Can a contract be voided if personal representative ‘self’deals’?

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Can a contract be voided if personal representative ‘self’deals’?

My brother was named personal
representative for my mothers
estate. The court ordered the
house to be sold to the first person
who had the full amount. My
brother ‘sold’ the house to the first
person who flashed 4,000 in front
of him claimed it was down
payment and accepted rent to own
monthly payments over a 4 year
period! He spent the 4,000
gambling which he admitted in
court to the judge . He also signed
the contract just using his name,
not his name, personal
representative for the estate of, my
mothers name.

Asked on October 2, 2019 under Estate Planning, Arizona

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

No, self dealing does not invalidate the agreement, because the contract can only be voided or terminated against the wishes of other side (the "buyer") if the other side committed fraud or breaches a material (important) term. You cannot use your own  side's actions (i.e. the personal representative's) to void or terminate a contract that the other side wants to continue. You would need the buyer to engage in wrongdoing related to the contract to void or terminate it. Also, the personal representative's fiduciary duty (i.e. to not "self deal") has nothing to do with the buyer, and so again does not affect a contract with the buyer. What it may do is let you sue your brother as PR to either replace his as PR and/or force him to pay money to the estate which he has cost it by his self dealing or carelessness: the PR's fiduciary duty is to the estate, so a violation of it may give the estate a cause of action or claim against him.


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