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Problematic deceased estate

New York, NY |

I am the appointed executor of a deceased estate. There is only one fixed asset (apartment) in the estate and one stream of income (the rent paid for the apartment). I have two problems:
1. The real estate is mortgaged by a bank. There is no equity. There is an insurance policy that covers the outstanding mortgage amount, but the insurers refuse to pay out. It will cost litigation, which neither the estate nor I personally can afford, to get this money from the insurers. In the mean time the mortgage on the real estate is not getting serviced and thus the mortgage is now about 4x the value of the real estate! What do I do here?
2. I have a perpetual lease on the same real estate and pay the rent into the estate account every month. How do I calculate my executor fees since I might still be

living in the apartment 20 years from now since the lease automatically renews itself every year?

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Attorney answers 3


You need to get yourself to a lawyer to review the documents. Maybe some real estate attorney will disagree, but my understanding of a lease is that it can't be perpetual. A perpetual lease is a freehold- the lessor would own the property. Are you sure you are not describing a life estate? Meanwhile, if the mortgage is not serviced, the bank will foreclose and you won't have any legal problem at all, or a place to live either. You should be using the rent payments to service the mortgage. As far as the life insurance policy is concerned, you need to get to a lawyer for an opinion whether you can successfully litigate to get payment. If the insurer's refusal is unjustified and you have a strong case, you should be able to hire a lawyer to take the case on a contingency. For advice about the estate, you need an estate lawyer, and you will have to pay an hourly rate.

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I suppose I mean a life estate. In the lease it says it renews automatically every year on its anniversary date. So in my understanding even if the bank wants to foreclose they will have to take me (as tenant) with it if I choose to remain living there (since the tenant's rights comes before the landlord?). If correct it means the rental payments (from me to the estate) will continue and thus the estate will increase- thus my question about calculations.


I would have an insurance law attorney review the situation with you, because the insurance could solve a multitude of problems, if it pays out. The facts of your case will determine the answer and you have not included them in your summary. I would meet with an attorney right away. Best of luck to you!

James Frederick

*** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state.


I agree with my colleagues who have encouraged you to retain an attorney. The life insurance issue needs to be addressed as quickly as possible. If the company can be made to pay out the death proceeds, that should go a long ways towards solving the problems you've described. If, on the other hand, the company is legally justified in refusing to pay on the policy, you may be able to negotiate a "short sale" or "deed in lieu of foreclosure" with the bank. Without knowing more facts, however, I couldn't say which of these options might be better for you.
I realize that good legal advice can be expensive, but the problems you've described are not ones you should try to resolve on your own. If you choose not to hire an attorney, then you should probably consider resigning your position as the Executor of the estate, as you could become personally liable to other estate beneficiaries (if there are any) if the estate is not properly administered.
DISCLAIMER: The foregoing is not intended to constitute legal advice, or to create an attorney-client relationship between us (See paragraph 8 of Avvo Terms and Conditions of Use). It is offered, instead, as general legal information relevant to the issue(s) raised in your question. Legal information is not the same as legal advice (i.e., the application of law to an individual's specific circumstances). If you desire to obtain legal advice, you should retain the services of an attorney to represent you. If you choose to act upon the information provided above without first retaining an attorney, you do so at your own risk.

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