Transferring property after someone dies can be challenging. When a person dies in New York, their entire estate must be dispersed according to the instructions in their will, living trust, or intestacy laws. If the deceased person, also called the decedent, didn’t leave a will, or set up a trust, then the probate court must determine who receives any assets subject to probate. This may require selling a house to meet the deceased’s wishes.
You may be trying to understand what happens when a house is sold through probate. Selling a house through probate in the most efficient manner can be complicated. Our experienced New York probate attorney at the Law Office of Andrew M. Lamkin, P.C., can assist you through the entire probate process, explain your legal options, and discuss your concerns about how to sell a house in probate. Contact us today.
You are viewing: What Happens To A House During Probate
What Is Probate?
Probate laws in New York require most estates to go through the New York probate process. Only tiny estates have the option of avoiding probate through small estate administration. If an estate includes a house, the estate will likely go through probate.
Probate is a legal process that allows the deceased’s heirs, beneficiaries, and creditors to receive their share of an estate. A will appoints an executor to handle this process. If there is no will, the court will appoint an administrator. The executor or administrator locates and inventories the assets of an estate. Then, the court legally transfers their titles to the specified recipients. The probate process allows beneficiaries to legally obtain the financial and physical assets promised in a will. In addition to distributing assets, the probate process settles any of the deceased’s debts.
The probate process in New York is highly variable. It may be a lengthy process lasting from several months to years. It all depends on several factors, including:
- The complexity of the estate,
- The family relationships,
- The instructions left by the decedent, and
- Whether the executor objects to any claims by creditors.
Disputes between heirs or between the estate and creditors lengthen the probate process.
Read more : What Is A Preliminary Title Report
Real estate can add to the complexity of an estate administration. In estates with considerable assets, including a primary residence and other real property, it may be in the best interests of the estate and the beneficiaries to sell certain assets.
What Happens to a House During Probate?
In New York, executors and administrators have broad power to manage an estate and take necessary steps to distribute assets to beneficiaries. A house is often the largest probate asset in an estate. When a house owned by the decedent enters probate, it can be distributed to heirs in a few ways, such as:
- Transferring the property in probate to the heirs named in the will;
- Conveying the property to the surviving spouse, children, or next of kin where the deceased did not leave a will; or
- Selling the property to meet the deceased’s wishes or pay their debts.
When a house enters probate, the executor can sell the home. Under New York law, the executor can sell the property if the terms are in the estate’s best interest. Under normal circumstances, an executor does not need court approval to sell a home unless the will or a court order prohibits the sale.
When Is Selling a House in the Best Interest of the Estate?
Generally speaking, there are a few reasons an executor may conclude that it’s in the estate’s best interest to sell the home.
The Will Directs a Sale
Sometimes a decedent’s will directs that the executor sell the house. In that case, the executor has to follow the decedent’s directions to sell the house. Following the decedent’s wishes are typically in the estate’s best interest.
To Pay the Estate’s Debt
When an estate does not have enough cash to pay the decedent’s debts, the executor may be required to sell assets to raise money. A home sale may be necessary when the estate’s debt is exceptionally high. In New York, where property values are among the highest in the country, selling the house could raise funds needed to satisfy the estate’s debts.
The Beneficiaries Want to Sell the House
Read more : What Goes With Bourbon
If the will designated a person to receive the house, but they do not want it, the executor may sell the home with the recipient’s permission. This scenario typically occurs when the will designates multiple people to inherit the house who are not interested in co-owning the home.
Options When Selling a New York Home in Probate
What happens when a house is sold in probate? Several options are available to the executor when selling a New York house in probate. For example, the executor can sell the home in a fair, open market transaction, including selling to a cash buyer, a flipper, or investors.
However, suppose the will designates two or more beneficiaries for the house, and one does not want to sell. In that case, those who want to sell the house must start an action in court. If the parties can reach an agreement to sell, the executor can engage a real estate broker and split the sale proceeds.
Typical Real Estate Sale Procedure for Property in Probate
The sale of the home must comply with probate laws in New York. If permission is required to list the property for sale, the executor must petition the court. Once the executor receives approval, they can list the property and follow a bidding procedure. If the executor accepts an offer, they must return to court for approval.
The judge will typically allow others to make a bid against the property. This step enables family members to make a good-faith purchase if an executor attempts to exclude them from the sale. Once the sale occurs and the executor pays the debts, the executor distributes sale assets to the beneficiaries. Due to the complexity of the process and the potential risks for an executor, getting help from a skilled probate attorney can go a long way.
Contact an Experienced Long Island Probate Attorney
If you have questions about selling a house in probate, contact an experienced probate administration attorney to discuss the matter. The Law Office of Andrew M. Lamkin, P.C. can help. Andrew M. Lamkin has years of experience working closely with beneficiaries, heirs, and executors on New York estate planning and probate administration matters. Contact our office by phone or online to schedule an appointment.
Source: https://t-tees.com
Category: WHAT
