Estate sale closing checklist

What are the steps, in order?

1. Determine how title actually passed at death. Property held as tenants by the entirety or with a right of survivorship passes outside the estate and is proved with a death certificate. Property held individually or as a tenancy in common passes through the estate. That answer changes the entire checklist.First
2. Obtain current letters from the Surrogate’s Court. Letters testamentary follow a probated will, letters of administration follow an intestacy. Get a certificate dated within the period the title underwriter will accept, and read the letters for restrictions, because limited letters may not authorize a sale at all.Before listing
3. Confirm the will actually authorizes the sale. Check whether the will grants the executor a power of sale. Where it does not, and where the sale is not needed to pay debts, the fiduciary may need the beneficiaries to join in the deed or an order from the Surrogate. Resolve this before a contract exists.Before listing
4. Address the New York estate tax lien. A New York estate tax lien attaches to a decedent’s real property. The title company will require a release, form ET-117, or a filed ET-30 and proof of payment, or an appropriate affidavit where the estate is below the filing threshold. Start this early, because the Tax Department sets the pace.Weeks before closing
5. Identify every distributee and confirm kinship. On an intestate estate the underwriter needs to know who the distributees are. An affidavit of heirship, the family tree, and death certificates for predeceased relatives are what supports the deed. An unlocated heir is resolved through the Surrogate, not around it.Before contract
6. Search for claims against the decedent and the estate. Judgments docketed against the decedent survive death and remain liens on the property. Search the decedent’s name, every variant of it, and any prior married name, plus federal tax liens and Medicaid claims by the State.Weeks 1 to 3
7. Prepare the executor’s or administrator’s deed. The deed is given in the fiduciary’s representative capacity and the grantor name must match the letters exactly. A deed signed by an individual who is in fact acting as executor is a title defect that has to be corrected later, usually at an inconvenient moment.Closing
8. Confirm the estate is a New York resident for withholding purposes. A nonresident estate files IT-2663 the same as a nonresident individual, and a foreign estate implicates FIRPTA. Determine the estate’s residency status early, because the withholding is calculated from the sale figures and cannot be improvised at the table.2 weeks before closing
9. Deal with occupancy and personal property. A relative still living in the house, a tenant with no written lease, and a house full of contents are all closing problems. The contract should say who delivers the property vacant and by when, and the answer should be settled before the buyer is in contract.At contract
10. File the returns and account to the beneficiaries. After closing, file the transfer tax returns, confirm recording, and preserve the settlement statement for the estate accounting. Sale proceeds belong to the estate account, not to a fiduciary’s personal account.After closing

Which documents do you need?

• Certified death certificate for the decedent and for any predeceased joint owner
• Letters testamentary or letters of administration, certified within the underwriter’s acceptance window
• Copy of the probated will and the Surrogate’s decree
• Executor’s or administrator’s deed naming the fiduciary in representative capacity
• Affidavit of heirship or a family tree affidavit on an intestate estate
• Estate tax release, form ET-117, or the filed ET-30 with proof of payment
• Affidavit of no debts, or the estate’s accounting, where the underwriter requires it
• TP-584 signed by the fiduciary, and the NYC transfer tax return
• IT-2663 where the estate is a New York nonresident
• Consents or joinders from beneficiaries where the will grants no power of sale
• Affidavit of title from the fiduciary covering the estate’s period of ownership

Which searches does this transaction call for?

• Title search through the chain, with particular attention to how the decedent took title
• Surrogate’s Court file search in the county of domicile and in the county where the property sits
• Judgment and federal tax lien search against the decedent under every name variant
• Estate tax lien search and confirmation of the release
• Medicaid and public assistance claim search against the decedent
• Bankruptcy search against the decedent and against the fiduciary
• Tax search for arrears accrued since the date of death
• DOB, OATH (formerly ECB) and HPD searches, which often accumulate on a vacant property
• Patriot search against the fiduciary and the purchaser

What else should you read before closing?