What options exist for selling or auctioning personal property to reimburse estate expenses and equalize distributions among heirs?

Detailed Answer

When you administer a California estate, you may need to convert personal property into cash to pay debts, taxes, and administrative expenses, or to level the playing field among beneficiaries. The California Probate Code grants a personal representative several streamlined procedures to sell or auction estate assets without waiting for court approval, provided heirs and creditors get proper notice.

1. Summary Sale Under Probate Code Section 9600–9618

A summary sale lets you dispose of personal property subject to these rules:

• Give written notice to all beneficiaries, heirs and known creditors at least 15 days before the sale. (Probate Code § 9601) View section 9601.
• If no objections arise, you may sell without court confirmation.
• Use public auction, sealed bids, or private sale at fair market value.

2. Public Auction (Probate Code Section 9605)

You can hold an open auction at a public venue. Key points:

• Advertise the time, date and location in a local newspaper or on an online auction platform.
• Describe the major items you plan to sell.
• Conclude the sale only after the 15-day notice period expires with no objections. Prob. Code § 9605.

3. Sealed Bids (Probate Code Section 9608)

Sealed bidding can maximize the estate’s return:

• Accept sealed offers until a specified deadline.
• Open bids in public or private, then award to the highest bidder.
• Ensure you list bid procedures in the notice. Prob. Code § 9608.

4. Private Sale

You may negotiate a private sale if you can demonstrate the transaction reflects fair market value. The same 15-day notice requirement applies. Document comparable sales or third-party appraisals when values exceed $5,000. Prob. Code § 9612.

5. Equalizing Distributions

If some beneficiaries receive specific items—like jewelry or furniture—you can offset the cash value of those items against their share of the residue. Under Probate Code § 10405, the personal representative may set off property values to ensure each beneficiary ultimately gets an equal net inheritance. Document all appraisals and accounting entries.

6. When Court Confirmation Is Required

If an heir or creditor objects to the summary sale, you must petition the court for confirmation under Probate Code § 10100–10124. The court reviews fairness of price and sale procedure before giving final approval.

Helpful Hints

• Start with a full inventory and written appraisals for items valued over $5,000.
• Send notice via certified mail or use a reliable online publication to prove you met the 15-day requirement.
• Keep detailed records of all bids, advertisements, receipts and bank deposits.
• Coordinate with an accountant or tax advisor before selling assets that may trigger capital gains.
• If beneficiaries disagree, offer to set aside certain items rather than sell, then sell the remainder.
• When in doubt, consult a probate attorney to avoid challenges and delays.