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A beneficiary or executor can live in an inherited house during probate. However, the executor or administrator must fulfill his fiduciary duties in preserving the assets of the estate and administering the property for the benefit of the heirs or beneficiaries.
Beneficiary or Heir Living in a House During Probate
There are two types of beneficiaries who can live in a house during probate: (a) the beneficiary/heir who does not stand to inherit the house; and (b) the beneficiary/heir who stands to inherit the house.
When a beneficiary who does not stand to inherit the house keeps on living in the house during probate, it is the executor or administrator’s fiduciary duty to ensure that the estate assets are managed well and preserved. For this reason, unless all the beneficiaries or heirs agree not to charge that beneficiary rent, it is the executor or administrator’s fiduciary duty to act for the best interests of the estate and to collect rent from the beneficiary.
When such beneficiary or heir refuses to pay rent and the other beneficiaries or heirs oppose to such beneficiary living in the house rent-free, the executor or administrator may move to the court to charge rent and have such rent deducted from the beneficiary or heir’s share in the distribution of estate assets.
However, if the beneficiary stands to inherit the house anyway, the beneficiary does not need to pay any rent for as long as the beneficiary pays for all maintenance expenses and fees related to the house during the beneficiary’s stay in the house. These maintenance expenses and other fees related to possession during the period of probate should not be charged to the estate assets and should instead be paid by the beneficiary living in the inherited house, unless the testator specifically authorizes such charge to be taken from other estate assets.
Executor Living in a House During Probate
If an executor is living in the house during probate and the executor is not the designated beneficiary or heir who stands to inherit the house, there is a conflict of interest in the executor or administrator’s self-interest against the executor or administrator’s fiduciary duties.
An executor or administrator’s fiduciary duty is to manage estate assets and preserve it in favor of the beneficiaries or heirs. The executor or administrator does not have the right to utilize estate assets for his personal use. In this case, a beneficiary could argue that the executor or administrator living in an inherited house has breached his fiduciary duty to the estate and its beneficiaries or heirs.
The first option of the beneficiaries or heirs is to talk to the executor or administrator to tell him that he cannot stay in the property without paying for rent. Negotiating with the executor or administrator on important issues is key to minimizing any legal fees that may be incurred, which could result to a reduction in the proposed distribution shares of the heirs or beneficiaries.
However, if negotiation fails, the beneficiaries or heirs then have several options: (a) they could petition to remove the executor or administrator for breach of fiduciary duty and petition the court to surcharge the executor or administrator for rent; or (b) they can object to the accounting and petition to surcharge the executor or administrator for rent.
The process of surcharging the executor or administrator begins with the filing of a petition to make the executor or administrator liable for damages caused by his misconduct.
If the executor or administrator did not commit any other major breach except living in the house, the second option of objecting to the accounting and petitioning the court to surcharge the executor or administrator for rent is the best option.
Living in an inherited house during probate either by the executor or the beneficiary may have legal consequences, depending on the unique circumstances of each case. It is important to consult a New York estate attorney to ensure that living in the house is within your rights and you will not be charged rent in the future when distribution or accounting is made. Should you have any questions, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].
About the Author
Albert Goodwin Esq. is a licenced New York attorney with over 17 years of courtroom experience. His extensive knowledge and expertise make him well-qualified to write authoritative articles on a wide range of legal topics. He can be reached at 212-233-1233 or [email protected].
