Real estate probate refers to the legal process that must occur after a homeowner passes away.
After a person passes away, their assets, including their real estate, must be distributed according to the instructions laid out in their will. This process is typically done through probate, which is a legal process overseen by the courts to ensure that the deceased person’s wishes are followed.
Probate for real estate can be more complex than for other assets and personal items, as it involves transferring ownership of a physical property. If you are involved in probate real estate, it is important to understand the process and the timelines involved. This includes knowing how to locate probate property, how to buy or sell probate real estate, and the costs associated with probate.
As an heir or beneficiary of probate real estate, you may want to consider an estate loan that allows you to bypass the delays often associated with probate. This can help you access the funds you need to manage the property or take care of other expenses related to the estate.
Overall, understanding the probate process for real estate is crucial for anyone involved in the distribution of a deceased person’s assets. With the right knowledge and guidance, you can navigate this complex process with confidence and ensure that everything is done according to the law.
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What is Probate For Real Estate?
Regardless of whether it’s a buyer, seller, or an heir, probate real estate always means that someone who owned real estate died. For the heirs to have the title to the real estate belonging to the deceased person, they must go through probate – an official court process – to transfer the title.
Probate is the legal process by which a deceased person’s assets are distributed to their heirs or beneficiaries. When a person dies, their property, including any real estate they own, is transferred to their estate. The probate court oversees the administration of the estate, including the transfer of the deceased person’s property to their beneficiaries.
Probate for real estate property involves the transfer of ownership of the deceased person’s real estate assets to their beneficiaries or heirs. This process typically involves filing a petition with the probate court, which will appoint an executor or administrator to manage the estate.
The executor or administrator will then work to identify all of the deceased person’s real estate assets, including any land, homes, or commercial properties they owned. They will work with an appraiser to determine the value of these assets and may also work with a real estate agent to sell any properties that need to be sold.
Once the value of the deceased person’s real estate assets has been determined, the executor or administrator will work with the probate court to distribute these assets to the beneficiaries or heirs according to the deceased person’s will or state law if there is no will. This process can be complex and may take several months or even years to complete, depending on the size and complexity of the estate.
It’s necessary to hire a probate or estate attorney who will represent you as you go through the process. The probate lawyers are who will help you:
- File legal documents with the court
- Gather estate planning documents
- Collect funds from life insurance
- File income tax returns
- Help you sort through the deceased person’s debts
- Help you gather records of the deceased person’s assets
What is the Typical Probate Process For Real Estate?
In real estate (other types of property can be held in probate, too), the process involves an attorney opening a court file. This legally moves the deceased’s property to its rightful heirs and formally transfers the title. After the title is transferred, the heirs can choose to sell the home or transfer the title to someone else.
Probate for real estate is a legal process that involves transferring ownership of a deceased person’s real estate assets to their beneficiaries or heirs. Although the specifics of the process may vary depending on the state, it is generally overseen by the courts to ensure that everything is done according to the law.
Typically, a probate administrator or executor is appointed to manage the estate during this time. They must follow any provisions made by the court, which may include obtaining court approval before selling any real estate assets.
In some cases, there may be disagreements among the heirs about what to do with the property. For example, one heir may want to keep the property while others wish to sell it, or there may be multiple heirs who want to keep the property but not share it with each other. In such cases, the court will make the final decision on what happens to the property or one heir will buy another heir out of the property.
Usually, the court’s decision will be to sell the property and divide the profits between the heirs. This may involve working with a real estate agent or appraiser to determine the value of the property and find a buyer. The proceeds from the sale will then be distributed to the heirs according to the deceased person’s will or state law if there is no will.
Overall, the probate process for real estate can be complex and time-consuming, but it is essential to ensure that the deceased person’s assets are distributed to their rightful beneficiaries or heirs in a fair and legal manner.
It generally involves:
- A single home – usually the deceased’s primary residence
- One or more heirs who wish to sell the real estate or do a buyout of other heirs – usually the spouse or adult children who wish to sell the real estate
- The heirs list the property and enter into a contract with a buyer
- The heirs retain an attorney for probate if the property isn’t already in probate court.
- All heirs and beneficiaries are notified that the petitioning process has begun. They may use the probate hearing to express objections. Because probate hearings are public records, it’s possible the hearing date will be listed in the local newspaper. The probate hearing most likely has to occur in the county where the property is located.
- The probate transfers the deceased’s title to the heirs.
- After the title is transferred, the heirs collect money at closing.
- At closing, the real estate agent receives their fees, instead of having to wait until the probate process is finished.
When is Probate Needed For Real Estate?
Different states have different statutes for probate. For instance, in the state of Florida, some estates won’t need to go through any kind of probate. If the deceased didn’t have any assets in their individual name, then no probate is necessary. If the person leaves behind only a few assets, heirs or beneficiaries can go through a shortened version of probate known as summary administration.
If the estate holdings aren’t eligible for the simpler administration, formal probate.
There are only a few situations where the probate process takes place.
If Only One Spouse is Listed on the Deed
Deeds that have been titled with only one spouse, and one survives the other not on the title, probate is required. There are issues, known as spousal elections if this happens.
Tenants in Common
In this scenario, there isn’t a husband and a wife (though there are a few exceptions to the rule). This is more like a boyfriend/girlfriend, siblings, business partners, etc. This kind of deed doesn’t have any special language regarding automatic transfers. Because of this, if persons 1,2.3, and 4 are on the deed, and person 3 dies, probate is required.
If there is a sole owner with no legal will and no heirs, a property will go through probate so that the title can be legally transferred. The court appoints an estate representative to handle issues in situations like this, according to probate law.
When It’s Possible to Avoid Probate For Real Estate?
There are some situations where it is possible to avoid probate.
Tenancy By the Entirety
In situations where both the husband and wife are alive and both of their names are on the title, and one spouse dies, the surviving spouse automatically gets the title transferred to them. It’s much the same as joint tenancy with rights of survivorship, except it’s just for married couples.
Joint Tenancy with Rights of Survivorship
This deed includes language that indicates whomever on the deed is still alive has the right to the property. Whoever is the final survivor gets the title. It avoids probate until the last person on the title passes away.
Life Estate Deed aka Lady Bird Deed
Florida is a state that allows for enhanced life estate deeds. These deeds allow for residents to maintain their eligibility for Medicaid during their life, while still keeping assets in the family.
Many states have a Medicaid Lookback rule, which prevents people from transferring assets for the purpose of qualifying for Medicaid. Most states look back five years. The Lady Bird deed automatically passes the assets to the beneficiaries without probate. It also prevents the state from taking the property to recover any costs of Medicaid benefits used by the deceased.
Property held in a trust – either in a land trust or an Irrevocable Trust typically avoids probate. If a revocable living trust includes property and hasn’t been changed to remove the property from the trust at the time of death, it too can avoid probate. However, there may still be issues with trust administration.
Real Estate Agents Selling Probate Real Estate
Many real estate investors look for probate properties. They often want to work with a real estate agent experienced in dealing with probate properties.
If you’re ever contacted about probate homes, there are a few questions you should ask, such as:
- Is this the only property? If there are more properties, how many are there? Where are they located?
- Is there a mortgage or a reverse mortgage on the property? If so, who is the lender? You must notify known creditors to whom there are outstanding debts.
- Is anyone paying taxes?
- Did the deceased person own any commercial property?
- Did they own any vacant land?
- Is there a will? Probate will occur while the will is reviewed for authenticity. If an authentic will is present, there’s an executor who is generally the one who initiates probate.
- If there’s no living will, who are the surviving family members?
- Is there a trust? In Florida, any assets held in a living trust may pass to the heirs without going through the local probate courts. The catch is the trusts have to be created before you die. And it’s not just your real estate, but all your assets have to be transferred into the trust. You remain the trustee until your death, and then it passes to your successor.
The answers to these questions will help determine how long the probate process may take. It will also help you relay information to potential buyers.
For people who plan on buying probate real estate, it’s important to know that you shouldn’t have any real expectations on the closing date until the attorney and real estate owner mention a hearing date. That’s a court date for the probate case to be heard at the local courthouse.
How Long Does The Probate Real Estate Process Take?
Unfortunately, few legal proceedings are quick. Multiple factors influence how long a property stays in probate court. From opening the case with a probate attorney to closing, the entire process could take anywhere from six to 12 months, and in some situations, it can take even longer.
Call Inheritance Advance For Help Navigating Probate Estate Property
If you have probate real estate but don’t want to wait for it to go through court, you can get an advance on your probate distribution. When you work with us, we’ll review the petition for probate and any documents surrounding your probate case. After you fill out your application, we’ll crunch some numbers and if eligible, you’ll receive your inheritance cash advance within three business days – sometimes sooner. We wait for your probate so you don’t have to. And when the estate is settled, your advance is paid in full. You’ll receive the remaining inheritance cash.
Ready to find out more or get the process started on your probate property? Contact us today!