The power of a fiduciary representative depends on the terms of a decedent’s last will and testament. If a decedent’s will does not expressly deny sale of real estate and other assets, an executor or trustee can sell the property without the consent of beneficiaries or probate proceedings. Federal and state laws of probate can sometimes prohibit estate liquidation of real property assets belonging to a decedent if there is no will present. In such case, probate court review of an estate is required. Planned giving specialists will be interested in the possibilities probate liquidation sales afford nonprofit charitable giving plans.
No will contestation or other probate cases where no will is present, are subject to appointment of an administrator for distribution of estate assets to proceed. Appointed fiduciaries are responsible for the liquidation of the decedent’s financial assets such as stocks, bonds, bank accounts, and sale of real estate. Proceeds are subsequently deposited into the estate’s trust for distribution after the dissolution of creditor claims, legal fees, and any other expenses are satisfied.
Court fiduciary appointment of an estate is performed by way of probate petition, which must be filed with the original estate documentation, followed by service of summons notice of all inheritors. Once appointed, fiduciaries have the duty and authority to oversee estate’s transactions, including real property liquidation and other asset final sales. Real estate sale closing must be approved by the probate court in oversight of the estate matter. The court maintains record of all estate and will testamentary documents, and letters of administration.
The court can require short sale of real estate to pay off mortgage lender or other creditor attachment at the time of a decedent’s death. Short sale generally means accepting less than the full market value of a mortgaged property for purposes of conveyance. Selling real property assets below fair market value by way of short-sale transaction is a common liquidation method pursued by probate court administrators, though not always in the best interests of an estate’s inheritors. Some states apply special provisions to probate liquidation of estate real property. The New York Consolidated Laws, Real Property Law – RPP § 463. Exemptions provides that property condition disclosure “shall not be required in connection with” transactions of estate or trust properties. Under New York estate rules, fiduciaries are “exempt” from any obligation to notice inheritors in such circumstance.
Estate laws afford beneficiaries the opportunity to challenge probate decision. Contestation of a short-sale intended to pay-off a foreclosure lien or creditor attachment is a right of heirs, however, liquidation is meant to reduce the probate term. In most states, fiduciaries are acting in concert with a probate court decision. The court supervision relationship protects an administrator from liability. Court notice is normally required to ensure that a fiduciary initiated short-sale transaction is not a breach of duty. The court will determine if the sale is in the best interest of the estate’s heirs.
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Probate court appointment of a fiduciary administrator to manage the liquidation of real property and other trust assets assigned mortgage or tax lien, or other creditor attachment.
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