When a decedent dies intestate in Alabama, an administrator of the estate is permitted to sell estate real property if needed for payment of debts of the estate or costs and expenses of administration. In Brown v. Berry-Pratt, the Alabama Supreme Court examined whether the circuit court’s judgment allowing the estate administrator to sell some of decedent’s real property was in error, and examined what “debts” means in the applicable statutes.
The Facts of Brown v. Berry-Pratt
Pauline Brown died in 2005 without a will. Pauline was survived by four children: Leah, Allen, Cheryl, and Debra. At the time of her death, Pauline owned at least 18 parcels of real estate in Alabama and Mississippi.
After years of litigation concerning alleged mismanagement of the estate by the initial personal representative, Leah was appointed as administrator in 2015. Allen and Cheryl then sued Leah concerning the estate. Leah was removed as administrator and Berry-Pratt was appointed as the new administrator of Brown’s estate in 2018.
Less than two weeks after Berry-Pratt was appointed as administrator, she filed an inventory of the 18 parcels, and requested pursuant to sections 43-2-442 and 43-2-844 of the Alabama Code that the circuit court allow her to list those properties for sale “for payment of the costs of administration of the estate and…equitable distribution to the heirs.”
The circuit court granted her motion that same day.
Shortly thereafter, Berry-Pratt notified the court that she had received an offer on two parcels of property (the “Northport Property”).
At the hearing on Berry-Pratt’s motion to sell the Northport property, Leah, Allen, and Cheryl made it known that they objected to the price for which the Northport property was being sold. A guardian ad litem was appointed for the fourth heir, Debra, who was disabled and had dementia.
After another hearing where all parties were represented, the circuit court granted Berry-Pratt’s motion to sell the Northport property, explaining in its judgment that:
“This sale is to liquidate real estate for an equitable division of inheritance to the four (4) children and heirs of Pauline Brown and to avoid the liability and expense of maintaining the property. This sale is in the best interest of the estate of Pauline Brown and the sale is due to be approved and confirmed.
“….
“… [T]he offer to purchase this property … in the amount of $501,101 is the best price that can be ascertained for this property which is a liability and burden to the estate of Pauline Brown.
“It is therefore ordered that the successor administrator Ellen Berry-Pratt is hereby authorized under the powers of Ala. Code [1975,] 43-2-442 … and -844 to sell the above-described property ….”
Leah, Allen, and Cheryl appealed the judgment.
When Can An Estate Administrator Sell Real Property In Alabama?
An estate administrator can sell real property in an Alabama intestate estate if needed for payment of debts of the estate or costs and expenses of administration.
Section 43-2-830 of the Alabama Code provides:
(a) Upon the death of a person, decedent’s real property devolves …, in the absence of testamentary disposition, to decedent’s heirs ….
…
(c) The devolution of a decedent’s property, real and personal, is subject to homestead allowance, exempt property, family allowance, rights of creditors, elective share of the surviving spouse, and to administration.”
An estate’s administrator may recapture real estate from an heir for the payment of the decedent’s debts — but the debts of a decedent include not just the sums that the decedent owes when she dies, but also the fees and charges of administration. Ala. Code § 43-2-371 sets forth the order in which the debts of an estate are to be paid and noting that the fees and charges of administration are prioritized above all debts other than funeral expenses.
In this case, Leah, Allen, and Cheryl argued that Berry-Pratt was not authorized to sell the Northport property because when a property owner dies without a will, her “real estate vests immediately in the heirs at law subject only to recapture by the administrator … in the event th[e] property is needed for the payment of debts of the decedent.” McCollum v. Towns, 435 So. 2d 17, 19 (Ala. 1983). They argued that all of Brown’s debts had been paid, and that selling the Northport property was not needed to pay any of Brown’s debts owed when she died.
Berry-Pratt responded by acknowledging their argument but arguing that the debts of the decedent include not just the sums owed by decedent when she died, but also the “fees and charges of administration” pursuant to section 43-2-371 of the Alabama code.
The Alabama Supreme Court cited to both section 43-2-830 and 43-2-371, and also to Self v. Roper, 689 So. 2d 139 (Ala. Civ. App. 1996), where the Court of Civil Appeals stated:
[T]itle to the real property vests upon death in the heirs as joint owners, but subject to divestment, if needed, for payment of debts of the estate or costs and expenses of administration. Real property is left with the heirs, the persons presumptively entitled thereto, unless the personal representative shall determine that his possession of the real property is necessary for purposes of administration.”
Under these authorities, Berry-Pratt was entitled to sell the Northport property if funds were needed for the administration of Brown’s estate. The Alabama Supreme Court could not hold that the circuit court erred by concluding that the funds were needed for the administration of the estate.
An Alabama Probate Court Can Approve The Sale Of Real Property By An Administrator
The Alabama Supreme Court also cited to section 43-2-442 and 43-2-844 as further support authorizing Berry-Pratt’s sale of the Northport property.
Section 43-2-442 provides that “[i]n case of intestacy, lands may be sold by the administrator for the payment of debts.”
Section 43-2-844 authorizes the administrator of an estate, with the approval of the trial court, to “dispose of an asset, including land in this or another state,” and to “[s]ell, mortgage, or lease any real or personal property of the estate.”
Berry-Pratt complied with the statutory requirement in section 43-2-844 that she obtain court approval before selling real property of the estate.
The Alabama Supreme Court affirmed the circuit court’s judgment allowing Berry-Pratt, the administrator of the estate, to sell real estate owned by the decedent at her death.
