Can an Administrator of an Estate Sell Property?

Can an Administrator of an Estate Sell Property?

Before any individual can transact with an estate account in any way, or even open one, they must be appointed as a fiduciary by the court. The appointment is usually made by the Surrogate's Court of New York. It is important to note that even if the deceased left a will in which an executor was named, the executor cannot deal with the estate unless the court grants authorization. The authorization of a fiduciary by the Surrogate's Court is called the Grant of Probate (or Administration, if there was no will).

The position of a fiduciary is one of trust. When a fiduciary is named, they are so named because the decedent or the court believes that they will do everything in their power to act in the best interests of the estate that has been entrusted to them.

That said, the question often arises as to what exactly constitute the duties of a fiduciary, and what they can or cannot do. One of such questions is whether an administrator can sell property belonging to the estate. In this article, our experienced New York estate planning attorney explains all you should know about the duties of estate administrators and their powers to sell property. 

Duties of an estate administrator

Before answering the question of whether an administrator of an estate can sell property, let us explore the duties of an estate administrator. Generally, an administrator is charged with ensuring the estate is properly collected and accounted for, as well as distributing the estate according to law. These duties are explained as follows: 

• Locating and collating all assets of the estate: When you get the authorization of the court, one of your primary and initial duties is to locate, collect, and record all assets of the estate. You are expected to keep the records safe until you conclude your fiduciary duties over the estate.
• Register a list of the assets with the Surrogate's Court: You must do this within six months of the date you received Letters Testamentary authorizing you to administer the estate. After filing the inventory with Surrogate's Court, you can begin to administer the estate in earnest. It is up to you to decide how the estate assets should be invested and what sorts of investments will best benefit the estate. 
• File and pay taxes and the debts of the estate: You also need to pay any taxes due, know when to file for tax exemption, and pay off the estate's debts. The financial records of the decedent should give you a clear picture of the estate's debts. 
• Distribute what is left of the estate to its heirs: After paying off the debts and taxes on the estate, distribute the remaining assets in the estate to its heirs either per New York law or in deference to the provisions of the will (if there was one). 
• Closing the estate: Once all beneficiaries have received the benefits coming to them, you can close the estate. To do this, you need to get a signed receipt and release from each of the estate's heirs and file them with the Surrogate's Court. 

Can an estate administrator sell property?

So, yes, as an estate administrator, you can sell property. However, you must know what types of assets may be sold when administering an estate. You also need to understand the restrictions in your Letters Testamentary (if any) and knowing when you need court approval before selling property. 

That said, if you are named a fiduciary to an estate, you should hire an estate planning attorney in New York. A competent and experienced estate planning attorney will counsel you on the best approach to adopt when carrying out your duties as a fiduciary. With the counsel of your estate planning attorney, you are assured that none of the steps you take in the carrying out of your duties will result in your getting sued.

Assets that may be sold when administering an estate

The following is a list of assets that are typically sold when administering an estate:

• Family homes, apartment buildings, co-ops, townhouses, or condos
• Vacation real estate which may include vacation homes, timeshares, or ownership of other resort property
• Real estate investments including stocks and bonds
• A business the decedent used to run
• Artwork, coins, antiques, classic cars, or other collectibles
• Furniture
• Memorabilia
• Jewelry

When putting up property for sale, you should work with your New York estate planning attorney in valuing the asset. The services of a professional valuer will often be required to show that the asset was sold for a fair market price. Your attorney can advise you on how the law expects the process to proceed and where a valuer can help. 

What if the beneficiaries do not consent to the sale of the property?

Legally, you do not need to get the consent or approval of the beneficiaries when putting up property for sale. As a court-appointed fiduciary, you have the authority to make these decisions. However, it is a good idea to be on the same page with beneficiaries so that there will be no dispute between you and them. You might also want to consider committing the outcome of your discussion with the beneficiaries into writing. 

Thus, if there is a dispute over the sale of any property, you can refer to the written evidence. The role of the fiduciary is one that calls for transparency in all dealings coupled with having the best interests of the estate at heart. This makes it even more important to put everything in writing as this will provide proof of your integrity.

Being on the same page with beneficiaries requires that you advise them of the price for which the property is selling and confirm from them that they are satisfied with the selling price. 

Can I buy from the property I am putting up for sale?

So you saw a piece of art or jewelry that you like and you are thinking of putting in a bid. However, you are wondering whether you are allowed to do so. Won't the beneficiaries feel like you are trying to take advantage of the position you occupy? Won't they think you are trying to sell them short?

Generally, an executor or administrator is not expected to buy estate property. Although, buying such property may not be against the law, strictly speaking. It is however important for you to be absolutely above board during the transaction. Have a professional valuer estimate the fair market price of the asset so there can be no allegations of you trying to sell the estate short. 

Getting a release from the beneficiaries can also help avoid the possibility of litigation later on. Have your New York estate planning lawyer get a written release from the beneficiaries or failing that, have them put their consent in writing to avoid your getting sued later.

You should also strive to get them to understand that they are not getting the short end of the straw, but a fair deal in having you buy some of the property you are putting up for sale. Help them understand that they are getting more money from your buying the property than they would if you were not buying it. They get to save costs on transactions like paying a broker to market the property.

Let us help you avoid complications

Dealing with the estate of a decedent can be complicated and fraught with emotional upheavals from administering the estate and dealing with grieving beneficiaries. It helps to have expert help within your reach as early as possible. Contact Attorney Jimmy Wagner at 929-477-8889 for help today.