How Does Probate Work For Real Estate Properties?
If the responsibility of managing a real estate asset in probate falls on you, you’ll have to understand the way probate courts sell real property. Let’s break this process down step by step.
Step 1. Determine The Executor Of The Estate
If you will be handling the estate, you’ll need to have the court name you as executor of the estate. In a testate scenario, the executor will be named in the deceased individual’s will.
Step 2. Hire A Probate Attorney And Petition To Start The Process
While you act as executor, you’ll want to hire a probate attorney to help guide you through the probate real estate process. Your probate lawyer will represent you through the entire process and help you with anything that arises and is paid by the estate. You may confer with the attorney as needed to work through the probate process.
Step 3. Take Inventory Of The Estate
When you take inventory of the estate, make sure to gather important documents and information. This might include estate planning documents such as the will, living will or power of attorney, assets such as stocks, bonds, cars or life insurance, and debt.
If there is a home to be sold, it’s also important that a home appraisal is conducted and a real estate agent experienced with selling probate real estate is contacted. The agent will pull comparables for the area and read the appraisal to determine what the asking price on the property should be.
Step 4. Contact A Real Estate Agent
If there is a home to be sold, it’s also important that a home appraisal is conducted and a real estate agent experienced with selling probate real estate is contacted. The agent will pull comparables for the area and read the appraisal to determine what the asking price on the property should be. Michell and Sabella specialize in Probate real estate and guide with compassion, thouroughness and care.
After taking inventory of the estate, you’ll have a better understanding of the finances of the deceased individual. With this information, you’ll first need to notify known creditors to whom the deceased person owes money and pay out their claims with money from the estate. You can also use the estate to pay other debts.
Once these debts have been paid, you’ll need to file income tax returns for the deceased individual.
Step 6. Wait For Assets To Be Transferred
The final step in the probate real estate process is waiting for the assets to be transferred. If the property is not being sold in court, the estate will be legally transferred to the beneficiary after all bills and creditors are paid and the executor petitions the court to transfer the assets.
On the other hand, if the property is being sold in court, it first needs to be listed. After the price is decided, the property will be put on the market. Once an offer is submitted and terms are negotiated, a notice will be mailed to all heirs of the estate giving a 15-day period to object to the sale of the property. If no one objects, the sale of the house will be officially processed in court.
There are ways you can avoid probate for real estate. Let’s learn more about your options and help you plan ahead.
One of the easiest ways to avoid probate for real estate is with a living trust. With a living trust, the creator of the trust will name themselves as trustee until they pass away. They’ll also name a successor trustee and trust beneficiaries to manage and distribute the assets or estate when they die. After passing, the trust can’t be changed. The owner can use or sell the property, but the property belongs to their trust, not to them personally.
Joint tenancy is another way to avoid probate for real estate properties. You can put a joint tenant on your property’s deed if you’re the sole owner of the property. Then, when you die, the property’s ownership will automatically go to the joint tenant without going through the probate process.
A Transfer On Death (TOD) deed can help you avoid probate by choosing a beneficiary to inherit your real estate property at your death. You’ll remain in control of your property during your lifetime and can even have the right to revoke the TOD deed.
A life estate deed will give you the power to use your property during your lifetime and then transfer the property to another individual when you die. You’ll avoid probate with a life estate deed, but you’ll also lose the opportunity to sell, mortgage, or make decisions on behalf of the property without the agreement of the other beneficiaries. Two types of life estate deeds are traditional life estate deeds and enhanced life estate deeds.
By now, you’ve been able to learn more about real estate property probate and what it involves. If you’re concerned about whether elderly loved ones have planned for how they’d like their estate to be handled, talk to them about meeting with an estate or probate attorney today.
You can also learn more about how and why it can be important to put a house into a trust.