It is easy to believe that when your parents pass away, you or your siblings will easily be able to buy the family home from the estate. However, this is not always the case, especially for an executor.
An executor is required to act in the best interests of the estate. This means, among other things, that the executor is required to obtain the best price possible when selling estate assets. By default, this means selling estate assets on the open market to obtain the best possible price. In some cases, the beneficiaries will all agree to allow the executor to purchase estate assets at a certain price. However, if even one of the beneficiaries disagrees, it can be difficult or impossible for the executor to buy estate assets.
An executor who wants to buy property from the estate and does not have the agreement of all beneficiaries must bring a court application and demonstrate to the court both that the purchase price is advantageous to the estate and no other purchaser has been forthcoming or is likely to come forward in a reasonable time. If the executor cannot show that this is the case, the court is unlikely to approve the sale.
Dewberry Estate (Re), 2023 BCSC 1325 is an example of a case where an executor unsuccessfully applied to the court for an order that she was permitted to purchase real estate from the estate. In that case, the court found that the executor had not done enough to sell the property at a reasonable price on the open market and it was questionable whether her offer was the best offer that could be obtained for the property.
This has important implications for your estate planning. If you would like to make sure that your executor or one of your beneficiaries is able to purchase your home from your estate, the best way to make sure that is possible is by putting it in your will. Ideally, your will would say who has the ability to buy the home, how the purchase price will be determined and how long that person has to complete the purchase of the property.
At Lakes, Whyte LLP, our estate planning lawyers can help you make sure that your will does what you want it to do, so that you can avoid conflict in estate administration. Our estate administration lawyers can also help you as executor, if you would like to buy estate assets or one of the beneficiaries would like to do so. Ultimately, the goal is the smooth administration of the estate.