Selling Proactively as Part of Your NYC Estate Plan

Real Estate Is the Hardest Asset to Divide

Cash, securities, and most other financial assets can be split cleanly among heirs down to the dollar. A building can't. If you have multiple children or heirs with different financial needs, different geographic locations, and different levels of interest in owning property, a single building creates an immediate coordination problem: does one heir buy out the others? Does everyone become a co-owner and share management decisions indefinitely? Does the property get sold after your passing, at a time and in a market you no longer control?

These aren't hypothetical concerns. Multiple-heir ownership arrangements often require unanimous or near-unanimous agreement for major decisions — refinancing, capital repairs, or a future sale — even when heirs disagree on priorities or simply don't communicate well. What functioned smoothly under one owner's direction can become genuinely difficult to manage once decision-making is split several ways.

Even close, well-meaning families can find shared inheritance of real estate to be a source of friction — disagreements over whether to sell or hold, how to handle repairs and expenses, and how to treat heirs who want to be actively involved versus those who just want their share in cash.

Converting One Illiquid Asset Into Flexibility for Your Heirs

This is the core appeal of a proactive sale: converting one hard-to-divide building into liquid, easily divisible assets while you're still the one making the decision. Heirs inherit flexibility — cash, securities, or other structured holdings that can be split precisely according to your wishes — rather than a shared management obligation they didn't ask for and may not want. It removes the burden of them having to agree on what to do with a property none of them may be equipped or interested in operating.

The Alternative: Hold and Pass at Death

Selling proactively isn't the only legitimate strategy, and it isn't automatically the best one. The alternative many owners choose is to continue holding the property and pass it to heirs at death, relying on the "stepped-up basis" rule. Under current law, property inherited through an estate generally has its cost basis reset to fair market value as of the date of death — which can significantly reduce or even eliminate the capital gains tax that would otherwise be owed on decades of appreciation if the property were sold during the owner's lifetime.

For owners who purchased decades ago and are sitting on substantial unrealized gains, this can be a powerful reason to hold rather than sell. The tradeoff is that it keeps the illiquidity and division challenges described above in play for your heirs to navigate after you're gone, rather than resolving them yourself in advance.

There Is No Universally Right Answer

Whether a proactive sale or a hold-and-pass strategy makes more sense depends entirely on your family's specific circumstances: the size of the unrealized gain, how many heirs are involved and how well they communicate, whether any heir wants to continue owning real estate, your own liquidity needs, and your broader estate and tax picture. This is a decision that should be made deliberately, together with an estate attorney and a CPA who can model both paths against your actual numbers — not a decision to default into simply because selling feels complicated or because holding feels like the safe, traditional choice.

A Valuation Is the Starting Point Either Way

Regardless of which path your family ultimately chooses, a current, professional valuation of the property is a foundational input to that planning conversation. It tells you and your advisors what's actually at stake — the size of the asset, the scale of any unrealized gain, and what a sale would net today versus what heirs might inherit later. That number makes the rest of the estate planning conversation concrete instead of hypothetical.

It also gives you something to revisit periodically. Property values, tax law, and your family's circumstances all change over time, and a plan that made sense five years ago may not fit today. Many owners find it useful to update their valuation every so often as part of an ongoing estate planning review, rather than treating it as a one-time exercise.