Can an executor sell assets listed in a will

I recently received a frantic call from Milt. His father had passed, leaving a will naming Milt as executor, and Milt discovered a codicil—a handwritten amendment—that specifically prohibited the sale of his father’s vintage Porsche. Unfortunately, the original will hadn’t been properly stored, the codicil was unsigned, and Milt was facing immediate creditor claims. He’d assumed he could simply sell the car to cover debts, and now he was staring at potential legal battles and significant financial loss. This situation, sadly, isn’t uncommon.

What Powers Does an Executor Actually Have?

As executor, you’re stepping into a fiduciary role, meaning you have a legal and ethical duty to manage the deceased’s estate responsibly. But that power isn’t absolute. The will itself dictates many of your actions. While a will generally grants you broad authority to act on behalf of the estate, that authority is always subject to the will’s specific terms. If the will explicitly forbids the sale of an asset, you’re legally bound to respect that instruction – assuming the codicil is valid. As an estate planning attorney and CPA with over 35 years of experience here in Temecula, I’ve seen countless estates complicated by unclear or improperly executed instructions.

When Can an Executor Sell Assets?

Typically, an executor has the power to sell assets when it’s necessary to pay debts, taxes, and administrative expenses of the estate. This is often the primary reason for liquidation. However, the sale must be conducted prudently and in the best interests of the beneficiaries. Consider these scenarios:

• Strong:Debt Payment: If the estate lacks sufficient liquid assets (cash, checking accounts) to cover outstanding debts, selling property is often necessary.
• Strong:Tax Liabilities: Estate taxes, even with the OBBBA maintaining the $15 million federal exemption effective Jan 1, 2026, can be substantial. Selling assets might be required to meet these obligations.
• Strong:Estate Administration Costs: Expenses like attorney’s fees, accountant fees, appraisal costs, and court fees all come from the estate, and sale of assets may be needed to cover them.

However, simply wanting to sell an asset isn’t enough. You must demonstrate a legitimate need and a reasonable justification for the sale. Beneficiaries can challenge a sale if they believe it wasn’t in the estate’s best interest or violated the terms of the will.

What About Assets with Specific Instructions?

As Milt’s case illustrates, specific instructions in the will—or a valid codicil—override general executor powers. A prohibition against selling a particular asset is binding, unless it’s demonstrably impossible to administer the estate without doing so (a rare circumstance). If the prohibition is vague, it may open the door to litigation and interpretation disputes. It’s crucial to scrutinize the entire document, including any amendments.

What If the Will is Silent on Asset Sales?

If the will doesn’t mention specific assets or restrictions on sales, your authority is broader, but not unlimited. You still have a fiduciary duty to act prudently. This means obtaining fair market value for any assets sold and documenting your decisions carefully. Remember, you could be held personally liable for any losses resulting from imprudent decisions.

Digital Assets and the Importance of RUFADAA

Don’t overlook digital assets. Without specific RUFADAA language (Probate Code § 870) in your Trust or Will, service providers like Coinbase and Google can legally deny your executor access to your digital assets. This can create significant complications, especially if the estate includes cryptocurrency or valuable online accounts. Ensure the will grants you access and authority to manage these assets.

The CPA Advantage: Step-Up in Basis and Tax Implications

As a CPA as well as an attorney, I bring a unique perspective to estate administration. Selling assets can trigger capital gains taxes. However, beneficiaries receive a “step-up” in basis to the fair market value of the assets at the date of the decedent’s death. This means they only pay capital gains tax on any appreciation after that date, potentially saving a significant amount in taxes. Properly documenting the asset’s value at the time of death is crucial. For real property, this requires a qualified appraisal.

Navigating AB 2016 and the Small Estate Affidavit

If the estate includes a primary residence, understand the nuances of AB 2016. For deaths on or after April 1, 2025, a primary residence valued up to $750,000 qualifies for a ‘Petition for Succession’ under AB 2016 (Probate Code § 13151). This is a court Petition requiring a Judge’s Order, unlike the Small Estate Affidavit (strictly for real property < $69,625, used for timeshares/vacant land). Be aware that to qualify for AB 2016, the decedent’s other non-real estate assets must typically remain below the separate $208,850 Small Estate limit. It’s a complex area and easily misapplied.

Ultimately, selling assets as an executor requires careful consideration of the will’s terms, the estate’s financial needs, and your fiduciary duty to the beneficiaries. When in doubt, seek legal counsel.

How do California courts decide whether a will reflects true intent or creates ambiguity?

In California, a last will and testament operates within a probate system that emphasizes intent, clarity, and procedural compliance. When properly drafted, a will does more than distribute property—it creates legally enforceable instructions that guide courts, fiduciaries, and beneficiaries through administration with fewer disputes and less uncertainty.

For California residents, understanding how intent, authority, and compliance interact is one of the most effective ways to protect family harmony and estate integrity. A will that anticipates probate scrutiny is far more likely to be honored as written and far less likely to become the source of unnecessary conflict.

Resources for Asset Management & Transfer

• Property Tax Reassessment: California State Board of Equalization (Prop 19)
  This page details the “Base Year Value Transfer” rules. It explains that heirs can only avoid a property tax reassessment if the inherited home becomes their primary residence and the Homeowners’ Exemption is filed within one year of the date of death.
• Real Estate Probate (AB 2016): California Probate Code § 13151 (Petition for Succession)
  The specific statute for the AB 2016 process. It outlines the requirements for using a court-approved “Petition” (not an affidavit) to transfer a primary residence worth $750,000 or less (gross value) for deaths occurring after April 1, 2025.
• Small Estate Affidavit: California Probate Code § 13100 (Personal Property)
  Access the statutory language for the “Small Estate Affidavit.” This procedure is strictly for Personal Property (cash, stocks, vehicles) and is limited to estates with a total value of $208,850 or less (effective April 1, 2025).
• Federal Estate Tax Exemption: IRS Estate Tax Guidelines
  The authoritative federal resource for estate valuation. It reflects the 2026 exemption increase to $15 million per person, which is critical for high-net-worth asset planning and determining if an IRS Form 706 is required.
• Unclaimed Assets: California State Controller – Unclaimed Property
  The primary portal for executors and heirs to search for “lost” assets—such as forgotten bank accounts, uncashed dividends, and insurance benefits—that have been remitted to the State of California for safekeeping.
• Business/LLC Compliance: FinCEN – Beneficial Ownership Information (BOI)
  The official portal for corporate transparency reporting. Most domestic and foreign entities (LLCs, Corps) must file a report. Executors must verify compliance, as failure to update control information within 30 days of death can result in federal civil penalties.