Probate

Probate is the court-supervised process of reviewing a deceased person’s assets and making sure they get distributed to their rightful heirs. The rightful heirs are the people or organizations the deceased named in their will.

What is Probating a Will or Estate? Probate is the process by which a court legally recognizes a person’s death and authorizes the administration of his or her estate. Until this occurs, nobody is authorized to sign on behalf of the owner. To contract for the purchase, we’d need to get all heirs to sign the contract. This is only a perceived contract since the heirs cannot contract for the sale of the property. If the deceased died without a will (intestate), state intestacy law determines who gets the property. For example, it might first go to the deceased’s surviving spouse. If there is no surviving spouse, it may then go to the deceased’s children and grandchildren; if there are no children and grandchildren, the deceased’s parents and/or siblings would usually be next in line. If you haven’t arranged to avoid probate, your real estate will go through probate in the state where it’s located, even if it’s not your state of residence.

How Long Does Probate Take?

Probate can take anywhere from 2-6 months if not fighting, or it could take years if there is fighting between the rightful heirs.
How long it Probate takes depends on several factors such as: How complex your estate is. What state you live in. How well your personal representative handles their duties. How busy the courts are, and Whether anyone is fighting with each other and contests the will

The Probate Process.

  1. Filing with the Court
  2. Posting Notice of Probate Administration
  3. Validating the Will/Appointing an Administrator
  4. Notify Creditors
  5. Identifying Beneficiaries (under the Will or Heirship)
  6. Inventory of Assets (File with the Court)
  7. Resolving Disputes
  8. Distributing Assets

How to Avoid Probate

Many people want to save their heirs the time (2-6 months if not fighting, or it could take years if there is fighting), and money ($1,500 – $7,000) associated with probate. They want their heirs to receive their assets as quickly as possible and without having to pay probate fees. Talk with Mike at Real Property Hero to point you in the right direction. Typically by using Affidavit of Heirships that is inexpensive (typically $250 – $300 for each heir) and quicker given that title company lawyers can have the Affidavits of Heirships drafted and signed by the heirs.

We don’t see the point in involving the court in something the family could handle themselves by planning ahead and not fighting each other. Plus most people don’t want their assets to become a matter of public record, they don’t want to pay lawyers too much and no one wants to prolong such a situations, which happens when assets pass through probate.

You can make an informed decision about whether estate planning to keep your real property out of probate is worth it (IT IS). Learn what the process and cost would be for probate, then compare it to the alternatives. If you do want to avoid probate, you have several options.

The Affidavit Of Heirship (AOH) Process

We have experience with accomplishing real property sales using the Affidavit Of Heirship Process (AOH) which is the EASIEST way compared to going through Probate! Contact Mike to get started!

  1. Provide Death Certificate of the Property Owner. (Order “Death records” from the health and human services from the state)
  2. Complete an AOH questionnaire. (Very extensive, we help you with this, the Title company Lawyers will draw it up, must be fully completed)
  3. Will need at least 2 people to witness with knowledge about facts like deceased names, addresses, spouses, children of the diseased, date of death, etc.
  4. Title will then drafts the AOH (Affidavits Of Heirship)
  5. Title underwriter will approve or require revising of the AOH
  6. Get the AOH signed and notarized.
  7. All Heirs must agree and be involved.

When is Probate Required because AOH will not work?

  1. If the deceased owner passed away between 0 and 6 months ago. (underwriter may allow a shorter period based on circumstances)
  2. If there are missing heirs
  3. If you have minor heirs – Will need to appoint a guardianship
  4. If you have an incapacitated heir – Will need to appoint a guardianship
  5. If Heirs are fighting and do not agree on terms

Revocable Living Trust

Assets held in a revocable living trust typically bypass probate. A revocable living trust allows you to transfer ownership of your real estate into the trust during your lifetime. If you change your mind while you’re still alive, you can take your home out of the trust. To set up a revocable living trust, you’ll need to draw up legally valid trust documents. Then, you’ll need to change your home’s title. That means you’ll sign a property deed to take the home out of your name and put it into the trust’s name. The trust will then own the home and the trustee (typically you) will take care of the home for your benefit. You can be the grantor or settlor (the person who creates the trust and gives property to it) as well as the beneficiary. When you die, the trust becomes irrevocable—meaning the trust can no longer be modified—and the successor trustee takes over. The real estate that you’ve placed into the trust (or the income your real estate generates) then gets distributed to the trust’s beneficiaries, according to the terms of the trust. The successor trustee oversees these distributions and must follow the rules you’ve established in the trust documents.

Irrevocable Trust

You can also place real estate into an irrevocable trust to avoid probate. Because you’ll have little or no authority to change your mind once you put assets into an irrevocable trust, it’s a much weightier decision. Irrevocable trusts are more popular among individuals who are wealthy enough to face estate and inheritance taxes. Placing real estate into an irrevocable trust avoids those taxes. You’ll want to get professional guidance from estate planning attorneys and financial advisors to decide whether an irrevocable trust is right for you and draw up the appropriate documents.

Transfer-on-death Deed

A transfer-on-death (TOD) deed, or beneficiary deed, allows you to pass your real estate directly to another person when you die and avoid probate. It’s easier and less expensive to set up and maintain than a trust, and you can revoke it during your lifetime. However, a TOD deed for real estate won’t be suitable for everyone’s needs. Whether you can set up a TOD deed for your real estate depends on what state the property is in (29 states and Washington D.C. allow it), what type of property you own and who you want to leave it to. For example, California allows TOD deeds for a home you use as your primary residence, but not other types of real estate. You must follow your state’s requirements for signing the deed and filing it with the county land records office to make it legally binding.

Co-ownership

If the property has more than one owner and only one owner dies, the property may not have to go through probate. For example, if you and your spouse are both named as owners on the title to your home, the home may avoid probate.

How to Buy Probate Real Estate

Probate typically means there is a Will. Sometimes the executor of the estate will need to sell property as part of the probate process. For example, it may be necessary to liquidate the home to pay off creditors or to distribute assets equitably among heirs when the decedent didn’t have a will. The executor or administrator may sell the property through a public auction or private sale as allowed by state law.

Probate real estate can be appealing as an investment strategy if you can wait several months to close because the property should sell below its true value depending on how well it is marketed. That said, there are companies that specialize in helping executors sell probate properties for top dollar, so you’re not necessarily going to get a bargain.

If you’ve never bought probate property before, it’s a good idea to work with Real Property Hero who is well-versed in the process since it can be quite different from purchasing a seller-owned property. For instance, you may need a larger earnest money deposit, and the probate court may have to approve your purchase offer. You may have to give other parties the opportunity to outbid you even if the estate executor or administrator accepts your private offer. Laws and customs vary by state.

How to Sell Probate Properties

To sell a probate property as an estate executor, you may first have to get the court’s permission. Be sure to consult an experienced probate attorney throughout the process and call us. We buy Probate properties and if we can’t work out the right price with you, then we’ll help you sell to someone else as a Traditional Listing with a real estate agent, experienced in probate sales, to market the property, and help you manage the process.

Selling a probate property often has steps that an ordinary real estate sale does not. For example, you may need to:

  • Hire an independent appraiser to determine the property’s market value (a step only the buyer would normally take)
  • Sell the property for no less than a certain percentage of the appraised value (otherwise, the probate court may not approve the sale)
  • Publish notice of the sale in a local newspaper for a certain number of consecutive weeks

The sale may be a relatively straightforward process if the court allows you to choose your preferred buyer. No matter where you are in the process of probate or dealing with a real property of a deceased family member, start with a call to Real Property Hero.