For those wondering “can executor of an estate sell property of the estate”, the short answer is Yes, unless there are restrictions in his Letters Testamentary which requires court approval before selling the property or there is a restriction that limits the administration of the estate to a certain amount. 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. That can include a house, bank account, stock portfolio, automobiles, and any other assets of an estate.
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.
Assets that were held in the sole name of a New York City decedent at the time of the decedent’s death are subject to probate under New York laws. Assets may include cash in bank accounts, real estate, stocks, bonds, motor vehicles and vessels, a family business, royalties and copyrights and other assets. The executor , together with the assistance of a New York City estate attorney, must compile a list of the decedent’s assets and prepare an inventory. A New York probate attorney can also recommend other professionals that the executor may need to hire to determine the value of the assets such as an appraiser, real estate broker and CPA or accountant.
An estate inventory is required to be submitted to the Surrogate’s Court within 6 months days after the executor of the estate is appointed. Compiling the estate inventory also gives you a chance to determine the total value of the estate and the amount of any estate taxes that are due. Your estate attorney will review the inventory to make sure that everything is in order before it is submitted to the Surrogate’s Court for review and approval.
Assets That May Need to Be Sold
The executor is in charge of reviewing the creditor’s claims and other claims submitted by the decedent’s creditors and interested parties to the estate. Creditors and other claimants must submit their claims within the prescribed statutory period in order to get paid. Sometimes, the executor must sell some of the estate assets to pay off creditors.
Assets that may need to be sold are as follows:
• Decedent’s primary residence, vacation property or retirement property or any commercial real estate
• Family business including business equipment and business assets
• Stocks, bonds and other investments
• Collectible items including artwork, classic cars, etc. and memorabilia
• Furniture and household furnishings
Many times the executor will discuss the sale of the decedent’s assets with the beneficiaries, to make sure that everyone is in agreement so as to avoid any estate litigation accounting challenges later on by one or more of the beneficiaries. The executor may also decide to sell assets even if they are not needed to pay off creditors. For example, many times the decedent’s family members and beneficiaries decide that they would rather receive the cash proceeds from the sale of the decedent’s house than keep the property and have to become landlords.
Large estates, especially celebrity estates, often have estate sales where items are auctioned off at public auctions. Smaller estates may simply decide to sell assets in an informal sale.
If you involved in the sale of estate assets as an executor, or you are a beneficiary or interested party who would like to expedite the closing of an estate, contact a New York City probate and estate attorney to assist you with the matter. An attorney can help with locating and selling estate assets, preparing and reviewing accountings, attending court hearings and making sure court and tax deadlines are met on time.
An executor is a fiduciary, meaning that he has a duty to exercise the utmost good faith and undivided loyalty toward the beneficiaries throughout the relationship. Does the duty to exercise “good faith and undivided loyalty” include a duty to seek approval from the beneficiaries before selling a house? An executor “must act in accordance with the highest principles of morality, fidelity, loyalty and fair dealing.”  Does the executor’s failure to seek the beneficiaries’ approval violate those principles? Probably not. Unless of course the executor is self-dealing, which is a violation of fiduciary duty.
So can an executor of an estate sell property of the estate below market value? No. Selling the property of the estate for less than market value for entities controlled by the executor, or getting money “under the table” is embezzlement, or more simply, stealing.
New York Consolidated Laws, Estates, Powers and Trusts Law – EPT § 11-1.6 states that “Every fiduciary shall keep property received as fiduciary separate from his individual property. He shall not invest or deposit such property with any corporation or other person doing business under the banking law, or with any other person or institution, in his own name, but all transactions by him affecting such property shall be in his name as fiduciary.” 
New York’s Penal Law (the Criminal Law) states that “A person steals property and commits larceny when, with intent to deprive another of property or to appropriate the same to himself or to a third person, he wrongfully takes, obtains or withholds such property from an owner thereof.” 
The estate owns the house. If the executor uses the house to benefit himself at the expense of the beneficiaries, he would be committing embezzlement, which is a larceny.
New York Penal Law continues to say that “Larceny includes a wrongful taking, obtaining or withholding of another’s property, with the intent prescribed in subdivision one of this section, committed … by conduct heretofore defined or known as common law larceny by trespassory taking, common law larceny by trick, embezzlement, or obtaining property by false pretenses.” 
Someone who has been nominated as the executor by the will but is not yet appointed by the court do not have the power to sell a house. The law states that “an executor named in a will has no power to dispose of any part of the estate of the testator before letters testamentary or preliminary letters testamentary are granted, except to pay reasonable funeral expenses, nor to interfere with such estate in any manner other than to take such action as is necessary to preserve it. 
To sum up, can the executor of an estate sell property of the estate? Yes. 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.
You can call Albert Goodwin, Esq., who is a New York estate, guardianship, wills, trust, medicaid and probate lawyer, and make an appointment to discuss spousal claims and rights to the estate. He can be reached at (212) 233-1233 or (718) 509-9774.
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