When a person passes away, the process of complying with the terms of the will is known as probate. This legal process generally involves appointing an executor (typically named in the will) to manage the decedent’s estate. The executor is the person responsible for liquidating assets of the estate. If you are named as an executor, you may need to liquidate some of the estate’s assets to pay off the decedent’s and estate’s financial obligations. If estate liabilities need to be paid, try to settle those obligations using the decedent’s bank accounts. Since the cash is already available, you can avoid the complications that could arise from asset liquidation.
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Review your fiduciary duties as executor. As an executor, you have a responsibility to the beneficiaries of the estate to efficiently manage the estate's assets and make decisions that benefit the entire trust. You are not permitted to take actions that would enrich you at the expense of the trust. For this reason, you should not sell any estate property during the liquidation process to yourself or any of your associates to avoid the appearance of a breach of your fiduciary duty.
Read the will. The will states the decedent’s wishes regarding how property is to be distributed amongst his beneficiaries. You may need to dispose of numerous assets to settle outstanding debts, but the will often can guide you in regards to what to sell first. Specific bequests made in the will with obvious emotional attachment may be liquidated after other assets, such as stock, that have less sentimental value.
Determine the purpose for the liquidation. You may need to liquidate assets to settle debts, or certain assets may need to be sold because the property cannot be divided or shared amongst the specified beneficiaries. You will either need to liquidate enough assets to cover the liabilities or liquidate specific assets based on the purpose.
Determine the value of the assets you wish to liquidate. If the assets are publicly traded stocks or securities, determining valuation will simply be a matter of looking up what the stocks are trading for on the appropriate exchange and printing out a copy of that price for your records. If the asset is real estate or property with an undefined market, you will need to have an appraisal. Hire a licensed appraiser with whom you do not a personal relationship. Consider having multiple appraisals to establish the fair market value and keep all reports related to the assets value.
Find a buyer. You may need to hire a broker or other intermediary to help you complete the sale, especially if the asset is real estate.
Review the probate code to determine if you need to have court approval prior to a sale. Since the assets are in probate, you may need to have the supervising court’s approval before you sell the asset. Consult with the appropriate clerk of court or your state’s probate code to determine what steps you need to take.
Complete the sale. Execute all documentation required for the transfer. Sign the documents in a way that signifies you are acting as executor for the estate. Deposit all funds from the sale in the estate's bank account, which you should have established as part of the probate process.