For those wondering “can executor sell property of an estate without all beneficiaries approving,” the short answer is this. An executor appointed by a New York court does not have to seek approval of the beneficiaries. Once the executor is appointed by the court, the executor may act on authority of New York State law to marshal the assets of the estate, pay debts and expenses and disburse the remainder of the estate to the rightful beneficiaries.
However, even though the executor does not legally have to have the beneficiaries’ approval, it may still be a good idea for the executor to communicate with the beneficiaries in a way that can be later proven in court (such as email) to confirm in writing that they agree with the executor’s decision.
For example, if the executor is selling an property of an estate, such as a house or a business, the executor will do well to advise beneficiaries of the price for which the asset is being sold and confirm in writing that the beneficiaries are comfortable with that price, so as to avoid being sued in the future for “selling it under market value.” So does the executor have the final say? Yes. But is it a good idea to for the executor to sell the property without all beneficiaries approving? Not really. Putting himself in such a risky position is what an executor cannot do.
Having your New York estate lawyer get a release form beneficiaries is especially crucial when the transaction in question involves the executor personally, such as when the transaction is between the estate and the executor or the executor derives some sort of benefit from the transaction. For example, if the executor is transferring a share of the decedent’s business, house, or other property to themselves, the executor should obtain a written release from the beneficiaries, or at least get them to approve it in writing, in order to avoid the possibility of being sued. Transferring assets to yourself often triggers feelings of inequity in beneficiaries, so it is important to communicate with them, explain that they are still getting a fair share of the estate, and that they are actually getting more money than they would have if not for you buying them out because of cost savings on transaction costs such as paying a broker. It is important that there is a feeling that the executor fulfilled his responsibilities to the beneficiaries.
The most crucial release that an executor can get from the beneficiaries is at the end of the estate. Once the assets are collected or sold and the debts are paid out, and it’s time for the executor or administrator of a New York estate to disburse the funds to the beneficiaries. But before the executor does that, it is important to get the release from the beneficiaries that states that they are satisfied with what they are getting and are never going to sue the executor. The best release comes with an informal accounting, which provides a summary of what property went into the estates, what the expenses were, and what is the share of inheritance for each beneficiary.
To sum up, the executor does not have to seek the beneficiaries approval, but in many cases it is better to do so before the transaction rather than to be sued by the beneficiaries later.
Albert Goodwin, Esq. is a New York estate lawyer since 2008. He can be reached at (212) 233-1233.
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