Can a Beneficiary Stop the Sale of a Property?

Can an executor sell a property below market value? Can a beneficiary stop the sale of a property whenever he wants? These types of questions can arise in the minds of a beneficiary, and it is normal.

To keep the legal asset a trust contract is formed between the two parties to keep the legal asset. These agreements can be a trust agreement, will, or insurance policy. A beneficiary must understand the rights and responsibilities of selling the property to ensure both parties’ interests.

Here, this article discusses many rules and responsibilities of a beneficiary and executor on whether a beneficiary can stop the sale of a property.  

General Rule of Thumb

In general, a question arises whether a beneficiary can stop the sale of a property. The answer is simply no. The property sale is registered in a will, and an executor is responsible for carrying out the terms of the will.

Therefore, the beneficiary is unable to defy these guidelines. 

The Beneficiary Role

A beneficiary is a person who receives distributions from capital assets. Trusts, wills, life insurance, pension or retirement accounts, and real estate may provide these distributions.

As a result, even if a beneficiary receives specific assets unless that person is identified as the executor, the beneficiary has no control over how the property is sold, especially if those instructions are written in a will.

The Executors Role

A small brief on the roles of the executors is given below – 

Asset Collection and Protection

Two important roles of an executor are collecting and protecting the assets. The executor must maintain the issuance of the assets in a disciplined manner. They will also try to open two or more accounts to keep track of the financial assets.

Maintaining Records

The executor must maintain the transaction for every document that takes place. He should properly administer all the assets and income of the beneficiary.

Keep Track of Taxes

The executor pays all the taxes on the assets as well as on the undistributed income. The beneficiary must report on the personal income of the amount they gained. Therefore, it is the executor’s job to inform the beneficiary’s taxes. 

Oversight the Investment

The executors ensure a strategy is in place to take care of the interests and needs of both present and future beneficiaries. Trust investments are often anticipated to maintain and reinvest money while producing income for beneficiaries. The executor may occasionally have the power to distribute beneficiaries’ principal.

The Executors Responsibilities 

An individual chosen to handle the estate administration is known as an executor or a trustee. The responsibility of this individual is to carry out the desires of the decedent. The court or the individual who makes the will appoints the assignment to the executor. 

A beneficiary can be appointed as a trustee. Now, whether an individual is a beneficiary or an executor, they must follow the instructions and provisions of the will. 

Can an Executor Change a Will Beside the Beneficiary?

The power to change a will lies in the hands of the person who creates the will. A trustee can change a will in the following consequences- 

• The beneficiary has mental issues.
• The beneficiary is old.
• The shares of a beneficiary are being changed and consented to it.

What to Do If Executor Does Not Carry Out Their Responsibilities for Beneficiary?

Renouncing is a process where the executor gives the right to administer the estate when he does not feel capable of their duties.

But if they’ve already obtained the Grant of Probate and begun administering the estate, this is intermeddling. It means they are no longer free to renounce their responsibilities. Yet, they can only resign from their position by making a court application.

As a result, a new executor or any other named executor can begin handling the estate’s administration.

Can Executor Pass Duties to Someone?

While an executor may instruct others to carry out administrative tasks on their behalf, they are not permitted to have someone else make decisions for them. 

If another executor is specified in the Will, they may also delay their authority to manage the estate without totally resigning from their position. It is referred to as power reserved.

Can a Beneficiary Remove an Executor?

You can ask the Court to remove an executor from their position if you feel they are not doing their duties correctly. The Court will want proof that they are unqualified for the role. 

It might be true if-

• They have physical or mental issues in carrying out the duties
• There is a conflict of interest between the beneficiary and executor
• They are convicted of a crime
• They have taken serious actions, including poor estate management, stealing from it, neglecting to maintain accounting records, and selling property below market value.

Discounts and Dishonesty

The main role of an executor is to follow the requirements of the will. If the will state to transfer property to another person, he should transfer it. If the will states to sell the property, the executor has to do so unless he tries to sell the property for less than market value. There needs to be approval from the beneficiary. 

The executor can sell the property at market value, but the beneficiary will consider this a bad idea. As a result, the beneficiary might try to stop the property sale. The problem is the beneficiary needs to seek court intervention which would take a lot of money and time to cover up.

Most Common Problems for Beneficiaries

When the executor is slow or needs to learn more about their duties, the beneficiaries will experience some common problems. It is better to sort this out with the executor before taking legal action.

These are – 

• The court process becomes delayed.
• The beneficiaries in delays will receive the distributed assets.
• There is a communication gap and a need for more transparency from the executor.
• Assets of the state are in financial recklessness. 

Stopping a Sale

It is quite difficult to prevent an administrator from selling a property. The chances of preventing the sale are only in your favour when the property belongs to a certain beneficiary or cannot be sold.

However, is it possible to purchase the other heirs’ rights? The second option is to come to an understanding with the other heirs not to sell the land.

However, a consensus to refrain from selling or delaying the sale is unlikely because most people want to get their inheritance as quickly as possible.

Selling Below Fair Market Value

The sale will likely stop if the administrator sells a property for much less than market value. A fiduciary commits a fiduciary when they sign a contract to sell to a relative, a close friend, or to themselves for less than market value.

To guarantee that parties receive a fair share of their inheritance, courts look for arm’s length transactions. You can call immediately to the police station if you know an executor is engaging in fraud.

Conclusion

Based on the specific conditions and circumstances, a beneficiary can stop the sale of a property. He should build up communication with the executor and try to follow the instructions and wishes specified in the will.

If there is a disagreement on property sales, beneficiaries should be aware of their rights and obligations and seek legal counsel.

FAQs: Can a Beneficiary Stop the Sale of a Property

Can a beneficiary stop the sale of a property in Canada?

In general, a beneficiary does not have the power to stop the sale of a property in Canada. However, there are some exceptions where a beneficiary can halt the sale.

What are the exceptions where a beneficiary can stop the sale of a property?

The main exception is if the beneficiary is also a joint owner of the property. In that case, the beneficiary can block the sale by refusing to sign the necessary paperwork.

What if the beneficiary believes that the sale is not in their best interest?

In this case, the beneficiary can challenge the sale in court. However, they would need to provide compelling evidence to convince the court that the sale should be halted.

Can a beneficiary stop a sale if there is a dispute among the heirs?

If there is a dispute among the heirs, the beneficiary may be able to stop the sale by obtaining a court order. However, this can be a lengthy and expensive process, and it is usually better to try to resolve the dispute through negotiation or mediation.

What happens if the beneficiary does not agree to the sale, but the other beneficiaries do?

If the other beneficiaries are in agreement and the beneficiary does not consent to the sale, the executor of the estate may be able to seek a court order to proceed with the sale.

Can a beneficiary stop the sale of a property if there is no will?

If there is no will, the property will be distributed according to the laws of intestacy in the province or territory where the property is located. In this case, a beneficiary would not have the power to stop the sale of the property.

What if the beneficiary is a minor or lacks capacity?

If the beneficiary is a minor or lacks capacity, their legal guardian or trustee may be able to halt the sale on their behalf.

Can a beneficiary stop the sale of a property after the sale has been completed?

No, once the sale has been completed, the beneficiary would not have any power to stop the transaction. However, they may be able to challenge the sale in court if they believe that their rights have been violated.