With more than 60 percent of Americans owning a home or investment properties, chances are that many real estate assets will go through a probate process. Find out more about the process now with an overview of probate and real estate properties to help you plan for later.
What is probate?
A good place to start an overview of probate and real estate properties is with the definition of probate. To clarify, probate is the legal process of reviewing a will to determine if it is valid and authentic.
Each state tends to have its own requirements and structure. So, the probate process does vary depending on where the deceased lived.
If a will is left and it is deemed valid, assets are given to beneficiaries accordingly. If the will is contested, the probate court will work to resolve the case.
If there is no will at the time of death, probate law goes into effect, and the court delegates who is assigned ownership of the property. Typically, it starts with the closest surviving family, such as spouses and children, and moves outward to parents and other distant relatives.
What happens next?
Again, the probate process is court supervised. While the details may vary by state, the general principles remain the same.
First, determine who will be the executor of the estate. Usually, an executor is named in a will. If not, the court will assign one.
Second, the executor must file a court petition to begin the process. It’s a good idea to work with a team of professionals—most importantly, a probate attorney.
Next, take inventory of the estate. This includes reviewing important documents like the will if one exists, a living will, assets, insurance policies and debt.
If property or a home is being sold, connect with a local Realtor to list the property. The Realtor can help determine property value assessment, along with other important details.
From here, finances are organized. If the deceased owed money, debts are paid, and income taxes will then be filed on behalf of the deceased.
Finally, assets will be transferred. The courts may be involved, or it may be up to the executor to distribute assets—including personal property and real estate.
Avoid probate with estate planning.
However, there are ways to avoid real estate probate.
For starters, there is what is called joint tenancy. If you are the sole owner of a property, you can name a joint tenant on the deed. When you die, the joint tenant automatically inherits the property.
You can also establish a living trust. The creator of the trust is in charge until death, at which time named beneficiaries inherit control over the assets.
Summary
Has this brief overview of probate and real estate properties left you with a few questions? Working with both an experienced attorney and Realtor can help you navigate what could be a difficult situation with ease. For more industry news and guidance, keep reading our blogs.