Transactions authorized for personal representatives; exceptions.

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A. Except as restricted or otherwise provided by the will or by an order in a formal proceeding and subject to the priorities stated in Section 45-3-902 NMSA 1978, a personal representative, acting reasonably for the benefit of the interested persons, may properly:

(1) retain assets owned by the decedent pending distribution or liquidation, including those in which the representative is personally interested or which are otherwise improper for trust investment;

(2) receive assets from fiduciaries or other sources;

(3) perform, compromise or refuse performance of the decedent's contracts that continue as obligations of the estate, as he may determine under the circumstances. In performing enforceable contracts by the decedent to convey or lease land, the personal representative, among other possible courses of action, may:

(a) execute and deliver a deed of conveyance for cash payment of all sums remaining due or the purchaser's note for the sum remaining due secured by a mortgage or deed of trust on the land; or

(b) deliver a deed in escrow with directions that the proceeds, when paid in accordance with the escrow agreement, be paid to the successors of the decedent as designated in the escrow agreement;

(4) satisfy written charitable pledges of the decedent irrespective of whether the pledges constituted binding obligations of the decedent or were properly presented as claims, if in the judgment of the personal representative the decedent would have wanted the pledges completed under the circumstances;

(5) if funds are not needed to meet debts and expenses currently payable and are not immediately distributable, deposit or invest liquid assets of the estate, including money received from the sale of other assets, in federally insured interest-bearing accounts, readily marketable secured loan arrangements or other prudent investments which would be reasonable for use by trustees generally;

(6) acquire or dispose of an asset, including land in New Mexico or another state, for cash or on credit, at public or private sale, and manage, develop, improve, partition or change the character of an estate asset;

(7) make ordinary or extraordinary repairs or alterations in buildings or other structures, demolish any improvements, or raze existing or erect new party walls or buildings;

(8) subdivide, develop or dedicate land to public use, make or obtain the vacation of plats and adjust boundaries, adjust differences in valuation on exchange or partition by giving or receiving considerations or dedicate easements to public use without consideration;

(9) enter for any purpose into a lease as lessor or lessee, with or without option to purchase or renew, for a term within or extending beyond the period of administration;

(10) enter into a lease or arrangement for exploration and removal of minerals or other natural resources or enter into a pooling or unitization agreement;

(11) abandon property when, in the opinion of the personal representative, it is valueless or is so encumbered or is in condition that it is of no benefit to the estate;

(12) vote stocks or other securities in person or by general or limited proxy;

(13) pay calls, assessments and other sums chargeable or accruing against or on account of securities unless barred by the provisions relating to claims;

(14) hold a security in the name of a nominee or in other form without disclosure of the interest of the estate, but the personal representative is liable for any act of the nominee in connection with the security so held;

(15) insure the assets of the estate against damage, loss and liability and himself against liability as to third persons;

(16) borrow money with or without security to be repaid from the estate assets or otherwise and advance money when necessary for the protection or preservation of the estate;

(17) effect a fair and reasonable compromise with any debtor or obligor or extend, renew or in any manner modify the terms of any obligation owing to the estate. If the personal representative holds a mortgage, pledge or other lien upon property of another person, he may, in lieu of foreclosure, accept a conveyance or transfer of encumbered assets from the owner of the assets in satisfaction of the indebtedness secured by lien;

(18) pay taxes, assessments, compensation of the personal representative and other expenses incident to the administration of the estate;

(19) sell or exercise stock subscription or conversion rights or consent, directly or through a committee or other agent, to the reorganization, consolidation, merger, dissolution or liquidation of a corporation or other business enterprise;

(20) allocate items of income or expense to either estate income or principal as permitted or provided by law;

(21) employ persons, including attorneys, accountants, investment advisors, appraisers or agents, even if they are associated with the personal representative, to advise or assist the personal representative in the performance of his administrative duties; act without independent investigation upon their recommendations; and, instead of acting personally, employ one or more agents to perform any act of administration, whether or not discretionary;

(22) prosecute or defend claims or proceedings in any jurisdiction for the protection of the estate and of the personal representative in the performance of his duties;

(23) sell, transfer, exchange or otherwise dispose of the estate or any interest in the estate for cash or on credit or for part cash and part credit at public or private sale. Security shall be taken for unpaid balances unless waived by order of the district court upon petition and good cause shown;

(24) continue any unincorporated business or venture in which the decedent was engaged at the time of his death:

(a) in the same business form for a period of not more than four months from the date of appointment of a general personal representative if continuation is a reasonable means of preserving the value of the business, including good will;

(b) in the same business form for any additional period of time that may be approved by order of the district court in a formal proceeding to which the persons interested in the estate are parties; or

(c) throughout the period of administration if the business is incorporated by the personal representative and if none of the probable distributees of the business who are competent adults object to its incorporation and retention in the estate;

(25) incorporate any business or venture in which the decedent was engaged at the time of his death;

(26) provide for exoneration of the personal representative from personal liability in any contract entered into on behalf of the estate; and

(27) satisfy and settle claims and distribute the estate as provided in the Uniform Probate Code.

B. The powers granted in Subsection A of this section are given subject to those limitations contained in other sections of the Uniform Probate Code.

History: 1953 Comp., § 32A-3-715, enacted by Laws 1975, ch. 257, § 3-715; 1995, ch. 210, § 37.

ANNOTATIONS

Official comments.See Commissioners on Uniform State Law official comment to 3-715 UPC.

Cross references. — For power to sell to pay estate taxes, see 7-7-11 NMSA 1978.

The 1995 amendment, effective July 1, 1995, in Subsection A, substituted "Section 45-3-902 NMSA 1978" for "Section 3-902" in the introductory paragraph, added Paragraph (4) and renumbered the remaining paragraphs accordingly; and made minor stylistic changes throughout the section.

Prosecution of claims. — Once plaintiff's surviving spouse was appointed as decedent's estate's personal representative, the surviving spouse could be substituted as the real party in interest because, under the Uniform Probate Code, the personal representative is authorized to prosecute claims for the protection of the estate (45-3-715 NMSA 1978) and has the same standing to sue as the decedent had immediately prior to death (45-3-703 NMSA 1978). Martinez v. Segovia, 2003-NMCA-023, 133 N.M. 240, 62 P.3d 331.

Borrowing money on behalf of estate. — Although the executor did not apply to the district court for prior authority to borrow money on behalf of the estate or as an incident of the administration of the estate, the court did approve these actions by adopting general findings and approving the executor's amended final account and report of the executor; and the record amply supported the court's findings that these actions were necessary to preserve and protect the assets of the estate. Skarda v. Skarda, 1975-NMSC-031, 88 N.M. 130, 537 P.2d 1392.

No allowance of attorney's fees where personal representative not employed. — The rule of law generally applied denies the right to an allowance of an attorney's fee out of an estate to an attorney whose services were rendered on behalf of an interested individual or group of individuals without employment by the personal representative of the estate. Gregg v. Gardner, 1963-NMSC-223, 73 N.M. 347, 388 P.2d 68 (decided under former law).

Executors may refuse to employ attorney named in will. — The right of executors to refuse to employ an attorney who had been named as such in a will is upheld and the attorney is entitled to compensation only for services performed prior to the date of his discharge by the executor or executrix. Hoxsey v. Fullerton, 1960-NMSC-020, 67 N.M. 77, 352 P.2d 652 (decided under former law).

Breach of fiduciary duty. — Executor, who also served as trustee of decedent's minor children's trusts and surviving spouse's trust, did not completely efface self-interest, nor exercise the executor's judgment and discretion with unstinted loyalty to the executor's cestuis que trustent and did not conform to the standards of conduct required of a trustee in purchasing stock of a corporation which the executor established for the ranch which the executor and the executor's deceased sibling had co-owned, and should have been held to account for stock in the corporation equal to one-half of the stock purchased by him from the ranch manager, as a trustee for Vendla E. Wootten and the children. Equitable adjustment was also required with respect to dividends that had been paid on the stock and for interest on moneys advanced by the executor to purchase the stock. Wootten v Wootten, 159 F.2d 567, (10th Cir. 1947), cert. denied, 331 U.S. 835, 67 S. Ct. 1516, 91 L. Ed. 1848, (1947).

Am. Jur. 2d, A.L.R. and C.J.S. references. — Inspection of corporate books and records by personal representative of deceased stockholder, 22 A.L.R. 98, 43 A.L.R. 783, 59 A.L.R. 1373, 80 A.L.R. 1502, 174 A.L.R. 262, 15 A.L.R.2d 11.

Right to exercise power of sale of real estate after time limited by will, 31 A.L.R. 1394.

Right of personal representative of leaseholder to enforce option to purchase contained in lease, 38 A.L.R. 1176, 45 A.L.R.2d 1034.

Death of party between giving and exercise of option to purchase as affecting rights of personal representatives of giver, 50 A.L.R. 1322.

Right or duty of executor or administrator to complete or enforce decedent's executory contract for purchase of real property, 58 A.L.R. 436.

Rights and remedies in respect to sale and proceeds of land located in a state other than domicile, for payment of decedent's debts, 81 A.L.R. 665.

Right of executor or administrator of claimant to file mechanic's lien, 83 A.L.R. 21.

Liability of trustee, guardian, executor or administrator for loss of funds invested, as affected by order of court authorizing the investment, 88 A.L.R. 325.

Power of sale as including power to mortgage, 92 A.L.R. 882.

Power of sale of real estate given to executor as impliedly conferring right to possession, 94 A.L.R. 1140.

Power and duty of trustee, executor, administrator or guardian as regards protection of investment in stocks by submitting to voluntary assessment, 104 A.L.R. 979.

Liability to heirs, devisees, legatees or distributees of executor or administrator or his bond in respect of invalid sale of property of the estate, 106 A.L.R. 429.

Liability of executor or his sureties for losses incurred in carrying on business pursuant to direction or permission of will, 109 A.L.R. 639.

Construction and application of provision of will expressly giving executor or trustee power to mortgage realty, 115 A.L.R. 1417.

Liability of trustee, guardian, executor or administrator for loss of funds, as affected by failure to obtain order of court authorizing investment, in absence of mandatory statute, 116 A.L.R. 437.

Duty of executor or administrator of insolvent estate to sell real estate to pay debts, or duty of probate court to order such sale, as affected by mortgage or other encumbrances thereon, 116 A.L.R. 910.

Right of executor or administrator personally to purchase mortgage or other lien on real property of decedent and enforce same, 117 A.L.R. 1371.

Duty and liability of executor (or administrator with will annexed) in respect of personal property specifically bequeathed, and not needed for payment of debts, 127 A.L.R. 1071.

Beneficiary's consent to, acquiescence in, or ratification of, improper investment, 128 A.L.R. 4

Remedies in event of executor's or testamentary trustee's delay in exercise of power to sell real estate conferred by will, 132 A.L.R. 1473.

Right or duty of executor or administrator to require security from life tenant, 138 A.L.R. 443.

Power of sale conferred by will upon executor as extending to real property not specifically referred to in power nor devised by will, 139 A.L.R. 1143.

What agreement or conduct subsequent to assignment of lease amounts to assumption by assignee of covenants of lease, or estoppel to deny such assumption, 148 A.L.R. 393.

Rights and duties of executor, administrator or testamentary trustee in respect of property antecedently pledged to him by decedent, 154 A.L.R. 203.

Duty or right of executor or administrator to pay tax on real estate of decedent, 163 A.L.R. 724.

Rights and remedies of executor or administrator as regards estate or succession tax paid or payable by him on property not passing under will or coming into his possession, 1 A.L.R.2d 978.

Right of administrator with will annexed to execute power of sale conferred by will, 9 A.L.R.2d 1324.

Power of sale conferred on executor by testator as authorizing private sale, 11 A.L.R.2d 955.

Implied power of executor to sell real estate, 23 A.L.R.2d 1000.

Construction of specific provision of will or trust instrument giving executor or trustee power to determine what is income or what is principal, 27 A.L.R.2d 1323.

Power of executor to create easements, 44 A.L.R.2d 573.

Power of personal representative to repair personal property of estate, 64 A.L.R.2d 857.

Delivery or distribution to life tenant, or assent by executor to his possession or to the life interest, as inuring to benefit of the remaindermen and operating to take the remainder out of the estate, absent a trust or will provision retaining it, 68 A.L.R.2d 1107.

Power and responsibility of executor or administrator to compromise claim due estate, 72 A.L.R.2d 191.

Power and responsibility of executor or administrator to compromise claim against estate, 72 A.L.R.2d 243.

Power and responsibility of executor or administrator as to compromise or settlement of action or cause of action for death, 72 A.L.R.2d 285.

Power and standing of personal representative of deceased promisee to enforce a contract made for benefit of third party, 76 A.L.R.2d 231.

Election by spouse to take under or against will as exercisable by agent or personal representative, 83 A.L.R.2d 1077.

Power of executor with power to sell or to lease real property, or to do both, to give an option to purchase, 83 A.L.R.2d 1310.

Rights in growing, unmatured annual crops as between personal representatives of decedent's estate and heirs or devisees, 92 A.L.R.2d 1373.

Who may exercise voting power of corporate stock pending settlement of estate of deceased owner, 7 A.L.R.3d 629.

Duty and liability of executor with respect to locating and noticing legatees, devisees or heirs, 10 A.L.R.3d 547.

33 C.J.S. Executors and Administrators § 184.


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