Can I sale a piece of land that belonged to my deceased parents before probate?

03/11/2009 - Category:Wills and Estates - Probate - State: KS #15557

Full Question:

My parents have both passed away. I am Successor-Trustee for their Rev Living Trust. They owned a family farm which has not been distributed as of yet. Can I sell a small piece of acreage to satisfy a debt? What if this piece of land is earmarked for a certain heir if still within the Trust at time of settlement--can I still sell it? This piece of ground is not connected to the original family farm at all. I have two people wanting to build a home on it. It is the easiest piece of land to sell and it would satisfy all creditors.

Answer:

The answer will depend on who owns the land and whether the estate has been probated. For example, if real property is owned by a trust, the terms of the trust document govern the powers of the trustee to sell it. The court may allow the sale of real property in the estate under the statutory conditions below.

When a person dies, their assets are distributed in the probate process. If a person dies with a will, an executor is named to handle the distribution of the estate. If the person dies without a will, the court appoints an administrator to distribute the decedent's assets according to the state's laws of intestacy. In cases where the decedent didn't own property valued at more than a certain amount, which varies by state, the estate may go through a small estate administration process, rather than the formal probate process. To dispose of the real property interests of the decedent, the executor or administrator executes an executor's deed or fiduciary deed.

Joint tenancy is a form of ownership by two or more individuals together that differs from other types of co-ownership in that the surviving joint tenant immediately becomes the owner of the whole property upon the death of the other joint tenant. State law, which varies by state, controls the creation of a joint tenancy in real property. Joint tenancy property passes outside of probate; however, it may be severed so that the property becomes part of one person's estate and passes to that person's heirs. Each joint tenant has an equal, undivided interest in the whole property, and may enter onto, take possession of the whole, occupy, and use every portion of the common property at all times and in all circumstances. All joint tenants, and their spouses, must sign deeds and contracts to transfer or sell real estate.

In the case of a life tenant who holds a life estate, when the life tenant dies, their interest may pass to the remaindermen. Title may also return to the person giving or deeding the property or to his/her surviving children or descendants upon the death of the life tenant--this is called "reversion."

A partition action is a court action to divide property. An action for partition usually arises when a property is jointly owned and there is a dispute as to how to divide property, or in a dispute as to whether property should be sold. One co-owner of real property can file to get a court order requiring the sale of the property and division of the profits, or division of the land between the co-owners, which is often a practical impossibility. Normally, a partition order provides for an appraisal of the total property, which sets the price for one of the parties to buy out the other's half. The partition statutes govern actions for partition of real property, but the partition statutes do not apply to property divisions under the Family Law Act or in other types of cases specifically governed by other statutes. A partition action may be initiated and maintained by any of a co-owner of personal property; an owner of an estate of inheritance, an estate for life, or an estate for years in real property where such property or estate therein is owned by several persons concurrently or in successive estates. Generally, a partition action may be maintained only by a person having the interest in the property, however, an equitable interest, is sufficient to support a partition action. A 'partition in kind' refers to land partitioned conveniently and equitably between or among the owners. Alternatively, it must be sold as a single parcel and the proceeds divided among the owners. If two or more people who own a property as tenants in common or if people who are not married to each other own a property as joint tenants with right of survivorship develop a dispute concerning the property, any owner may bring a partition action with the court to get the property divided between owners. While the lawsuit is pending, all owners will have equal access to and interest in the property. This arrangement applies regardless of whether the mortgage is in one owner's name or the name of all owners.

The following are KS statutes:

59-1410. Sale of realty; conveyance to bona fide purchaser; effect.

(a) The executor or administrator may sell real estate of a decedent

(1) whenever the sale thereof is necessary for the payment of reasonable funeral expenses, expenses of last sickness, wages of servants during the last sickness, cost of administration, taxes, debts, or legacies charged upon such real estate,

(2) whenever it shall be determined by the court that the real estate to be sold is a wasting asset and its retention will be detrimental to the estate and such sale is for the best interests of the estate or

(3) at such other time as the court shall determine is for the best interests of the estate. The proceeds of any such sale which shall be available for distribution shall be distributed to the same persons and in the same shares as if it had remained real estate.

(b) For decedents dying before July 1, 1998, the lien of the state for inheritance taxes shall not extend to any right acquired by a purchaser through any conveyance made pursuant to this section notwithstanding any provision of K.S.A. 79-1569, and amendments thereto, to the contrary.

(c) Every conveyance of real estate of a decedent to a bona fide purchaser, pursuant to the authority of this section, shall transfer such real estate free and clear from liens and claims of all creditors of the decedent of the estate of the decedent and of the heirs, devisees and legatees of the decedent and any such liens or claims shall be transferred to the proceeds of such sale received by the executor or administrator making the same but such transferral shall not affect inheritance tax liens or other tax liens against the estate.

59-1401. Possession of property by executor or administrator; marshaling assets; duties prior to final distribution.

The executor or administrator shall:

(a) Have a right to the possession of all the property of a resident decedent, except the homestead and allowances to the surviving spouse and minor children;

(b) marshal all tangible personal property owned by a resident decedent located in the state of Kansas and all intangible personal property owned by a resident decedent wherever located, either directly or by ancillary administration;

(c) take possession, within six months from the date of appointment, of all tangible personal property located in this state and all intangible property wherever located, to be held, administered and finally distributed as provided by law, but nothing herein shall require an executor or administrator of a resident decedent to take possession of intangible personal property being administered in another jurisdiction, if the court in which such administration is pending refuses to authorize delivery of possession;

(d) pay the taxes and collect the rents and earnings on the property until the estate is settled or until delivered by order of the court to the heirs, devisees and legatees; and

(e) keep in tenantable repair the buildings and fixtures under the executor's or administrator's control and may protect them by insurance. The executor or administrator, alone or with the heirs or devisees, may maintain an action for the possession of the real estate or to quiet title to it.

59-1302. When payment to be made.

If any executor or administrator, within four months after having given notice of appointment, does not have notice of demands against the estate of the decedent which will authorize the executor or administrator to represent it insolvent, the executor or administrator, after the expiration of the four months, may proceed to pay the debts and other items due from the estate, according to their classification. Prior to the expiration of the period of four months, the executor or administrator shall pay the debts and other items if ordered to do so by the court, and the court may require bond or security to be given by the creditor to refund any part of such payment necessary to make payment in accordance with this section after the expiration of the period of four months.

59-1503. Time for distribution.

If at any time prior to final settlement it appears that there is sufficient money to satisfy all the demands against an estate, the executor or administrator, on order of the court, may make payment of legacies and distribution of shares, except that specific legacies shall be first satisfied. If any demands are not yet barred or six months have not passed since the date of death, no executor or administrator shall be compelled to pay legacies or make distribution unless ordered to do so by the court and until bond or security is given by the legatee or distributee to refund the legatee's or distributee's due proportion of any demand which may afterward be established against the estate and the cost of its recovery, except that upon petition of the executor or administrator, or upon petition of a legatee or distributee with the approval of the executor or administrator, the court may waive the requirement that bond or security be given by the legatee or distributee. Notwithstanding the foregoing provisions of this section, whenever any executor or administrator of an estate has been served prior to settlement with an order of garnishment having the effect of attaching and creating a first and prior lien upon any property or funds within the estate to which any person is or may become entitled as a legatee or distributee upon settlement and distribution of the estate, the executor or administrator shall not deliver or pay over any such property or funds to that legatee or distributee until further order of the court from which the order of garnishment was issued.

Please see the information at the following links:

http://definitions.uslegal.com/l/letters-testamentary/
http://definitions.uslegal.com/p/probate/
http://lawdigest.uslegal.com/estate-planning/probate-and-executors/
http://definitions.uslegal.com/e/executors-and-administrators/
http://definitions.uslegal.com/f/fiduciary-deed/
http://definitions.uslegal.com/i/intestate/
http://definitions.uslegal.com/s/small-estates/
http://definitions.uslegal.com/j/joint-tenancy/
http://definitions.uslegal.com/p/partition/

Please see the forms at the following links:

http://www.uslegalforms.com/ks/KS-SDEED-6.htm
http://www.uslegalforms.com/ks/KS-59-2210-1.htm
http://www.uslegalforms.com/ks/KS-BM-314-07.htm
http://www.uslegalforms.com/ks/KS-BM-314-01.htm
http://www.uslegalforms.com/ks/KS-BM-315-34.htm
http://www.uslegalforms.com/ks/KS-BM-315-38.htm

03/11/2009 - Category: Probate - State: KS #15557

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