November 19, 2013
Authored by: Luke Lantta
Holding real property can be a huge financial drain on an estate. There are a lot of reasons why it might make sense to try to sell property rather than maintain it during the administration of an estate.
In Georgia, when it comes to selling estate property, however, it makes a difference whether it is a personal representative selling the property or whether it is a temporary administrator selling the property. Because, as the Georgia Court of Appeals made clear in In re Estate of Price, a different standard will apply based on the authority of the fiduciary selling the property.
In the administration of the Estate of Fronice Price, a probate court permitted a temporary administrator’s sale of real property owned by an estate after having determined that the sale was “in the best interest of the estate.” This was the wrong standard. While O.C.G.A. § 53-8-10 authorizes an estate’s personal representative to dispose of property for any purpose that is in the best interest of the estate, the statute goes on to authorize a temporary administrator to do so only with the probate court’s leave and provided that good cause is shown.
The appellate court opined that the “good cause” standard is a “different and arguably higher standard” placed on temporary administrators.
This opinion, however, drew a rare dissent. The dissent reached a conclusion that finding a sale of property in the best interest of the estate presupposes a finding that there is (at least) good cause for the sale. The dissent went on to note that there was no controlling authority indicating that “good cause” is a higher standard than “in the best interest of the estate.”
Whether or not the standards are higher or lower, practitioners may want to ensure that an order permitting such a sale recites the statutory language applicable to the particular fiduciary making the sale.