New York Estate Planning & Elder Law Blog
New York laws of intestacy and probate do not allow an executor to sell real estate or property belonging to a decedent’s estate where no will is present without official appointment by the Surrogate’s Court of the jurisdiction where the case has been filed. If a decedent’s will does not deny sale of real property and other assets, the executor can sell a property without the consent of beneficiaries or probate proceedings. The power of a fiduciary representative in such case, depends on the terms of a decedent’s last will and testament.
Fiduciary Appointment and Duty
According to New York statute, in probate cases where no will is present, an administrator, rather than an executor must be appointed for probate distribution of estate assets to proceed. This includes fiduciary liquidation of the decedent’s financial assets such as stocks, bonds, bank accounts, and sale of real estate. All proceeds are to be deposited into the estate’s holdings for distribution after all creditor claims, legal fees, and other expenses have been satisfied.
To be considered for fiduciary appointment of an estate, a probate petition must be filed with the court, along with the original will followed by notice of all heirs at law. Once appointed, fiduciary duty is an obligation to provide oversight of an estate’s transactions, including real property sales, although final sale and closing must be approved by the probate court. The court maintains record of testamentary documents or letters of administration
Short-sale Probate Liquidation
A short sale pays off a lender accepting less than the full value of a mortgage on a property for purposes of conveyance. Selling a property below fair market value in a short-sale real estate transaction is a common liquidation method pursued by administrators that is not always in the best interests of an estate’s heirs or beneficiaries. The New York Consolidated Laws, Real Property Law – RPP § 463. Exemptions provides a property condition disclosure statement “shall not be required in connection with” transfers of estate or trust held properties, allowing a fiduciary “exemption” from notice of the heirs or beneficiaries of such transactions.
Challenging a short-sale intended to pay-off a foreclosure lien attachment or other creditor issue prolonging a probate proceeding, is not always a simple process should those parties contest a fiduciary’s decision. Before selling a property in a short sale, an estate fiduciary should check with the probate court to ensure that the transaction is not a breach of duty. The court supervision process protects an executor or administrator from liability. The court will determine if the sale is in the best interest of the estate’s heirs.
An experienced attorney specializing in estate law and probate litigation can assist a client in recovery of due monies owed from an estate’s property sale.
New York Estate Law Firm
Ettinger Law Firm is a licensed New York attorney practice specializing in estate planning and probate litigation. Contact Ettinger Law Firm to schedule a consultation about an estate or trust law related matter involving a real estate transaction.
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