When Can We Sell the Real Estate? The MUPC in a Nutshell

Print Friendly, PDF & Email

Author:
Amanda Zuretti, Esq., CATIC

Although Massachusetts estate planners and family law practitioners are familiar with M.G.L. c. 190B, the Massachusetts Uniform Probate Code (“MUPC”), as a result of the statute’s guardianship provisions having taken effect on July 1, 2009, real estate conveyancers are just beginning to appreciate the MUPC’s impact on real estate practice resulting from the reforms that took effect on March 31, 2012.

Prior to March 31, 2012, the language (and practice norms) regarding sale of real estate from a decedent’s estate seemed clearer: real estate that was a probate asset could only be conveyed once the “estate ha[d] been officially administered and the creditors’ claims [were] either satisfied or barred.” [1] Real estate conveyancers knew that the fiduciary of an intestate decedent was an “administrator” who had no authority to convey real estate without a license to sell pursuant to M.G.L. c. 202, and that the fiduciary of a testate decedent was an “executor” who had authority to sell real estate (upon allowance of the Will) provided that power of sale was contained within a Will.

The MUPC’s introduction of informal and formal probate proceedings [2] initially caused disagreement among real estate practitioners as to what would be needed to “officially administer” an estate, and confusion as to whether probate petitions filed prior to March 31, 2012 would have to be refiled in order to comply with the MUPC. Because a formal proceeding (M.G.L. c. 190B, §3-401) may be commenced (and may supersede) an informal proceeding (M.G.L. c. 190B, §3-302) at any time up to three years from the filing of a petition for informal probate, real estate practitioners and title insurers disagreed as to whether and when real estate that is a probate asset could be conveyed, and when a license to sell real estate might be required.

In addition, the replacement of “administrator” and “executor” with the neutral term “personal representative” (M.G.L. c. 190B, §1-201) caused confusion because “personal representative” applies to the fiduciary of both testate and intestate decedents’ estates, making it impossible to know by reference to the term alone if a decedent died testate or intestate, and/or if the probate was commenced in an informal or formal proceeding.

Fortunately, however, the Probate and Family Court provided a comprehensive procedural guide to orient practitioners to the filing requirements under the MUPC. Also available are transitional Standing Orders and forms applicable to matters begun prior to the effective date of the MUPC which remained pending as of March 31, 2012.

Real estate practices for conveyance of real estate from a decedent’s estate under the MUPC have emerged from the Real Estate Bar Association in the form of new REBA Title Standard No. 78, in conjunction with Title Standards No. 10, 14, 36, 41, 43, 50 and 71 as revised May 7, 2012.

The new and revised Title Standards clarify that a personal representative has authority to convey real estate that is a probate asset under the following conditions:

1. Only with license to sell real estate pursuant to M.G.L. c. 202 if decedent died intestate (regardless of whether the proceeding is formal or informal).

2. Only with license to sell real estate pursuant to M.G.L. c. 202 if decedent died testate decedent (regardless of whether the proceeding is formal or informal) if there is no power of sale in the Will.

3. Without license if decedent died testate and petition for probate is made in a formal proceeding and there is power of sale in the Will.

A trap for the unwary is that the revision of the rules of intestate succession (M.G.L. c. 190B, §3-302) now ties decent and distribution of interest in a decedent’s estate to the date of the decedent’s death. In other words, the estate of an intestate decedent whose date of death is prior to March 31, 2012 is controlled by the long-established rules of descent and distribution set forth in M.G.L. c. 190, §3, where the calculation of intestate shares flows per stirpes. By contrast, the estate of an intestate decedent who passed away on or after March 31, 2012 is controlled by the rules of descent and distribution set forth in M.G.L. c. 190B, §201 et. seq., which introduces the more modern calculation of intestate shares per capita at each generation. For a concise discussion of the new regime for intestate succession, Jennifer A. Maggiocomo’s “Introduction to the Massachusetts Uniform Probate Code” is essential reading.

With regard to the MUPC’s new recording requirements for deeds of distribution (M.G.L. c. 190B, §3-908), letters of conservator (M.G.L. c. 190B, §5-420), and disclaimers of property interest (M.G.L. c. 190B, §2-801) probate attorneys will play an important role in guiding real estate attorneys as the need arises until new real estate conveyancing practice norms take hold.

Although real estate attorneys are quickly integrating many of the new provisions of the MUPC, M.G.L. c. 190B, §3-108, which creates a presumption of intestacy if a decedent’s Will is not submitted to probate within three years of the date of death continues to generate discussion. Prior to the MUPC, a Will could be submitted to probate within 50 years of the decedent’s death, and thereafter for cause, and clearing title to real estate that had been held in a family for several generations sometimes required filing Wills for commencing title curative probate actions years or even decades after a decedent’s passing. The concern among real estate attorneys is that the MUPC in its current form introduces uncertainty into heretofor accepted conveyancing practice.

It is hoped that technical corrections [3] to M.G.L. c. 190B filed January 24, 2011 by Sen. Cynthia S. Creem as S. 00704 will soon be enacted to clarify certain provisions of the current MUPC. Senator Creem’s Bill revises the existing M.G.L. c. 190B, §3-108 (4) and introduces an additional subsection (5), which reads as follows:

(4) an informal appointment or a formal testacy or appointment proceeding may be commenced thereafter if no proceedings concerning the succession or estate administration has occurred within the 3 year period after the decedent’s death, but the personal representative has no right to possess estate assets as provided in Section 3-709 beyond that necessary to confirm title thereto in the successors to the estate and claims other than expenses of administration may not be presented against the estate; and (5) a formal testacy proceeding may be commenced at any time after 3 years from the decedent’s death for the purpose of establishing an instrument to direct or control the ownership of property passing or distributable after the decedent’s death from one other than the decedent when the property is to be appointed by the terms of the decedent’s will or is to pass or be distributed as a part of the decedent’s estate or its transfer is otherwise to be controlled by the terms of the decedent’s will. These limitations shall not apply to proceedings to construe probated wills or determine heirs of an intestate. In cases under (1) or (2) above, the date on which a testacy or appointment proceeding is properly commenced shall be deemed to be the date of the decedent’s death for purposes of other limitations provisions of this chapter which relate to the date of death.

Enactment of this technical correction will permit informal or formal appointment of a personal representative, and the formal filing of a will (if any), so as to transfer real estate includable in an intestate or testate decedent’s probate estate to the decedent’s heirs or devisees even if more than three years have passed from the decedent’s date of death.

—————————-

[1] Belknap, Thomas H., Newhall’s Settlement of Estates & Fiduciary Law in Mass. 7 (5th ed. 1994 & 1997 Supp.).

[2] M.G.L. c. 190B, §§3-302 and 3-401.

[3] For more on the technical corrections contained in S. 00704, see Mark A. Leahy, Esq.’s excellent outline and commentary on the MUPC.

—————————-

The Boston Bar Association Trusts & Estates Section Blog provides information as a service to its users and BBA members. Neither the Trusts & Estates Section nor the Boston Bar Association are a law firm and do not represent clients in any way. Although the information on this site is about legal issues and informational services it is not legal advice. Use of this blog does not in any way create a lawyer-client relationship. If you need a lawyer, the Boston Bar Association Lawyer Referral Service can refer you to a qualified attorney. http://www.bostonbarlawyer.org/ or call 617-742-0625