Does Executor Have to Sell the House Belonging to the Estate?

A house has sentimental value, and when a loved one dies, selling the house can add to the emotions of grieving over your loved one. Thus, many family members ask, “does the executor have to sell the house?”

Can the executor sell the house?

Before answering the question, “does the executor have to sell the house,” we first have to determine whether the executor can sell the house. To know whether an executor can sell the house, we check how the decedent owned the house. Did he own it:

• as trustee of a trust?
• with his spouse?
• jointly with another person with rights of survivorship?
• with another person as tenant-in-common?
• solely in his own name?

If the decedent owned the house as trustee, then the property is not part of the estate. The executor cannot sell the house.

If the decedent owned it with his spouse, the property is probably owned as tenancy by the entirety. Upon decedent’s death, his spouse gets the entire property. If the decedent owned it with another person with rights of survivorship, the property also passes to the other co-owner upon decedent’s death. In both cases, the executor cannot sell the house.

If the decedent owned the property with another person as tenant-in-common (or there is no designation on how he co-owns the property with another person), then only his percentage ownership will pass to the estate. The executor can sell only the percentage interest that the decedent owned.

If the decedent owned the property solely in his own name, the house will pass to the estate, and the executor can sell the house.

Only when the house passes to the estate can the executor sell the house. The house will pass to the estate depending on how the decedent owned the house.

Should the executor sell the house?

Once we determine that the house passes to the estate, we then look to the will of the decedent.

Was the house devised specifically to a beneficiary in the will?

Did decedent specifically devise the house to a beneficiary? If yes, the executor is required to respect the wishes of the decedent and to give the house to the beneficiary. The executor cannot sell the house. If the house is still subject to a mortgage, the beneficiary has to assume the mortgage. Otherwise, the beneficiary will be constrained to sell the house, pay the mortgage debt, and receive whatever is remaining.

If the decedent did not devise the house to any specific person in his will, then the executor may or may not sell the house depending on the circumstances.

One of the executor’s main responsibilities is to pay the debts of the decedent. Usually, when a person owns a house, the house was purchased with a mortgage. If the decedent did not finish paying for the house, then the decedent still has a mortgage debt. Sometimes, a decedent may have other debts, like credit card debts, student loan debts, etc.

Are the assets of the decedent sufficient to pay off all his debts?

If the other assets of the decedent (i.e., bank accounts, investments accounts, etc.) are sufficient to pay of all the debt, the executor should use those assets. If the assets of the decedent are not sufficient to pay the debt, the executor has no choice but to sell the house in order to use the proceeds to pay the decedent’s debts, which would include the mortgage debt.

If the assets of the decedent are sufficient to pay off all other debt (except for mortgage debt), then the executor has two options:

• He can ask the remainder beneficiaries if they want to assume the mortgage. If the mortgage is assumed, then the executor should respect the wishes of the beneficiaries, not sell the house, and deed the house to the beneficiaries.

• If the beneficiaries do not want to assume the mortgage, the executor has to sell the house to pay off the mortgage debt, and distribute the remaining proceeds to the remainder beneficiaries.

Determining whether the executor has to sell a house requires a step-by-step legal analysis to first knowing whether the executor can sell the house, and second, whether the executor has enough assets to pay the decedent’s debts that he doesn’t need to resort to selling the house. If you disagree with the actions of your executor, you may file a temporary restraining order, restraining the executor from selling the property, and a petition to modify the letters of the executor, prohibiting him from selling the property without court approval. You can also file a petition to remove the letters testamentary of the executor if you suspect that the executor is guilty of misconduct. Should you need legal assistance in this respect, 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].