Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for advice about your situation.
Detailed Answer
When a decedent’s estate lacks sufficient cash to pay valid creditor claims, a personal representative (executor or administrator) may need to convert real property into cash. Under New Hampshire law, this requires petitioning the probate court for authorization and following statutory procedures.
1. Open Probate and Appoint a Personal Representative
File a petition for probate in the county probate court where the decedent resided. The court issues Letters Testamentary (if there is a will) or Letters of Administration (if intestate). This empowers the representative to manage estate assets, including real property.
2. Inventory and Appraisement
Within 30 days of appointment, the personal representative must file an inventory of all assets, including real estate, under RSA 556:4 https://www.gencourt.state.nh.us/rsa/html/XXXIII/556/556-4.htm. Obtain an appraisal or court-approved value for the property.
3. Notice to Creditors and Heirs
Publish notice to creditors under RSA 556:2 https://www.gencourt.state.nh.us/rsa/html/XXXIII/556/556-2.htm and send written notice to known creditors, heirs, devisees, and the surviving spouse if applicable. Allow the statutory claim period to expire before distributing assets.
4. Petition the Court to Sell Real Property
If estate assets are insufficient to satisfy debts, file a petition under RSA 556:8 https://www.gencourt.state.nh.us/rsa/html/XXXIII/556/556-8.htm. The petition must:
- Describe the property and its value.
- Explain why sale is necessary to pay debts, administration costs, or legacies.
- Propose sale terms (public auction or private sale, minimum bid).
5. Court Hearing and Order
The court sets a hearing notice and reviews the petition. If it finds sale appropriate, it signs an order authorizing the sale, subject to any conditions (e.g., confirmation of sale price).
6. Sale and Reporting
The personal representative conducts the sale according to the court order. After closing, file a report of sale and an accounting under RSA 556:9 https://www.gencourt.state.nh.us/rsa/html/XXXIII/556/556-9.htm. Proceeds become estate funds.
7. Paying Claims and Distributing Proceeds
Use sale proceeds to pay valid claims and administration expenses in priority under RSA 556:13 https://www.gencourt.state.nh.us/rsa/html/XXXIII/556/556-13.htm. Any surplus is distributed to beneficiaries or heirs per the will or intestate succession (RSA 561).
Helpful Hints
- Confirm property ownership: Joint tenancy or beneficiary deeds may pass outside probate.
- Obtain professional appraisals to support court petitions.
- Keep detailed records of notices and sale steps for court review.
- Coordinate with title companies to clear liens before sale.
- Consult an attorney early to avoid procedural delays.