May 25

A Personal Representative May Sell Estate Property if Acting Reasonably for Benefit of Beneficiaries


Jeanne Johnson died with her children Sandra, Stuart and Steven, as well as a grandchild, Scott, as surviving beneficiaries. Sandra, as personal representative of Jeanne’s estate, entered into a rental contract with an option to purchase with Stuart regarding farmland owned by the estate. Steven and Scott filed a petition to have the estate distribute their interest in the farmland and prohibit Sandra from selling the property. The court denied the request holding that Sandra has the power as personal representative to sell estate property and she was acting for the benefit of the interested parties in entering into the contract with Stuart. After the order, Sandra conveyed the property to Stuart. Steven and Scott appealed. Sandra sought to dismiss the appeal arguing the matter is moot because the property had been sold based on a valid contract.

On appeal, the court reversed and remanded the matter for further proceedings. The appellate court held that the matter is not moot due to the sale because Stuart is an interested party to the probate proceedings and not a bona fide good faith, third-party purchaser. As such, due to his interest in the probate proceedings, the court retains jurisdiction over the property even after the sale. Additionally, the court held that North Dakota statute does authorize a personal representative absolute power to sell estate property if evidence is presented that the sale is in the best interest of the estate and the personal representative is acting in a way to reasonably benefit all beneficiaries. However, the court held that the lower court did not explain the basis of its finding that Sandra was acting in the estate’s best interest and cited no testimony or evidence on the record that she was acting reasonably for the benefit of the others. The matter was remanded with instructions for the lower court to make further findings on the record or otherwise support its decision with a more detailed analysis of its determination that the sale was reasonably for the benefit of the estate and the beneficiaries.

Estate of Johnson, 2015 WL 1959394 (May 1, 2015)