Development within Estate

The main asset of my Grandmother's estate is her former PPOR. The will did not provide for a testamentary trust.

If all the executors and beneficiaries agree that the best way to maximise the value from this asset is to sub-divide the land, develop and sell the resulting units can this be done by the executors while the property is still within the estate?

 

Short answer is yes it is possible, but many issues. Has she passed away?

 

Thanks Terry. Yes, she passed away in June and probate has been granted. What are the main things we need to watch out for?

The long story is that the executors have (following some bad advice) transferred the property into their own names (in their own capacity, not as executors) contrary to the will. The executors are the residual beneficiaries but without selling the property there are insufficient assets in the estate to satisfy the specific gifts of the other beneficiaries. Presumably, this transfer (although it has been registered) is legally void?

I have no doubt that they will not keep all the proceeds from the development for themselves (i.e. they will give the other beneficiaries their specific gifts as per the will and probably a share of the development profits) but I doubt it is a good idea for the development to be done in their own names.

One of the executors also has an issue with Centrelink as they are now taking into account his share of the property for the asset test which reduces his pension entitlement. Does anyone know if Centrelink counts entitlements under a will (after probate has been granted but before the gift has been distributed to the beneficiary) as part of the asset test?

 

Need specific legal advice on terms of will.

 

Yes. Centrelink count inheritance assets for asset test

 

They need to get some serious advice, better than last time.
No doubt you are not one of these executors but are most likely related to them and one of the people who are in the pool of people who won't get their share of the estate until something is sold.

What I will say in terms of development is that they need to be VERY careful doing the due diligence and feasibility to ensure that doing the development truly is the best way to go. Sometimes it's best to just do it simply and sell the house as it is with development potential to someone else and keep it simple and divide up the estate.

 

Yes the executors are taking personal risks here and possibly breaching their duties and could be sued. So if they do determined they have the power to do a development they should get all pote tial beneficiaries permission