Can an Executor Buy Estate Property? Understanding the "Two Hats" Problem

One of the most common questions Executors ask during estate administration is: "Can I buy the deceased's house?"

The short answer is yes—but it is rarely straightforward.

An Executor owes strict fiduciary duties to the Estate and its beneficiaries. If an Executor wishes to purchase property from the Estate they are administering, they immediately enter a potential conflict of interest.

This conflict arises whether or not the Executor is also a beneficiary under the Will. However, it most commonly occurs when an Executor is one of several family members inheriting a share of the Estate.



Handled properly, the sale can be entirely legitimate and smooth. Handled poorly, it can lead to family disputes, costly delays, and personal legal liability.

Why Does Purchasing Estate Property Create a Conflict?

An Executor has a legal duty to act honestly, in good faith, and in the absolute best financial interests of the Estate and its beneficiaries. That means their goal should be securing the best possible price and terms reasonably available.

As a prospective buyer, however, their natural goal is the opposite: acquiring the property on favourable terms.

This scenario is often described as the Executor "wearing two hats"—one as the impartial personal representative of the Estate, and the other as an interested purchaser.

New Zealand law does not automatically ban these transactions. However, because of the inherent conflict of interest, the Executor must be able to prove that the transaction was conducted fairly, transparently, and at true market value.

How Can the Conflict Be Managed?

Every Estate situation in Canterbury is unique, but following robust legal practices will protect both the Executor and the beneficiaries.

Good practice generally includes:

• Obtaining an Independent Valuation: Securing a formal valuation from a registered valuer rather than relying on a rateable value (RV) or real estate estimate.

• Ensuring Fair Market Value: Setting a purchase price that genuinely reflects current market conditions.

• Full Transparency: Fully informing all beneficiaries of the proposed transaction and providing them with copies of the valuation.

• Obtaining Informed Consent: Getting written, fully informed consent from all beneficiaries before proceeding.

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• Checking the Will: Confirming whether the Will explicitly grants the Executor power to purchase Estate assets.

• Documenting the Process: Keeping meticulous records of all communications, valuations, and decisions.

• Seeking Independent Legal Advice: Ensuring the Executor and beneficiaries receive professional guidance prior to signing an agreement.

Where there is any disagreement between beneficiaries or uncertainty surrounding value, placing the property on the open market is usually the safest and most prudent course of action.

What Can Go Wrong if the Sale Is Handled Poorly?

Most estate disputes arise not because the Executor purchased the property, but because the beneficiaries felt kept in the dark or treated unfairly.

Common questions that spark legal challenges include:

• Was the property sold below its true market value?

• Were all beneficiaries provided with full, accurate information?

• Could a higher price have been achieved on the open market?

• Did the Executor place their own financial interests ahead of the Estate?

If the transaction fails to meet legal standards, beneficiaries can challenge the sale in Court. The Court may require the Executor to compensate the Estate for any financial loss, overturn the sale, or, in severe cases, remove the Executor from their role entirely.

A Practical Example: Buying the Family Home

Imagine an Executor who has lived in the family home for several years and wishes to purchase it from the Estate following their parent's passing.

The other siblings (who are also beneficiaries) support the idea, provided the Estate receives fair value.



By commissioning an independent registered valuation, sharing the report openly with their siblings, obtaining formal written consent, and having the sale drafted by a lawyer, the Executor successfully completes the purchase while fulfilling their fiduciary duties and avoiding family tension.