A client from Brooklyn called me last week. Her father had passed, leaving her and her brother the family brownstone. She was named executor in his will and had already found a real estate agent eager to list the property. But when the agent asked for her “Letters Testamentary,” she was confused. She had the original will—wasn’t that enough?
This is a common misconception. In my practice, I see families assume that being named in a will is the final word. A will is a nomination—not a grant of power. The legal authority to act on behalf of an estate, including the power to sell a home, is granted by the New York Surrogate’s Court. Until the court issues those Letters, an executor has no legal standing to sign a listing agreement, a contract of sale, or a deed.
From Will to Authority: The Role of Surrogate’s Court
Before an inherited home can be sold, the will must be admitted to probate. This is the court process for validating the will and officially appointing the executor. We file a petition with the court in the county where the person lived, along with the original will and a death certificate. The court reviews the documents and ensures all interested parties—beneficiaries and next of kin—have been properly notified.
Once the court is satisfied, it issues Letters Testamentary. This one-page, court-certified document is the proof of your authority. It’s what you will show the real estate agent, the title company, and the bank. This process is not a formality; it protects everyone involved. It confirms the will is legitimate, prevents disputes over who is in charge, and establishes a clear chain of title for the property. Without it, a sale cannot move forward.
The Executor’s Fiduciary Duty
Receiving Letters Testamentary is the beginning, not the end, of an executor’s responsibilities. As an executor, you are a fiduciary. The term carries significant legal weight—it means you have the highest duty of care to act in the best financial interests of the estate and its beneficiaries. It’s not your home to sell as you please; you are its temporary custodian.
Stewardship. This duty requires prudence and impartiality. You must take steps to secure a fair market price for the home. This usually involves getting one or more professional appraisals, not just relying on an agent’s initial estimate. It may also mean investing estate funds into necessary repairs that could significantly increase the sale price.
This role can become complicated when beneficiaries disagree. I’ve seen cases where one sibling wants a quick cash sale to get their inheritance, while another wants to hold out for the highest possible offer. As executor, your duty is to the estate as a whole. You must make a defensible, prudent decision, documenting your reasoning and the steps you took to maximize value for all beneficiaries equally.
Debts, Taxes, and the “Step-Up in Basis”
Many people assume that once the house is sold, the money can be divided among the heirs. The proceeds must first be used to satisfy the decedent’s obligations. This includes paying off any mortgage, covering funeral expenses, settling final credit card bills, and paying administrative costs like legal and accounting fees. The home is often the estate’s most valuable asset and the primary source of liquidity to pay these debts.
New York law formalizes this. Under Surrogate’s Court Procedure Act (SCPA) Article 19, an executor can petition the court for the authority to sell real property specifically to pay the decedent’s debts and estate expenses. This statute provides a clear legal framework for liquidating property to make the estate whole.
There is, however, good news regarding taxes—specifically, capital gains tax. When you inherit property, its cost basis is “stepped up” to its fair market value on the date of death. For example, if your parents bought a house for $100,000 decades ago and it’s worth $1.5 million when you inherit it, your basis is $1.5 million. If you sell it quickly for that amount, your capital gain is zero. This critical tax provision saves families from paying taxes on generations of appreciation.
The sale of a family home is often the largest and most emotional transaction an estate will undertake. It requires deliberate action and a clear understanding of your legal role. Before you hire an agent or sign any documents, your first priority must be to secure the legal authority to act. If you have been named as an executor in a will, our first step would be to review the document and prepare the petition for your formal appointment by the Surrogate’s Court.
