What is Probate?
It is the examination and transfer of an estate’s assets that belonged to a deceased person in the past. A probate court frequently examines a deceased property owner’s assets. This court ultimately decides how to divide and distribute assets to beneficiaries. Analyzing whether or not the decedent issued a valid will is usually the first step in a probate case.
Often, the deceased individual left behind established documentation detailing how their assets should be divided after death. But occasionally, a dead person leaves no will behind. With both scenarios we’ve listed here, unusual conditions can arise.
Probate may be unnecessary if a home is automatically transferred to surviving family members by a living trust, joint ownership, community property legislation, or transfer-on-death deed. However, if it doesn’t fit under one of these exclusions, the general rule is that whether or not a person leaves a will, any real estate they own will be subject to some probate procedure.
What happens if you don’t get the Property after Probate?
The outcome of a home in probate differs from state to state, but generally speaking, one of two things will occur: either the property will be inherited by the estate survivors, or the house will need to be sold through the probate court.
Following are the two cases:
Case 1: If there is a Will
The executor designated in the will must carry out the decedent’s last wishes, including transferring any property to beneficiaries—through probate court if the decedent left will to do so (this is known as testate probate).
Before being permitted to access, modify, or manage the estate, the executor must submit a petition to the probate court and schedule a hearing. It is crucial to file the petition and request a court date as soon as possible because this preliminary step can take weeks or months.
The judge will then transfer the property to the beneficiaries, who may decide to maintain or sell the residence by the will’s provisions.
In many cases, the spouse receives the house as the sole beneficiary. Other times, surviving children will receive the house and split the inheritance equally.
Suppose the surviving children are under the age of 18. In that case, the courts will typically appoint a probate guardian to act as the executor of the estate (often an immediate family member) regardless of whether there is a valid will.
Case 2: If there is no Will
Other intestate probate situations require the estate executor to sell the property during the probate process when the dead did not specify any beneficiaries for the dwelling in the will.
State-by-state variations exist, but the main stages are the same: the executor teams up with a top real estate agent to handle the transaction, obtains a home inspection, and lists the house on the open market like a typical home sale to attract a buyer.
They are employing a listing agent with experience managing probate transactions. And knowledging about probate procedures is extremely important. When selling real estate subject to probate, the ideal agent will be connected to professionals familiar with the complexities of probate, such as home inspectors, contractors, and residential appraisers.
Why is that relevant?
Vendors may receive payment at the end of a probate sale rather than upfront.
However, many probate houses need significant work before buyers consider making an offer. The money required to cover those repairs can restrict as part of the inheritance, which has a problem. However, few suppliers would put up with late payments if the correct agency didn’t have a good working relationship with them.
Your selling agent will simultaneously be responsible for the estate’s most significant asset or liability. The charging depends on whether the property is flush with equity or has a debt burden. As a result, your agent will work quickly to advertise the home, negotiate offers, and increase your net profit. Moreover, they will minimize your tax liability.
Like in a conventional sale, the commission paid to your agent will come from the sale’s revenues. However, you can face these scenarios. The proceeds will not pay down the outstanding loan if the estate has an underwater mortgage.
You should choose a lawyer with experience in probate, just like you did when choosing your agent. While your listing agent gets the house ready for the market, the lawyer will lead the process with the courts.
Your attorney will be in charge of submitting paperwork to the court. Also, coordinating with other beneficiaries, gathering life insurance, and managing taxes.
Your probate lawyer will arrange a court date to complete the sale once there is acceptance of the house offer. (Depending on the state, the time between the request and the court date may range from four to six weeks.)
States will handle multiple offers differently. But in general, interested purchasers can make their offers to the judge. In contrast to a regular sale, bidders in an intestate probate bidding war must increase their bids in set amounts.
Make sure to research and pick a real estate agent with probate experience if you are in a situation with a probate sale. State-specific intestacy probate closing procedures exist. The ideal agent will be experienced. They have a good network of suppliers and can work with your lawyer to navigate the legal system.