Real Property as Sole Estate Asset – is Probate Required?
Joe’s parents both died this year. Real property is the sole estate asset. Indeed, the only asset in their estate was their family home. Real Estate was the Sole Estate Asset. His parents left a Last Will and Testament. Joe has been staring at this Will and wondering whether he needs to file for probate. He heard that he may not have to probate when real property is the sold estate assets.
Technically, under New York State law (Surrogate’s Court Procedures Act Article 19), property vests in the decedent’s heirs or legatees at the decedent’s death. As such, Joe technically is vested with title to the house immediately upon the death of the last parent. With real estate as the sole estate asset, it vests in the beneficiaries or distributees by operation of law.
While Not Required, Joe May Still Decide to Probate When Real Property is Sole Estate.
Although Joe does not need to probate the surviving parent’s Will in order to commence ownership of the real property, Joe may face issues if he wants to sell the property in the future. This is because in order to sell the property, the purchaser will want to make sure that Joe can render good title. The purchase will typically run a title report. The purchaser will also want to procure title insurance. Title insurance will protect the purchaser in the event that another party comes along claiming that the house was somehow wrongfully conveyed to the purchaser.
Before issuing title insurance, title companies will want to be sure that the seller is indeed qualified to pass the property. Title companies will want proof that the seller is qualified to sell the property.
How Does Joe Prove that He Has Authority to Convey Title to the Real Property?
There are three options for a seller to satisfy the title company.
- The best form of proof would be an Executor’s or Administrator’s deed. Obtaining an Executor’s or Administrator’s deed, however, would mean that Joe would have to file for probate or administration. Indeed, Joe would need to file a petition for probate or administration, obtain letters testamentary, or letters of administration, and then sign a deed and related tax forms transferring the property from Joe’s parent’s names to Joe, as Executor, or Administrator of the Estate. This can be a costly a process, and not ideal especially for Joe, who may possibly be the sole surviving beneficiary and executor.
- The second form of proof can be a Court Order. When the sole property in the estate is a parcel of real property, the estate’s personal representative can file a petition, pursuant to Article 19 of the Surrogate’s Court Procedure Act, seeking court approval to sell the parcel. Filing an Article 19 petition would theoretically save Joe from having to file for probate or administration. It would also save Joe from having to transfer the property to the name of the Estate. Joe would, in lieu thereof, just file a petition for sale. If the Court granted the petition, Joe could execute one deed conveying the property from his parent’s name to the purchaser.
- The third way to satisfy the title company would be with an heirship affidavit. Under this method, Joe, or a disinterested person that Joe knows, would write an Affidavit to the title company stating that Joe is qualified to pass valid title. This may pose the most risk for a title company because the Affidavit, while notarized, is not backed by a Court of competent jurisdiction.
While all three options are technically valid, one should contact a title company to understand its preferred practices and whether the title company will be satisfied with a mere heirship affidavit, or whether, they will want something from the Court.
Additional resources provided by the author
For more information, please contact probate and estate planning attorney Regina Kiperman:
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New York, NY 10038
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