Can a Personal Representative Transfer Property to Himself?

Short Answer: Can a Personal Representative Transfer Property to Himself?

Generally, no. A personal representative (often called an executor) should not move estate property into his own name just because he holds the office. Florida law treats that kind of transfer as a conflict of interest, and an interested person can challenge it, subject to exceptions that depend on the will and the approvals obtained.

The rules are strict enough that any proposed transfer should be reviewed before anyone signs a document. This page covers Florida estates only. Trusts follow different rules, so trust questions need their own review.

Why a Self-Transfer Creates a Conflict of Interest

A personal representative is a fiduciary. A personal representative must observe the standards of care that apply to trustees, and must use the authority conferred by the probate code, the will, and any court order for the best interests of interested persons, including creditors. His duty is the same as a trustee’s duty under an express trust, and he is liable to interested persons for loss from a breach of that duty (Fla. Stat. § 733.609).

Self-dealing is the classic problem here. The same person sets the price, decides the terms, and signs for both the estate and himself. That is the conflict.

The conflict can exist even when the personal representative plans to pay a fair price. The other beneficiaries often have no easy way to check the price. They must trust the person who is on both sides of the deal.

So what can an executor not do? A personal representative may not use his office to benefit himself at the estate’s expense. Florida’s term is “personal representative,” and that is the term this page uses.

Florida Rules on a Personal Representative Buying Estate Property

Florida’s rule is written in terms of voidability. A sale or encumbrance to the personal representative or the personal representative’s spouse, agent, or attorney is voidable by any interested person, except one who has consented after fair disclosure, unless the will or a contract entered into by the decedent expressly authorized the transaction, or the court approves the transaction after notice to interested persons. The same is true for an entity or trust in which he holds a substantial interest, or any transaction affected by his conflict of interest. One exception is an interested person who consented after fair disclosure (Fla. Stat. § 733.610).

“Voidable” means an interested person can ask to undo the deal.

The same statute lists two ways the rule does not apply. The first is when the will or a contract the decedent made expressly authorized the transaction. Fla. Stat. § 733.610 reads: “Any sale or encumbrance to the personal representative or the personal representative’s spouse, agent, or attorney, or any corporation, other entity, or trust in which the personal representative, or the personal representative’s spouse, agent, or attorney, has a substantial beneficial or ownership interest, or any transaction that is affected by a conflict of interest on the part of the personal representative, is voidable by any interested person except one who has consented after fair disclosure, unless: (1) The will or a contract entered into by the decedent expressly authorized the transaction; or.” The second is when the court approves the transaction after notice to interested persons.

Another section gives a personal representative room to act without a court order. It lets him, acting reasonably for the interested persons, retain estate assets, even those in which he is personally interested. That power is “except as otherwise provided by the will or court order” (Fla. Stat. § 733.612). Keeping property in the estate is a different act from taking it into your own name.

When a Transfer to the Personal Representative May Be Permitted

First, the will may expressly authorize the transaction. The authority in the will matters most when its language is clear and specific.

Second, an interested person may consent after fair disclosure.

Third, the court may approve the transaction after notice to interested persons. Court review gives a judge the chance to look at the terms before the transfer is final.

Documenting value is practical protection. A verified inventory must list estate property at estimated fair market value as of the date of death (Fla. Stat. § 733.604). Fla. Stat. § 733.604 reads: “(1)(a) Unless an inventory has been previously filed, a personal representative shall file a verified inventory of property of the estate, listing it with reasonable detail and including for each listed item its estimated fair market value at the date of the decedent’s death.”

Distribution Under the Will Versus a Transfer Outside It

A distribution to a beneficiary is part of administration. The personal representative must settle and distribute the estate under the will and the Probate Code (Fla. Stat. § 733.602). He must also proceed expeditiously, and generally without a court order, unless the code or the court says otherwise (Fla. Stat. § 733.603). Fla. Stat. § 733.603 reads: “A personal representative shall proceed expeditiously with the settlement and distribution of a decedent’s estate and, except as otherwise specified by this code or ordered by the court, shall do so without adjudication, order, or direction of the court.”

A purchase by the personal representative is a different kind of transaction. It is a deal between the estate and the person running it.

If the personal representative is also a beneficiary, the issue is still the same. A share he receives under the will follows the will’s terms. Buying estate property outside those terms needs the safeguards described earlier.

Before anyone treats an asset as estate property, confirm what the estate actually holds. Mistakes about which property belongs to the estate can create problems of their own.

If You Are an Heir or Beneficiary Who Believes a Transfer Is Improper

An interested person can ask the court to review what the personal representative did. A personal representative may also invoke the court’s jurisdiction to resolve questions about the estate (Fla. Stat. § 733.603).

Can you sue a personal representative of an estate? Florida law makes a personal representative liable to interested persons for loss from a breach of fiduciary duty (Fla. Stat. § 733.609). In those actions, the court must award taxable costs, including attorney’s fees. The court may charge them against a party’s interest in the estate or against other property of that party. How any case turns out depends on its facts, and no result can be predicted.

A beneficiary can also ask for information. On written request to the personal representative, a beneficiary is furnished a written explanation of how an inventory value was determined or, if an appraisal was obtained, a copy of the appraisal: a residuary beneficiary or heir in an intestate estate receives this regarding all inventoried assets, and any other beneficiary regarding all assets distributed or proposed to be distributed to that beneficiary (Fla. Stat. § 733.604).

Removal is another remedy. He may also be removed for holding conflicting or adverse interests against the estate that will or may interfere with administering the estate as a whole, though this cause does not apply to a surviving spouse who exercises the right to the elective share, family allowance, or exemptions (Fla. Stat. § 733.504).

Start a written record now. Note the date of the transfer, the property, and who signed. Act promptly, because delay can make the facts harder to reconstruct.

Steps a Personal Representative Should Take Before Any Transfer

Start by reading the will. Confirm whether it expressly authorizes the transaction. If it does not, the other routes in the statute still apply.

Give full disclosure to each interested person. Ask for consent after fair disclosure, and keep a written record of what was disclosed and who agreed. Writing down the disclosure protects everyone.

If consent is not given, ask the court to approve the transaction after notice to interested persons (Fla. Stat. § 733.610). Do not close the deal first and ask later.

Get an independent valuation of the property. Keep a written record of the price, the terms, and how they were set.

Keep estate funds separate from personal funds. Record every transaction involving estate property.

Before signing any document that moves estate property into the personal representative’s name, contact Trust Counsel, PL for a free initial consultation, which is confidential and carries no obligation to continue.

Talk With Trust Counsel About Your Estate Question

A family member has died. A personal representative is handling the estate. You have learned that he plans to move a house, account, or other asset into his own name, or you are the personal representative and unsure whether you may do it.

Trust Counsel, PL is a Coral Gables, Florida trusts and estates law firm. The firm advises and represents trustees, personal representatives and beneficiaries. Trust Counsel’s attorneys can serve individually as trustee or personal representative. The responsible lawyer for this page is Leslie V. Marenco.

Trust Counsel offers a free first consultation, confidential and with no obligation to continue. Bring the will and any transfer papers you have.

If a personal representative is moving estate property into his own name, you don’t have to sort it out alone. Call (305) 707-7126 or schedule online to talk through your facts with our Coral Gables attorneys.

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