A family in Brooklyn loses their mother. She leaves behind a will, two adult children, and the brownstone she owned for forty years. The will clearly states the children are to inherit everything equally. The problem isn’t the will—it’s the house. One child wants to sell it immediately. The other, who lives out of state, wants to keep it as a rental property. Neither anticipated that before they could do anything, the property would first belong to the estate, and its fate would be overseen by the Surrogate’s Court.
This is a scenario my firm and I have seen countless times. When real estate is part of an estate, it often becomes the most emotionally charged and legally complicated asset to manage. It’s not just a line item on a balance sheet; it’s a home, a collection of memories, and the single largest asset many people will ever own. Handling it correctly during probate is a matter of profound stewardship.
The Executor’s Role: More Than Just Holding the Keys
When a will is admitted to probate, the court appoints an executor—the person named in the will to manage the estate. From that moment, the executor has a fiduciary duty to act in the best interests of the estate as a whole, not for any single beneficiary. For real property, this duty is immediate and practical.
The executor’s first job is to secure and preserve the asset. This means changing the locks, ensuring the homeowner’s insurance policy is updated to reflect that the property is now part of an estate, and keeping up with mortgage payments, property taxes, and basic maintenance. If the furnace breaks in January, it’s the executor’s responsibility to get it fixed using estate funds. Allowing the property to fall into disrepair or, worse, foreclosure would be a breach of that fiduciary duty.
Beneficiaries are grieving and often want quick answers about what will happen to the home. But the executor must be deliberate. The house is an estate asset until all debts are paid and the court authorizes its distribution. Rushing can lead to costly mistakes.
From Appraisal to Asset Distribution
Before any decisions can be made about selling or transferring the property, its value must be formally established. A simple online estimate is not sufficient for the Surrogate’s Court or the IRS. The executor must hire a licensed appraiser to determine the fair market value of the property as of the date of the owner’s death. This value becomes the baseline for estate tax purposes and for ensuring an equitable distribution among beneficiaries.
This appraisal is critical because the house does not exist in a vacuum. It is part of the total estate, which is responsible for satisfying the decedent’s final debts, paying administrative expenses, and settling any estate taxes. Under New York law—specifically Estates, Powers and Trusts Law (EPTL) § 11-1.1—an executor has the power to sell real property to generate the cash needed to meet these obligations, unless the will expressly forbids it.
This can come as a surprise to heirs who assumed they would simply inherit the house outright. If the estate has significant debts and the house is the only major asset, the executor may have no choice but to sell it, regardless of the family’s wishes. Their legal duty is to make the estate solvent first.
When Beneficiaries Disagree
Once the estate’s financial obligations are clear, the conversation can turn to the ultimate fate of the property. This is where human dynamics come into play. It is rare for all beneficiaries to want the same outcome, as the Brooklyn family in our example discovered.
When one heir wants to keep the property and others want to sell, we typically explore a few paths. The most common is a buyout, where the heir who wishes to keep the home secures financing to buy out the others’ shares at the appraised value. This provides liquidity for those who want it while preserving the property within the family.
If a buyout isn’t financially feasible, the beneficiaries might agree to an in-kind distribution, where they all become co-owners. This requires a separate legal agreement outlining responsibilities for taxes, maintenance, and use. It can work, but it also has the potential to create future conflicts.
In the rare cases where no agreement can be reached, an executor or beneficiary may be forced to petition the court for a partition sale. This is a lawsuit that asks a judge to order the property to be sold and the proceeds divided. It is an expensive and often contentious last resort that we work hard to help families avoid. The goal is always to find a prudent, intentional path forward that respects the legacy left behind—not to have it dismantled by litigation.
The probate process for real estate requires patience and a clear understanding of the law. It’s about more than just transferring a deed; it’s about honoring a legacy while fulfilling strict legal duties.
If you have been named an executor for an estate that includes real property, a prudent first step is to schedule a fiduciary consultation to review the will, the property, and the specific obligations you now hold.
