What Is Probate?
Probate is the fair distribution of an individual’s property following their death. It may involve establishing the validity of a will (if there is one), changing the title to real property, and determining ownership of assets like bank holdings, stocks, or bonds. Some things are not probated, like in situations where the right of survivorship exists. (Ex. If there is a joint owner of a house or a life insurance policy cites beneficiaries.)
I’m Going Through Probate of a Property. What Should I Do?
When someone you love passes away, there are quite a few things that you need to take care of. But it doesn’t need to overwhelm you. Even just hearing the word “probate” can be intimidating. It is well known that the process can cost a pretty penny while taking quite a long time.
When it comes to a deceased person’s estate, if there is no naming of a living trust, probate may be called into action along with state guidelines. If you’re in the middle of the probate process, and you’re wondering if the sale of a house can cover the cost, the answer is simple: yes.
Does Probate Cost Anything?
First off, it’s important to remember that the legal system isn’t free. When the court has a valid will to work with, court costs and fees are expected to be paid. However, if there isn’t a will or the existing will is being challenged, the probate process could be prolonged. This administration cost can be expensive.
The American Bar Association says that administrative fees and probate can take up between six and 10 percent of an estate. It’s also significant to note that this statistic is calculated before any liens or deductions are taken out.
After payments for a funeral, taxes, or other debt are collected, what is left can be distributed to the estate’s heirs and beneficiaries. If a will hasn’t been presented, state laws go into effect to determine the further distribution of the property.
How Should I Pay for Probate Fees?
As expected, this process comes at a price. If you are an executor of the estate and there is a property that hasn’t been willed to a beneficiary, you are allowed to sell it to cover the costs. Following the sale, all proceeds will be applied to the probate and debts of the estate first.
The probate court will divide the remainder to distribute amongst beneficiaries. The state where the property is located is taken into account to determine the proceeds, but the ultimate determination is made by the county.
If another jurisdiction holds the property of the deceased, in addition to probate for the state, an ancillary administration goes into effect.
A buyer may extend an offer on the property in probate, and the executor may accept the offer, even when the process is still in action. While this is acceptable, the process is tedious and must adhere to strict state rules. The probate court must monitor and approve the terms of the sale.
Who May Receive Money from a Probate Process?
It’s traumatic enough to deal with the death of a loved one. Dealing with the various parties scrambling to receive funds from an estate only makes things more difficult. Those parties include creditors collecting on what they’re owed, funeral-related vendors (funeral home services, burial, etc.), relevant state and federal tax offices, and the like.
After that’s taken care of, what remains is distributed to heirs or beneficiaries named in the will. If there was no will at the time of death, state law determines property distribution.
Can a House in Probate Be Sold to Pay Probate Fees?
If you’re the executor of an estate, you can sell real estate held by the deceased — provided that it was not willed to a beneficiary — to help cover this cost. After the house is sold and the proceeds are applied to the probate cost and estate debts, the probate court splits any remaining profits among the beneficiaries.
What Issues Are Involved in a Probate House Sale?
Jurisdiction can become confusing in this situation. The probate process applied to the house you want to sell is governed by the state in which the house is located. If the deceased possessed property in another state, supporting administration is implemented.
Simply put, the probate process happens in whatever jurisdiction the property is located in. The court doesn’t care where you live or where the deceased may have lived.
The executor may accept an offer from a buyer, and sell the property while the probate is still in process. It is tedious and presents another issue involved in probate house sales: monitoring the sale to ensure adherence to strict state rules. In addition to this monitoring, the probate court must approve the terms of the sale.
Homego Simplifies Probate.
To sell a house that’s in probate requires a specific process. Proper filing with the court is required, additionally, the court must approve the sale. It can take 45-60 days for this process—though sometimes longer— and a traditional real estate agent can add on to that time frame.
Throughout the extended process, the executor must pay the taxes, insurance, and electric costs for the home. This can be expensive on its own but adding on realtor fees for the commission can just make it worse. HomeGo can reduce this to-do list to something more tolerable.
HomeGo makes it possible to receive a guaranteed highest cash offer for the property while sidestepping all the messy legal processes.
If you want to sell a house in probate, here’s how easy it is with MoneyBug:
- Get a real cash offer on the probated house.
- After the offer and your 10-minute walk-through, a petition is required to sell real estate.
- Await the probate court’s approval once the petition is filed.
- When the court approves, the sale can be closed within one week’s time.
HomeGo can make the probate process a lot easier for you and provide a much-needed breath of fresh air during a difficult time. Get started today!