One of the duties of an executor or administrator when it comes to settling an estate may be selling estate real property, such as the family home. This may be especially necessary if the estate’s assets are only this real estate and there are many creditors who need to be paid. Having a clear understanding of the rules behind selling estate real property is essential, especially if the fiduciary of the estate needs to sell the property to cover estate debts or to make it easier to divide up amongst estate beneficiaries. Hiring a New York estate attorney is the best way to make sure that the sale goes smoothly and that all of the proper procedures are followed when liquidating such assets.
A restriction on sale of New York real estate is usually included in the Letters Administration given to the Executor. If the letters of administration do not contain a restriction and an estate contains real property, it’s best to first obtain waivers from all interested parties before selling the property. It is especially important when it comes to selling estate real property that the fiduciary hire a New York estate attorney to be sure that any sale that required court intervention indeed has it.
Court involvement in selling real property can vary from case to case, but there are some instances where it is necessary. According to New York law, there is a variety of reasons that the executor or administrator, also known as the fiduciary, or any other interested party must have the court’s clearance before selling property. Mainly, paying off estate debts outside of any mortgage on the property would require the Surrogate’s Court signing off on the sale first. This could include debts arising from funeral expenses or other debts, payments of judgments owed by the decedent that are not related to the mortgage on the property, dividing up estate property for distribution to beneficiaries or even payment of estate or other taxes. The law also has a form of “catch-all” saying that the Surrogate’s Court can require intervention of it “deems necessary”.
In the case of having to sell property, not only does the fiduciary have the right to bring a petition for sale of the property, but any interested party does as well. This is a broad term which could mean that any of the potential beneficiaries or even creditors could be allowed to petition the court for permission to sell real property owned by the estate.
There are some instances where the court may not need to intercede or it may only need minimal involvement. If property was owned by joint tenants, for example, the property owned by the decedent would not be considered to be estate property and would pass entirely to the surviving owner of the property without court intervention. Additionally, if the property is not subject to any sort of debt and all of the beneficiaries are in agreement, there would only be minimal need for intervention of the court to sell the property. In such a case, usually only evidence that all the beneficiaries agree and that the property was being sold at a fair price needs to be provided to the court.
It should be the goal of the fiduciary to protect real property assets and other estate assets that are being bequeathed to the decedent’s loved ones. One way to do this is to liquidate property that was not included in the Will first before having to sell any property that was left to specific heirs.
Albert Goodwin, Esq. is a New York estate attorney in private practice. He can be reached at (212) 233-1233.
Call the Law Offices of Albert Goodwin at (212) 233-1233, New York estate, guardianship, wills, trust, medicaid and probate lawyer, and make an appointment to discuss.
This article is for general interest and research, and does not purport to apply to any particular situation and is not meant as legal advice.