Legally reviewed by Edward A. Sundquist - Raimondo & Sundquist LLP

When a loved one passes away, there are often many important legal and financial matters that must be addressed before an estate can be fully settled. One of the biggest concerns people often have involves real estate. Whether the estate includes a family home, a vacation property, a rental property, or vacant land, it is natural to wonder what happens to that property during the estate administration process. Fortunately, there is a process for handling real estate after a person’s death, though exactly what happens will depend on several factors, including how the property was owned and whether the decedent left behind a valid will. Please continue reading and contact an experienced Buffalo estate lawyer from Raimondo & Sundquist LLP to learn more about what may happen to real estate during estate settlement. Here are some of the questions you may have:

Does Real Estate Automatically Go to the Beneficiaries?

The answer is not always. Many people assume that ownership of a home or other real estate automatically transfers to the beneficiaries named in a will immediately after someone passes away. In reality, the property often becomes part of the estate administration process, and certain legal steps may need to be completed before ownership can officially change hands. Some of the factors that may determine what happens to the property are as follows:

  • Whether the decedent left a valid will.
  • How the property was titled.
  • Whether the property was owned jointly with another person.
  • Whether there is a mortgage or other liens against the property.
  • Whether the estate has outstanding debts that must be paid.
  • Whether probate is required.

Generally speaking, if the property is part of the probate estate, the executor or personal representative will typically be responsible for managing it while the estate is being administered. This may include maintaining the property, paying certain expenses, and taking other steps necessary to preserve its value.

Can the Estate Sell the Property?

Depending on the circumstances, it may be necessary or beneficial for the estate to sell real estate before the estate settlement process is complete. For example, the proceeds from the sale may be needed to pay outstanding debts, taxes, administrative expenses, or distributions to beneficiaries. Some of the most common reasons an estate may sell real property are as follows:

  • The will directs that the property be sold.
  • The beneficiaries agree that selling the property is the best option.
  • The estate needs funds to satisfy debts or expenses.
  • Multiple beneficiaries inherit the property and do not wish to own it together.
  • The property is expensive to maintain.

In many situations, however, ownership is ultimately transferred to one or more beneficiaries in accordance with the terms of the will or, if there is no will, under New York’s intestacy laws. The appropriate course of action will depend upon the circumstances surrounding the estate and the wishes of the individuals involved whenever the law allows.

What Should Beneficiaries Know About Estate Real Estate?

If you are expecting to inherit real estate, it is important to understand that the process may take longer than you think. Before property can be transferred, there may be court proceedings, creditor claims, title issues, tax matters, or other legal responsibilities that must first be resolved. Some important things beneficiaries should keep in mind are as follows:

  • Do not assume you can immediately sell or occupy the property.
  • Continue to preserve important records related to the property.
  • Understand that mortgages, taxes, and maintenance expenses may still need to be addressed.
  • Communicate with the executor regarding the status of the estate.
  • Speak with an experienced New York estate attorney.

Ultimately, if you have questions about what will happen to real estate during estate settlement, or if you are serving as an executor or beneficiary of an estate that includes real property, our firm is here to help. Contact Raimondo & Sundquist LLP for an initial consultation today.