Under NY laws, if someone passes away without a will his estate will be distributed as follows:

If a decedent is survived by:

(1) A spouse and issue, fifty thousand dollars and one-half of the residue to the spouse, and the balance thereof to the issue by representation.

(2) A spouse and no issue, the whole to the spouse.

(3) Issue and no spouse, the whole to the issue, by representation.

http://www.mystatewill.com/statutes/ny_law.htm

I assume the aunt you are referring to was your uncle's wife. In which case, she received from the estate $50,000 plus 1/2 of the rest of the estate. So she had authority to sell you that car.

The following is from the NY department of motor vehicles website:

Surviving Spouse or Immediate Family Transfer

1. If the vehicle is worth equal to or less than $15,000, it automatically goes to the surviving spouse or child under age 21 (in which case, the guardian will complete these next steps.)
2. Fill out the Application for Title form at any DMV office.
3. Sign the title over to yourself, writing "spouse" under the signature; or "guardian" in the case of a child.
4. Pay $50 for a new title (cash, check, or credit.)
5. You get a credit for the remainder of the registration time (no need to re-register) and you get to keep the plates.

If you're the spouse and wish to transfer the title to someone else, then:

1. Get the Affidavit for Transfer of Motor Vehicle notarized.
2. Give the new owner a death certificate copy.
3. The new owner takes the notarized form and the copy of the death certificate to the DMV, applies for a new title, and pays the $50 fee.
4. The new owner must also register the car.