps to maintain it on behalf of the estate:
Maintenance of property insurance
Payment of property taxes
Performing routine maintenance
Making repairs of issues that could cause further damage if unresolved
In some instances where an estate takes a particularly long time to settle, an executor may need to consider renting out the estate’s real property in order to preserve its value, maintain insurance and produce additional income for the estate. In many cases, where the will does not specifically bequest the real estate to anyone but simply treats it as part of the overall estate, it may need to be sold in order to achieve the liquidity necessary to make distributions to all the beneficiaries.
As in every other aspect of the fiduciary relationship, an executor is expected to take the same care in doing so that he or she would take in selling his or her own home.
Posted in Real Estate Law | Tagged fiduciary duties, fiduciary power and duty, fiduciary responsibility, professional fiduciary