A loved one has passed away, you have been named executor, and one of the largest assets connected to the estate is a house.
Maybe no one in the family wants to keep it. Maybe the property is sitting vacant while mortgage payments, taxes, insurance, utilities, and maintenance continue to add up. Or perhaps the beneficiaries agree that selling makes sense but are unsure whether you can put the house on the market before probate is finished.
In New Jersey, a properly appointed executor can generally have authority to sell real estate that is subject to estate administration. But before listing a house for sale, you still need to consider how the property is titled, what the will says, and the circumstances of the estate.
Before deciding what happens to a loved one's home, it helps to understand what being executor actually allows you to do.
When Can You Sell a House as Executor in New Jersey?
Being named executor in a will and having legal authority to act for the estate are not the same thing.
After a person dies, the will generally must be admitted to probate, and the named executor must qualify through the Surrogate's Court in the county where the person was domiciled. Once appointed, the executor receives Letters Testamentary, which provide evidence of the executor's authority to act on behalf of the estate.
New Jersey law gives a personal representative substantial authority over estate property, subject to any contrary or limiting provisions in the will or a court order. That authority can include taking control of property, protecting and maintaining it, paying appropriate expenses, and, when the property has not been specifically disposed of, selling real estate on behalf of the estate.
But that authority does not allow an executor to treat estate property as personal property. An executor is a fiduciary and must administer the estate according to the will, New Jersey law, and the interests of those entitled to the estate.
That distinction becomes especially important when the estate includes a house.
What If the House Was Jointly Owned?
Before assuming that an executor has authority over a house after the owner's death, it is important to determine how title was held.
A deed can matter just as much as the will.
For example, when property is validly owned with another person under a form of ownership that includes a right of survivorship, the deceased owner's interest generally passes to the surviving owner rather than through the probate estate. Property held in a trust presents a different ownership question.
That means an executor should not assume that every house associated with a loved one automatically becomes property the executor can sell.
Reviewing the deed, the estate plan, and the circumstances surrounding ownership helps determine who owns the property after death and what legal steps are required before it can be sold or transferred.
Does the Will Say What Should Happen to the House?
One of the first documents to review is the will itself.
Some wills expressly give the executor broad authority to sell estate property. Others specifically leave a house or other real estate to a particular beneficiary.
That distinction matters. New Jersey's general statutory power allowing a fiduciary to sell estate real property does not apply in the same way when the property has been specifically disposed of by the will. If a loved one specifically left the house to someone, the executor should review the will and the estate's circumstances before taking steps toward a sale.
The estate can also face valid debts, taxes, administration expenses, or other obligations that need to be addressed. Those obligations can complicate matters when beneficiaries expected a particular property to remain in the family.
This is why the decision to sell should begin with the will and the estate's financial picture, not with a listing agreement.
Does an Executor Need the Beneficiaries' Permission to Sell?
Not in every case.
A properly appointed New Jersey executor can have authority to sell estate property without obtaining the consent of every beneficiary or first obtaining a court order. The scope of that authority still depends on the will and the circumstances of the estate.
That does not mean the beneficiaries' interests can be ignored. The executor should therefore make decisions about the property for the benefit of the estate, not for personal convenience or personal gain.
For example, accepting an unusually low offer simply to complete the sale quickly could raise questions about whether the executor acted prudently. A transaction involving the executor, a close relative, or another potential conflict of interest can create additional concerns and may require greater scrutiny.
Disagreement among beneficiaries can also change what otherwise might have been a relatively straightforward transaction.
If one beneficiary wants the house sold while another believes it should be retained or transferred, the answer may depend on the will, ownership of the property, the needs of the estate, and other facts. In some disputes, court involvement may ultimately become necessary.
What If the House Has a Mortgage or Other Expenses?
A loved one's death does not make the financial obligations connected with a house disappear.
While the property is subject to estate administration, there may still be mortgage payments, property taxes, homeowners insurance, utilities, repairs, association fees, or other carrying costs.
An executor's fiduciary responsibilities include appropriately managing, protecting, and preserving property subject to the estate administration. As executor, you need to determine which payments must continue, whether adequate insurance remains in place, whether the property needs to be secured or maintained, and how those expenses will be paid while the estate is being administered.
If the house is eventually sold, mortgages and other liens affecting the property generally must be addressed as part of the transaction before the remaining proceeds can become available to the estate.
For an executor already handling bank accounts, creditor claims, tax matters, and questions from family members, these additional responsibilities can be one reason selling a house becomes a significant part of the probate process.
At Cohler Law, we help executors in Voorhees and throughout South Jersey work through the estate administration and property issues that need to be addressed before a sale moves forward.
What Happens Once the Estate Is Ready to Sell the House?
Once you have authority to proceed and determine that selling the house is appropriate for the estate, the transaction still has to move through the ordinary legal and practical steps involved in a New Jersey real estate sale.
The contract must be addressed, title issues need to be identified, mortgages or other liens must be handled, and the person signing documents on behalf of the estate must have authority to complete the transaction.
That overlap between probate and real estate transactions is why identifying estate, tax, and title issues early can help address potential problems before a buyer is involved.
For executors in Voorhees and throughout South Jersey, the important question is not simply whether an executor can sell a house. It is whether the executor has authority to sell this particular property, under this will, in this estate, at this point in the administration process.
What Happens to the Money After the House Is Sold?
Selling the house does not mean the executor receives the proceeds personally or that the beneficiaries can immediately divide the money.
When estate property is sold, the net proceeds are handled as part of the estate. The executor must account for estate expenses, valid creditor claims, taxes, and other obligations before distributing the remaining estate according to the will and applicable law.
New Jersey's inheritance-tax lien and tax-waiver rules can also affect the transfer of real estate owned by someone who has died. New Jersey generally imposes a transfer-inheritance-tax lien on property owned by a decedent, and a tax waiver may be required to release that lien and complete the transfer of New Jersey real estate. Exceptions apply depending on how the property was owned and the circumstances of the transfer.
Depending on the estate and the beneficiaries, obtaining the required waiver may involve filing an inheritance-tax return or another form with the New Jersey Division of Taxation. These requirements are best addressed while preparing the property for sale rather than discovering a tax or title issue when a buyer is already waiting to close.
Questions About Selling a House During a New Jersey Estate Administration?
Administering a loved one's estate can require you to make important financial and legal decisions while you are also dealing with the loss itself. When a home is part of the estate, understanding what needs to happen before a sale can make those responsibilities easier to navigate.
At Cohler Law, we help executors and families in Voorhees and throughout South Jersey navigate the probate and estate administration responsibilities that arise when a loved one's estate includes real property.
If you are administering a New Jersey estate that includes a house or other real estate, contact Cohler Law to discuss the property, the probate process, and the steps involved in moving the estate forward.
Use our contact form to schedule a consultation with a Voorhees estate administration attorney.
Disclaimer: Results may vary depending on your particular facts and legal circumstances. The articles on this blog are for informational purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.