What happens to someone’s assets and property when they pass away can be a complicated process. During the probate process, it may be necessary to sell a house in order to repay debts owed by the deceased person’s estate, or beneficiaries may come to an agreement to sell a property and distribute the proceeds under the supervision of a probate court.
What is a Property under Probate?
Probate is a legal process that reviews a deceased person’s assets to determine who inherits what. A property under probate is real estate that belonged to a deceased person, which has yet to be inherited by anyone through the process of probate administration. Buying, selling, or otherwise transferring ownership of property under probate can be a lengthy and complex process that requires a specialized probate lawyer.
Whether or not a property is under probate depends on if it is a probate asset. There are several reasons a property could be a probate asset. The most common is if the deceased person was the sole owner of a property, or they had partial ownership of real estate as a tenant in common, rather than a joint tenant.
How the Probate Process Works?
Probate court usually takes place in the local area where the deceased person lived, however, there is an exception for property under probate. If the property under probate is located in another county or state, probate administration may extend to those locations as well. How probate administration works depends on whether the deceased person has provided a will.
If there is a will, a probate court will decide if it should be considered valid. The probate court can rule that a will is invalid if it finds that the will was not properly signed with witnesses, that the will was written under undue pressure, or that the deceased person did not have the capacity to understand their assets or the nature and consequences of making the will.
If the will is valid, it will usually assign an executor to act as the deceased’s legal representative. This person will have to locate and oversee the deceased person’s assets and estimate the value of the estate. They will also have to pay off any debt or taxes associated with the property under probate. Once the value of assets has been calculated, assets may be used to pay off debts before distribution to beneficiaries. After all debts and taxes are paid, the remainder of the estate is distributed to the beneficiaries by the executor with authorization from the probate court.
If the will is invalid or if there is no will, the probate court will appoint an administrator to serve as executor. They will evaluate the estate, pay off all debts, and locate any legal heirs of the deceased. The probate court will then decide which and how assets should be distributed to the heirs according to state law.
Who Owns a Property After Probate?
Surviving co-owners of a property will automatically inherit the property after probate, and a will cannot bequeath a co-owned property with the consent of the other co-owner.
If the deceased person was the sole owner of a property, it remains their property until the probate process is complete. The property ownership will then transfer to the beneficiaries designated by the will. Without a will, state intestacy law decides who inherits the property. In Las Vegas, assets will be distributed equally by the deceased person’s children. If they have no children, assets will be distributed between their parents, or their siblings if there are no surviving parents. If there are also no surviving siblings, the assets will go to their closest relative or the state if none can be found.
Can an Executor Steal the Estate?
The executor of a will is responsible for managing the deceased person’s estate, assets, and property during the probate process. This means that although they don’t have ownership of property, they do have control over it.
Because of this, it is possible for the executor to mishandle assets, including property, in ways that prevent beneficiaries from receiving their inheritance, transfer property ownership to the executor or provide the executor with the proceeds of selling the property.
How Does A Probate Sale Differ From A Regular Sale?
After an administrator or executor has taken control of a deceased person’s assets, they will be responsible for all unpaid taxes and any creditors of the deceased person have a year to claim their debt from the estate. If necessary, the deceased person’s assets, including real estate, may be liquidated to repay the debts. This results in a probate sale.
When a buyer makes an offer to buy a property under probate, they must submit their bid to the probate court, with the property selling to the highest bidder. The executor or administrator must petition the probate court for permission to sell the property, and any beneficiary or legal heir can object to the sale. This can create a lengthy legal dispute involving both the distribution of assets and the repayment of debts claimed by creditors.
How Long Does it Take to Sell a House Through Probate?
It usually takes a year or more to sell a house through probate. This is because creditors have a year to claim any debts they are owed, and property under probate cannot be sold until the full extent of debt can be assessed. A property under probate also cannot be sold until the IRS has determined whether the estate will owe estate tax. This process can take up to 45 days from submitting an application to discharge the property from estate tax liability, or longer if there are any problems in this process.
Things You Need To Know To Sell A House In Probate has been provided by Kevin Vitali of EXIT Realty. Thinking of buying or selling a home? Gove me a call at 978-360-0422.