Bringing Real Property into the Estate to Pay Claims under New York Law
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult an attorney for guidance specific to your situation.
Detailed Answer
When a decedent owned real property solely in their name, the executor or administrator must follow specific steps in Surrogate’s Court to include that property in the estate’s assets and use its value to pay valid claims. Below are the key actions under New York law:
- Open the estate: File the original will (if any) or a petition for letters of administration with the Surrogate’s Court in the county where the decedent lived. See SCPA Art. 3 (SCPA Article 3).
- Obtain letters: After the court admits the will or grants administration, you receive Letters Testamentary or Letters of Administration authorizing you to act for the estate.
- Transfer title: Record a certified copy of the Letters with the county clerk. This executor’s (or administrator’s) certificate creates legal title in the estate. See EPTL §9-1.1(d) (EPTL 9-1.1(d)).
- Inventory and appraisal: Prepare and file an inventory listing all real property and its fair market value as of the date of death per SCPA §2112 (SCPA 2112).
- Notify creditors: Publish a notice to creditors in a local paper and mail direct notice to known creditors under SCPA §1802 (SCPA 1802).
- Petition for sale: If estate funds or personal property won’t cover debts, file a petition under SCPA §102 asking the court to order sale of real property (SCPA 102).
- Sell the property: Conduct a public auction or private sale as the court directs. Apply net proceeds to pay valid claims and distribute any remainder to beneficiaries.
Helpful Hints
- Start probate promptly to avoid delays in creditor deadlines.
- Hire a local real estate attorney to prepare and file the transfer documents accurately.
- Use a qualified appraiser to establish fair market value on the date of death.
- Keep detailed records of all notices, publications and court filings.
- Check for non-probate transfers (joint tenancy, trusts) that may bypass this process.