Opinion ID: 1237726
Heading Depth: 1
Heading Rank: 2

Heading: Collection of cash rent to pay estate debts.

Text: Larsen objects to Executor's use of the 1982 and 1983 cash rent from the property devised to him to pay estate debts. He claims that an executor may retain such rents only when it is necessary because there are no other available assets in the estate to pay estate debts. The title to real property devised in a decedent's will is immediately vested in the devisees, but is subject to the possession and control of the executor and circuit court during administration. In re Estate of Lingscheit, 387 N.W.2d 738 (S.D.1986); In re Estate of Kappenmann, 82 S.D. 91, 141 N.W.2d 780 (1966). During administration, the devisees are entitled to the rent, income, and profits which accrue after the decedent's death, but such income may be used to pay debts and administration expenses. SDCL 30-23-3; Lingscheit, supra. SDCL 30-23-3 provides: Unless it satisfactorily appears to the circuit court that the rents, issues, and profits of the real property for a longer period are necessary to be received by the executor or administrator wherewith to pay the debts of the decedent, or that it will probably be necessary to sell the real property for the payment of such debts, at the end of ten months from the first publication of the notice to creditors, the court must direct the executor or administrator to deliver possession of all the real property to the heirs at law or devisees. SDCL 30-23-3 grants an executor a right to income from real property to pay estate debts for ten months following the first publication of notice to creditors. Larsen interprets the statute to require an executor to show that there are no other assets available before using the income to pay the debts of the estate. Contrary to Larsen's interpretation, the language of the statute indicates that the executor need not show the necessity to use the income to pay estate debts until ten months after the first publication of notice to creditors. Larsen also claims that Executor failed to follow SDCL 29-2-14 and SDCL 29-6-7 in paying the estate debts. [3] Larsen argues that these statutes provide the executor direction as to the order of property to be used for payment of estate debts. He argues that under SDCL 29-6-7 the residuary property devised to St. John's must be used prior to property specifically devised. In relying on SDCL 29-2-14 and SDCL 29-6-7, Larsen confuses the use of the devised property itself, with the income from the devised property. SDCL 30-23-3 refers only to the income from the property. SDCL 29-2-14 and SDCL 29-6-7 both contain provisions which limit their application to more specific code provisions dealing with payment of estate debts. SDCL 30-23-3 is one such specific provision which grants the executor the power to use the income from real property for ten months after publication of notice to creditors. Larsen claims that even if Executor had an absolute right to use the income to pay estate debts for ten months, the 1983 rental payment of $10,285 was not due within the ten months following the publication of notice to creditors. The first publication of notice to creditors was made on June 25, 1982. The 1982 rental payment became due April 1, 1982, and was paid May 12, 1982. The 1982 pasture rent became due and was paid October 7, 1982. The 1983 rental payment became due April 1, 1983, and was paid the same date. These payments all became due and were paid within ten months following the first publication of notice. Executor properly applied the rental payments to estate debts.