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A Guide To Probate and Real Estate

Dealing with an estate can feel like “one more thing” during an already stressful and emotionally draining time. Add on the fact that you’ll encounter more legal hoops and bumps in the road when dealing with selling a home in probate than you would normally, which can quickly make you feel overwhelmed and lost.

What is Probate?

To begin with, let’s start with a definition of what Probate actually is. Probate is the legal process of executing a Will. This is where Will beneficiaries legally obtain property and assets promised to them in the Will and pay off the debts of the estate.

The Probate Process

Before any beneficiaries can receive anything from the will, including property, you’ll need to go through the entire probate process. The will of the deceased will usually list an executor. The executor is the person in charge of putting the estate through the probate process. If there is a will with an executor, this is called, “Testate.” If there is no will, this is called, “Intestate.” When an estate is intestate a judge will pick an immediate family member to be the executor of the estate.

Whether the estate is “testate” or “intestate” there are a few steps when dealing with probate as the executor of the will. First, you’ll need to find and retain a probate or estate attorney. Contacting an attorney who specializes in probate or estate law will help smooth the process and they will represent you as the will goes through probate. The attorney will help file documents with the court, help collect any money obtained from life insurance, problem solve on income tax issues, and be a general counsel and advisor throughout the process.

After you find an attorney, you’ll then have to file a petition with the local court office to get the process started. The office of the court must be local to where the deceased lived. Keep this in mind if the deceased lived in a different state as you’ll need to make sure that you’re following the estate and probate laws of where the deceased lived. Additionally, as executor, you’ll need to let all heirs and beneficiaries listed in the will know that you’re petitioning the court to begin the probate process. Also, probate hearings are public records and will more than likely be listed in the local newspaper. This is to provide notice to anyone to whom the deceased owed money to and allows them to be notified and step forward.

Next, you’ll have to go through and take inventory of the estate. This means gathering up all the important documents of the estate. This could include any estate planning documents that the deceased had arranged such as power of attorney, the actual will, any documentation on a living will if there is one. Additionally, you’ll have to take an inventory of all assets and debts that the deceased had. This is where the probate or estate attorney comes in handy, because they’ll be able to guide you on how to collect all the proper documentation and that you’re reporting it correctly.

After you take inventory, you’ll then have to notify all of the people that the deceased owed money to and pay any legitimate claims with money from the estate. This can include credit card companies, banks if they had any personal loans, or any similar debts. Additionally, you’ll also have to file their final income tax return and pay any inheritance taxes due on their income or estate.

Once all of this is done, then you can petition the court to have all assets transferred to the beneficiaries of the estate. The whole process can go from months to years depending on the size of the estate.

What if There Isn’t A Will?

As you can see there are a lot of steps when dealing with a home in probate, and the process gets even more complicated when there isn’t a will. When there is no will for the estate, the whole estate will have to go through the formal probate process. This means that when it comes to the home of the deceased, the courts will control the entire sale and bidding process for the home.

So, How Does A Home Sell During Probate?

To keep it simple, a probate sale follows these basic steps. The executor gets a house inspection done and then finds a real estate agent to work with. The estate attorney may make some suggestions of agents to work with, but it’s up to the executor to retain the agent.

After the agent lists the home and markets it, buyer agents will then learn during approach that the property is a probate sale. From there, a buyer must make an offer along with a 10 percent deposit, which can be rejected by the sellers. Once an offer is accepted, the executor through their attorney, will submit a petition to the court to validate the sale. Once that is done, all heirs will be notified about the deal that was accepted.

Once the date arrives for the sale to be finalized, the judge will ask if there is anyone in the courtroom who would like to bid on the home before approving the original buyer’s offer, a process known as overbidding. If someone outbids the original buyer, the new buyer needs to follow the same process that the original buyer did to have their offer accepted.

As you can see, the whole process can be a long, complicated, and arduous journey on top of a time that is already stressful and emotionally draining. The laws are particular and the process can be very confusing. Signature Home Buyers can provide options that can help streamline the process or we will help point you in the right direction of some who can. We know that this can be a difficult time, but we’re here to help.

Disclaimer: This article is not a source of legal advice. It is for informational purposes only. Please consult a legal professional for assistance.

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