What is Probate, and when is property a part of probate?
Probate is the process of dealing with the estate of anyone who has died. Generally, this includes but is not limited to registration of the death, making funeral arrangements, fulfilling the terms of the will and clearing any outstanding debts.
When a piece of property is a part of that estate, it may be necessary for surviving family members to apply for a Grant of Probate, which gives them right to sell the property. If the deceased has a surviving spouse, who jointly owned the property the ownership is automatically passed.
How does the Probate Process begin?
To begin a probate proceeding, the Executor of the Will, or an attorney acting on behalf the estate must initiate the proceeding with the local Probate court. This is done by submitting an official document called a Petition for Probate of Will to the court. The court will review the Will and determine whether or not it’s a valid legal document—that is, whether or not the Will is legally binding and was in fact created by a third party.
After the court determines the Will is legitimate, the court then gives permission to the Executor to execute the Will, so assets can be properly transferred to beneficiaries. If there’s no Will at the time of death, then an administration proceeding must be held.
Is Probate needed to sell property of the estate?
The short answer is yes, Probate will usually be needed before property can be sold. As a sale cannot be completed until the Grant of Probate has been provided to your Solicitor.
Once the court determines that the Will is valid, the court will give the Executor legal documents called either Letters Testamentary or Letters of Administration. These documents authorize the Executor to distribute assets to beneficiaries. This may include transferring assets from the Testator into the names of the beneficiaries or a trust and all the to pay any debts or taxes on behalf of the estate.
Can Probate be avoided?
There is good news, not all property needs to go through Probate, which greatly accelerates the distribution of assets. These assets fall into three categories:
- Jointly Owned Property
- Designated Beneficiary
What preparation can be done to make things easier?
The best preparation is for the property owner to specify an executor in their will. If they want someone specific to inherit the property, this also needs to be clearly stated.
Although it can be done with the help of online services and self-help books, this is not something that is suggested you DIY. I would always recommend using the services of a qualified professional. They will ensure that everything is legally sound and help avoid any confusion for the surviving family members.
What happens if there’s no formal Will in place when a person transitions?
If there’s no will, the person is deemed to have died intestate, and the default legal process comes into play, and the estate will be divided in accordance with the law. The court will name an Executor, known as an “estate administrator,” and will tell that person how to distribute the property.
Are Probate Properties considered market value?
Yes, Probate Property values are based upon what that property is expected to sell for if it were sold on the open market. If the house sells for less than the probate value, then you can claim back the difference in tax that was paid.
Buying a Probate Property
Buying a property that is being sold after the owner has died can be a good way to purchase, and many buyers have enjoyed exceptional value, but you do need to follow the right process to avoid difficulties further down the line.
If you are buying a property from an estate, you will probably be dealing with an executor as opposed to someone who has inhabited the property themselves, so they may not know the details of certain aspects of the property and its history. They may not have immediate access to certain documents.
We would always recommend commissioning a building survey when buying a probate, and you might even want to have additional checks done on the property’s electrical, gas and heating systems. Don’t forget that the responsibility for any problems lies with the buyer, so it’s very much in your interests to carry out due diligence before signing any contracts.
Your choice of agent matters, too
Whether you’re buying or selling a probate property, choosing an appropriate estate agent – with suitable experience and knowledge – will stand you in good stead. The National Association of REALTORS® has a certificate program for REALTORS® to gain better insight on how to navigate the probate process.
If you are in any doubt about any aspect of Probate Property, Arielle will be pleased to answer your questions, and guide you in the right direction, ensuring that you understand all the processes (with a minimum of jargon) and can make an informed decision on how best to proceed.
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