Part of the estate may be sold to facilitate distribution
The administration of the estate of a deceased person is regulated by the relevant law, which provides who can be appointed as the administrator, the powers and duties of the administrator and the probate registrar, how the estate will be administered and distributed and how debts shall be paid.
Prior to the issue of the probate order, the administrator must provide the court with information regarding the heirs and beneficiaries of the deceased, an estimate of the estate and debts and a written declaration by the heirs or beneficiaries consenting to their appointment.
Where the court considers it necessary, it requires for a publication in a daily newspaper or even in the official gazette, so any interested person may be informed of the application for the appointment of the administrator.
Moreover, the administrator must sign a bond for the double value of the estate together with a guarantor that will execute their duties in accordance with the law and will of the deceased. A temporary tax release certificate is also necessary for the issue of the probate order.
An administrator, having obtained the probate order, is obliged to file an inventory of the estate accompanied by an affidavit in court and shall, in administering the estate, obtain a tax release certificate and pay any tax payable. Their main duties are to collect the estate, pay the funeral and testamentary expenses, pay all the just debts of the deceased in the order of priority set out in the law, have the residue of the estate carefully valued, and, if it appears the testator has disposed by a will of more than the disposable portion, reduce the legacies proportionally and distribute the statutory portion and the undisposed portion according to the law.
After payment of the funeral and other incidental expenses, including the administrator’s reasonable expenses, the just debts of the deceased shall be liquidated by the administrator in the following order of priority: (a) expenses of the medical treatment of the deceased and wages due to domestic workers of the deceased, not exceeding six months’ wages, (b) secured debts according to the order of the priority, and (c) any other debt.
Where there are no adequate funds in the estate to pay obligations, the administrator has to apply to the court for directions and an order as to whether to sell, mortgage or lease part of the estate to cover the amounts due. Before the court issues the order, it must be satisfied that there is such a need for the administrator to dispose or charge a part of the estate, facilitating the distribution of the estate among the beneficiaries.
For this purpose, the administrator must serve the application to the heirs and submit a valuation report to the court regarding part of the estate to be disposed, such as a car, other movables or even an immovable property.
However, the administrator may, with the written consent of all heirs sell or dispose any part or even the whole of the estate without applying to the court not only to cover debts or protect the value of a perishable property, but also to facilitate distribution of the property among the heirs. This depends on how the interests of the estate are safeguarded and how the beneficiaries will decide for their benefit.
In order for an administration to be considered completed, the administrator must submit the final accounts with the necessary documents, details and receipts, accompanied with a written declaration signed by the heirs and the beneficiaries stating that they have received their inheritance right to the probate registrar. They examine the final accounts and provided the administration has been properly executed, release the administrator from their duties.
George Coucounis is a lawyer specialising in the Immovable Property Law, based in Larnaca. E-mail: [email protected], tel: 24818288