Twin Cities bargain hunters are probably familiar with estate sales as an opportunity for good finds, but a recent case that may amount to estate sale fraud might make beneficiaries think twice before hiring someone else to act on behalf of the estate. Because estate sale companies are not subject to any special regulations, they are not liable for the types of fiduciary claims that might apply to a trustee, such as self-dealing or breach of fiduciary duty.
Two Minneapolis women are wondering if they are the victims of misuse of funds by an estate sale company. In particular, the women question whether they will ever see more than $21,000 in sale proceeds which they had hoped to apply toward the care of an elderly family member.
Until recently, the estate sale company, which has been in business for 25 years, boasted a favorable rating with the Better Business Bureau. The Minneapolis women likely had no reason to be concerned about fraud when they signed a sale contract, but with complaints now on file from disgruntled customers ranging from St. Paul to San Francisco, the company’s rating has been downgraded to ‘F’.
Concerns about the lack of regulation over estate sale companies prompted one Minnesota legislator to sponsor a bill requiring companies to post a cash bond prior to holding an estate sale. However, the bill was denied a hearing.
Even though estate sales are a longstanding practice in estate administration, and most sale companies conduct honest business, the risk of being fleeced by deceptive practices highlights the importance of legal assistance and oversight.
Prior to signing any contracts for third-party services, Minnesotans charged with the difficult task of disposing of a loved one’s assets will want to be aware of the steps they can take to minimize risk and preserve estate assets.
Source: Star Tribune, “Estate sale checks never came,” Kelly Smith, May 8, 2012