Inheriting Real Estate and Co-ops in New York

Are you about to inherit real estate or a cooperative apartment in New York? If so, you may have questions about ownership of the property, or what is called title.

You may wonder: Are you automatically the owner of a house, condo, or co-op when someone dies? Does the will need to be probated? What if there is no will? What if your loved one had a trust?

This article gives an overview of how beneficiaries of an estate in New York can inherit real property and co-ops.

The first question in the analysis is whether the property is real property (a house or condo) or a co-op (shares in a cooperative corporation), which are personal property. The law treats co-ops differently than real property for most purposes.

Inheriting Real Estate

To determine how real estate is inherited – whether probate or a new deed is required – depends on how the beneficiary takes title.

Life Estate

A person who owns real property may give a life estate to another person in order to avoid probate and administration, which requires court supervision, and which can be an expensive and long process.

The owner of the real property during life is called the life tenant. In the deed or the will, the life tenant gives a life estate to another person, known as the remainderman. When the life tenant dies, the remainderman automatically inherits.

If the life estate is created in a deed (called a “conveyance”), the remainderman inherits automatically. If the life estate is created by will (called a “devise”), the will needs to be probated in order for the remainderman to inherit.

Joint Tenants and Tenants by the Entirety

Real property can be titled in a number of ways. If real property is titled as a joint tenancy with rights of survivorship, or “JTWROS”, that means two or more people own the property. During their lives, the joint tenants have equal rights to enjoy and possess the property. When one joint tenant dies, the remaining joint tenant inherits automatically.

To become the sole owner, there is no need for the remaining joint tenant (the survivor) to go to court, create a new deed, or take any other action. They inherit automatically.

Some real property is titled as tenancy by the entirety, or “TIE”. In a practical sense, owning property as joint tenants and tenancy by the entirety are very similar. The primary difference between joint tenants and tenants by the entirety is that tenants by the entirety must be married to hold real property as TIE. Joint tenants may be married, but it’s not required.

Accordingly, the general rule is that if spouses own property as TIE, and one spouse dies, the surviving spouse automatically inherits the entire property. However, the analysis as to who inherits changes if, for example, there is a divorce or separation agreement.

Tenancy in Common

Tenants in common own real property together, but there is no automatic right of inheritance from the other tenant, which is a dramatic difference from a joint tenancy or tenancy by the entirety. If one tenant in common dies, their interest in the real property passes via a will, trust, or intestacy in the same way it would have had the tenant in common owned the entire parcel of real estate. “Intestacy” means the person died without a will or trust.

Specific Devises vs. Residuary Bequests in a Will

The way real property is gifted in a last will and testament matters a lot. A gift of real property is generally either “specifically devised” or passes to the “residuary estate”.

A specific devise is language in a will that designates a unique piece of real estate to specific beneficiaries (or “devisees”). The language would read something like, “I give my condo on 323 58th Street, New York, New York 10018 to my niece, Jenny Rogers.”

If a gift of real property at death is made as a specific devise in a will, the will does not need to be probated; at least not for the purpose of passing the specifically devised real property (there could be other property in the estate which requires probate of the will). Rather, the beneficiary/devisee automatically inherits on the death of the person who made the will (called the “testator”).

Specifically devised realty is not a part of the probate or administrable estate, which means court supervision, or proving the validity of the will to a judge, is not required to inherit the real estate. Title (ownership) “vests” in the beneficiary immediately upon the death of the person who made the will.

On the other hand, if the real property passes through the residuary estate, the will needs to be probated, or proven as valid to the Surrogate’s Court. The residuary estate consists of all property that is not specifically devised (real property) or bequeathed (personal property).

Let’s say Joe Marcus makes a will. He owns in his name only 456 Leno Lane, Brooklyn, New York 11888. Joe makes a specific gift of all his personal property (like his television, computer, clothing, etc.) to his wife, Mary Craft-Marcus. He makes no other specific gifts. In Joe’s will, there is a residuary clause that reads, “The rest residue and remainder of my estate shall be distributed to my wife, Mary Craft-Marcus”. Everything else Joe owns, aside from his tangible personal property, passes through the residuary estate. Mary needs to probate the will before she can own the property.

Every now and then a situation arises in my office where, despite my client’s loved one having made a will, the property passes via intestacy, as if there were no will. This usually happens where someone owns real property, but does not specifically devise the real property in their will and their will does not have a residuary clause. This is often the result of poor drafting or Do It Yourself estate planning.

Intestacy (No Will)

What if there is no will? What happens to the real property. Just like a specific devise in a will, real property owned by a person without a will vests in their heirs immediately at death. Inheritance is automatic.

A “distributee” is a person who is legally entitled to inherit from the estate of another person who did not make a will. If you are a distributee of an estate with real property, you take title (in whole or in part) at the moment the decedent passes away. You do not even need to execute a deed. In the case Matter of Enquire Print. & Publ. Co., Inc. (Turner), the Nassau County Surrogate’s Court held that “taking some affirmative act by a distributee of realty is completely unnecessary since real property of the decedent descends immediately upon death to his distributees or devisees”.

The Probate Estate

If the real property becomes part of the probate (or administrable) estate, the executor (and sometimes an administrator if the decedent had no will) may need to sell the house or condo.

This responsibility should not be taken lightly. There are a number of things to consider.

First, an executor, being a fiduciary, must use good business judgment in connection with the sale. The executor will also want to take care not to breach any other fiduciary duties, like engaging in impermissible self dealing, or permitting an unreasonable delay in the sale of real property.

Second, the executor can only sell the property with a special type of deed called an “executor’s deed” (or “administrator’s deed). The executor’s attorney will prepare this deed in connection with the sale.

Unlike deeds between living persons, the executor’s deed must recite the full amount of “consideration” being paid for the property, meaning the sale price must appear in the deed itself.

Above, I explained that if a person dies without a will, or intestate, the property automatically vests in the distributees at the time of death, which means no administrator needs to be appointed. However, there are exceptions to this rule, such as appointing an administrator to sell the real property to pay the debts of the decedent.

Lifetime Trust

If the decedent made a trust during their lifetime, and the real property was titled in trust, then no probate is necessary. The trustee sells or manages the real property in accordance with the terms of the trust or applicable law.

Common Issues

When a loved one leaves you their house or apartment when they pass away, they may also be leaving you with a host of issues.

Paying the Mortgage

One issue beneficiaries face is how to pay for the mortgage from month to month when the decedent is no longer around to make those payments. If someone dies and there is no cash in the estate, but there is valuable real estate, the beneficiaries may consider dipping into their own funds to pay the mortgage, in the hopes of avoiding foreclosure. This comes with a host of risks and considerations. And, even if there is plenty of cash in the estate, it may not be immediately available.

Unintended consequences of immediate vesting.

Without proper planning, immediate vesting can cause disputes and family infighting. What if there are multiple beneficiaries, and they cannot agree on whether to sell? What if a beneficiary is missing and cannot be found? All beneficiaries/devisees are needed to join in the sale as they are all owners. If these issues arise, a proceeding pursuant to Surrogate’s Court Procedure Act Section 1902 may be necessary.

Inheriting a Co-op

So far, I’ve talked about inheriting real property from an estate. But shares in cooperative apartments, commonly called co-ops, are personal property, not real property. They are treated very differently than real property in many ways.

When you inherit a co-op apartment, you are inheriting shares in a corporation that owns real property. You can sell those shares from the estate, or you can keep them. However, in order to be allowed to live in the apartment, the Board of Directors of the cooperative corporation must approve you. If the beneficiary of stock in a co-op does not want to live in the apartment, or is not approved by the Board, they will generally need to sell the shares to someone who can be approved.

Like real property, there are a number of ways a person can inherit shares in a co-op corporation.

Life Estate

Although cooperative apartments are personal property, and not real property, one can generally give a life estate to a cooperative apartment. The issue is that, unlike real property, shares in a co-op apartment are subject to the co-op corporation’s Proprietary Lease, House Rules, and other governing documents.

Also, just because someone is given a life estate, doesn’t necessarily mean they have the right to reside in the apartment. They are still subject to approval by the board of directors, like any other tenant.


Oftentimes, two people will buy a cooperative apartment together. But, as you know, they aren’t really buying the “apartment”. They’re buying shares in the corporation. Just like real property, shareholders in a cooperative corporation can own their interest as joint tenants, tenants by the entirety (if they’re married), or tenants in common.

The type of ownership is generally reflected on the share certificate. If the share certificate says the owners are joint tenants, they are joint tenants. If it’s silent as to ownership, the owners take as tenants in common if they are not married. If they are married, and the certificate is silent as to ownership, they take as tenants by the entirety. These are the general rules. However, like almost all laws, there are exceptions.

Specific gifts, residue, and trusts

The rules about automatic vesting do not apply to co-ops because interests in cooperative corporations are personal property and not real property.

Co-op interests owned as JTWROS or TIE pass automatically at death to the survivor. But if they are owned individually or as TIC, they can only pass through probate and administration, even if they are a specific gift in a will or if there is no will.

Coops can also be titled in trust if it is permitted by the particular cooperative corporation. Each co-op corporation has its own set of rules regarding the titling of shares into a trust, and some prohibit it all together.

Paying the Loan

One issue many beneficiaries of co-op shares face is how to pay the “mortgage” on the shares. Actually, there technically is no “mortgage”, but a different type of loan secured by the co-op owner’s shares and proprietary lease.

Like real estate, some beneficiaries of co-op shares face the issue of how to pay the loan from month to month when the decedent is no longer around to make those payments. If someone dies and there is no cash in the estate, but there is valuable shares in a co-op corporation, the beneficiaries may consider dipping into their own funds to pay the loan, in the hopes of avoiding foreclosure. This comes with a host of risks and considerations. And, even if there is plenty of cash in the estate, it may not be immediately available.

Inheritance is Complex

Inheriting and administering real estate or cooperative shares in a decedent’s estate can be complicated, and it often requires the assistance of a lawyer. We are happy to help. Our firm can be reached at 646-820-4011 and

This article is intended for educational and marketing purposes. It should not be construed as legal advice. Every case presents its own unique facts and circumstances, and every client has their own individual needs.

Categories: Real Estate