A brownstone in Brooklyn has been in the family for three generations. When the owner passes, her three children—one in Manhattan, one in Florida, and one in California—inherit it together. The Florida sibling wants to sell for the cash. The California sibling wants to renovate and rent it out. The one in Manhattan, attached to the home, is not sure what to do. Before they can act, one question must be answered: who legally has the authority to sell the property?
This scenario is common. After a loss, families must confront the practical realities of managing a significant asset. The assumption that the oldest child, or the one named in the will, can simply call a real estate agent is a frequent and costly mistake. In New York, the authority to sell inherited property is not automatic. It is a legal status granted by a court or a specific legal document.
The Executor’s Power Comes from the Court, Not the Will
Many believe that being named executor in a will immediately grants the power to sell estate assets. This is false. A will only nominates a person for the role. The actual authority comes from the Surrogate’s Court.
The will must first be submitted to the court in a process called probate. The court reviews the will for validity, formally appoints the executor, and issues a document called Letters Testamentary. These “Letters” are the legal proof of the executor’s authority to act for the estate. Without them, an executor cannot open an estate bank account, pay the decedent’s final bills, or sign a contract to sell real estate. Any attempt to do so is void.
This process is not instant. Probate can take months, and during that time the property must be maintained. Insurance, property taxes, and utility bills must be paid. These carrying costs create pressure among beneficiaries, but proceeding without the court’s official sanction can lead to personal liability for the nominated executor.
When the Will or the Law Restricts a Sale
Even with Letters Testamentary, an executor’s power is not absolute. Their primary responsibility is a fiduciary duty to the estate and its beneficiaries. They must act in the estate’s best interests, following the will’s instructions and the law.
A will may contain specific instructions about real property. A parent might grant a child the right to live in the home for years or grant someone a “life estate.” The will might direct the property into a trust for a grandchild. The executor is bound by these terms. If an executor ignores these provisions and sells the property, they can be held personally liable for breaching their fiduciary duty.
If the will is silent on the power to sell, the executor may need to seek court permission. New York’s Surrogate’s Court Procedure Act (SCPA) Article 19 governs the disposition of real property. It details when an executor can petition the court for an order to sell, mortgage, or lease a decedent’s real estate. This formal proceeding provides clarity and protects the fiduciary from future claims.
The Critical Difference Between a Will and a Trust
The entire probate process I’ve described applies to property passed through a will. If the decedent was prudent and placed the property into a trust during their lifetime, the rules are entirely different. Stewardship changes.
When property is held in a trust, it is not part of the probate estate. It is controlled by the trust document and managed by a trustee, not an executor. The trustee’s authority to sell is defined within the four corners of that trust agreement. There is no need to go to Surrogate’s Court for permission.
The trustee can act much more quickly than an executor because they do not wait for court approval. Their duty, however, remains the same: a strict fiduciary obligation to manage the trust assets for the beneficiaries. A well-drafted trust provides clear instructions, minimizing disputes and streamlining the process of managing or selling the property.
This is one of the most powerful reasons my clients and I work to create trusts. It allows them to maintain control and make the transfer of their legacy as seamless as possible for the next generation.
Before You List the Property
Once legal authority is established, the executor or trustee must take several deliberate steps before putting a “For Sale” sign on the lawn.
First is a formal appraisal. A fiduciary must understand the fair market value of the property to fulfill their duty. Selling a multi-million-dollar property for a fraction of its worth to achieve a quick sale would be a catastrophic breach of that duty.
Second, consider the tax implications. Inherited property receives a “step-up” in basis to its fair market value on the date of the owner’s death. This is a significant tax benefit that can reduce or eliminate capital gains tax when the property is sold. Understanding this is crucial for the estate and the beneficiaries.
Finally, the fiduciary must communicate. While the executor or trustee holds legal authority, keeping beneficiaries informed about appraisals, offers, and timelines can prevent misunderstandings and future litigation. Transparency is a cornerstone of prudent estate administration.
If you are responsible for an inherited property, the first step is to clarify your legal standing. Before making promises to family or real estate agents, the foundational legal documents must be reviewed. We often begin by examining the will, the property deed, and any court filings to establish who has authority and what the most prudent path forward is for the estate.
