What options exist for selling or auctioning personal property to reimburse estate expenses and equalize distributions among heirs?

Detailed Answer

When you serve as a personal representative (executor or administrator) under New Mexico law, you must collect assets, pay debts and costs of administration, then distribute the remainder to heirs. If the estate’s cash is insufficient to cover expenses or if heirs cannot fairly divide certain items, New Mexico’s Probate Code authorizes several sale and auction methods to generate funds and equalize distributions.

1. Court-Ordered Public Auction or Private Sale (NMSA 1978, §45-3-707)

If expenses or debts exceed available liquid assets, you may petition the probate court for an order permitting you to sell personal property at public auction or by private sale. You must file an application describing the assets, the proposed sale method, and a justification that the sale is necessary to pay estate expenses or debts. Upon court approval, you schedule the sale, give advertised notice, and apply the proceeds toward administrative costs, funeral expenses, and creditor claims.

See Section 45-3-707: https://law.justia.com/codes/new-mexico/1978/title-45/chapter-3/article-7/45-3-707.

2. Division or Sale of Personal Property Among Heirs (NMSA 1978, §45-3-1201)

When heirs cannot agree on how to split tangible assets (furniture, artwork, collectibles), the court may appoint commissioners to divide the items “in kind.” If practical division is impossible or unfair, the court orders sale at public auction and directs distribution of the net proceeds according to each heir’s fractional share of the estate.

See Section 45-3-1201: https://law.justia.com/codes/new-mexico/1978/title-45/chapter-3/article-12/45-3-1201.

3. Sale of Intangible Personal Property (NMSA 1978, §45-3-802)

Intangible assets—stocks, bonds, promissory notes, and other choses in action—may be sold upon court order at either public auction or private sale. The petition must describe the securities, the proposed method of sale, and show that proceeds will cover estate expenses or facilitate equal distribution among beneficiaries.

See Section 45-3-802: https://law.justia.com/codes/new-mexico/1978/title-45/chapter-3/article-8/45-3-802.

4. Informal Private Sale by Personal Representative

The probate court may grant authority in the will or through a separate order for the personal representative to sell personal property without a formal auction, provided the sale is at fair market value. This option reduces administrative costs but requires transparent accounting and notice to beneficiaries.

Helpful Hints

• Review the will and any court orders to confirm your authority to sell assets.
• Obtain two or more valuations before sale to demonstrate fair market value.
• Advertise public auctions in local newspapers and online to maximize attendance.
• Keep detailed records: bids, sales contracts, expenses, and distribution calculations.
• Notify all heirs of proposed sales and hearings under NMSA 1978, §45-3-707 and §45-3-1201.
• Consult an attorney if complex or high-value items are involved.