Probate: What You Need to Know Before You Sell
When you own a house and are ready to sell, you simply contact a local real estate agent and list the property for sale. When you need to sell a home after the death of a loved one, the process is different and, at times, complicated. Read on to learn more about probate real estate.
What is probate real estate?
Probate real estate is real estate that is part of the estate of a deceased person. The court system is used to determine if there is a will, if that will is valid, who legally owns the property now, and how the deceased intended for their estate to be divided.
What happens to a house in probate?
When an estate enters the probate court system, a judge names an executor to handle the estate. This person is typically the same person named in the will by the deceased. If there is no will, the judge will appoint someone to be the executor of the estate.
What does the executor do?
It is the responsibility of the executor to discover all assets within the estate, including retirement funds, insurance policies, and real estate holdings. Executors must also settle the estate or pay any final bills for the deceased, including hospital bills and ambulance fees.
Why would a property go to probate?
A house would go to probate in order to determine what to do with it. If the will states that the house is to be sold and the proceeds divided among all heirs, then the executor must oversee that process. There are real estate agents that have specific experience in probate real estate and can help facilitate this process.
Is probate needed if there is a will?
While every state is different, most require that probate is needed to determine if a will is valid. Smaller estates, typically under 20K in total value, can avoid probate altogether in some states, like California.
Is there a way to avoid having a house in probate?
Again, while every state has slightly different rules in terms of probate, it is usually possible to avoid probate court for real estate assets, including:
Joint tenants
Adding a child's name as a joint tenant with full right of survivorship on a title simply means that the child and the parent own the house together. Upon the death of one, ownership of the house is retained by the other.
Living trust
A living trust is another way to avoid probate court because it puts the real estate asset in the trust's name, not the parent. The trust is typically held by all heirs.
Transfer clauses
In some states, homeowners have the ability to create a transfer clause that states that a real estate asset will automatically transfer to another person upon the death of the first — court will not be necessary.
Avoiding probate court is desirable because it can speed up the necessary paperwork after the death of a loved one so those left behind can focus on grieving. When you have a house in probate, contact a real estate agent with probate real estate experience to guide you and your family through the process.
