I Just Inherited Property in Probate, Now What?
It's never easy to say goodbye to a dearly departed loved one, especially if you're responsible for the property left behind. In movies and television shows, it appears that inheriting property is as simple as an attorney reading the will, but this is not the case in real life.
Unless the deceased established a living trust, you must go through probate—even if you are the lone beneficiary of the decedent's estate.
According to the American Bar Association, "probate is the official legal process that recognizes a will and selects the executor or personal representative who will administer the estate and distribute assets to the specified beneficiaries."
This essentially means you'll have to go to court multiple times before the probate inheritance becomes legally yours. As a result, the first move you should take after inheriting property is to contact a team of skilled probate specialists.
The 3 Important People in the Probate Process
#1 - The Probate Attorney
When you inherit property, the first person you should call is a great probate attorney.
A probate attorney will advise you on the paperwork you'll need for court, create and submit the probate petitions, and represent you in court. Your attorney can also advise you on the procedures you must take during the probate process. The first questions you should ask your probate attorney are about their probate experience, such as how many cases they've handled and how long they've been practicing probate law.
Make sure you get along well with the attorney you choose. The probate procedure in California can easily take 6 months or more, so having good rapport with your attorney is essential.
#2: An Experienced Probate Realtor
When you're overwhelmed by mourning and the complexity of probate, it's easy to turn to the familiar, such as hiring your favorite realtor. This, however, is a mistake unless your preferred agent specializes in probate and trusts sales.
Even though most probate sales proceed similarly to conventional sales, there are a few important distinctions that need probate-specific expertise. A probate real estate agent will be familiar with these differences, such as selling a property that requires court approval or drafting contracts while the probate property is still in the decedent's name.
If you do not reside near your inherited property, you will need to employ a probate agent that lives nearby. This ensures that your agent is familiar with the regulations and policies of the property's home state, city, and county, which may have an influence on your sale.
While it is not required, it is advantageous if your agent is qualified to handle probate sales. A Certified Probate Real Estate Specialist (CPRES), who has been trained by the United States Probate Services, has the particular requisite knowledge to deal with the various challenges that might emerge during a probate sale.
Before you may list your inherited property with a probate agent, you must first be granted authority by the probate court. However, while you wait for such rights, you should contact an agent right away.
During that time, the agent may assist you with a variety of critical duties such as providing a market update, determining the home's worth, and discussing what needs to be done to prepare the property for the market. Delaying the discussion with a probate agent may result in a delay in the entire probate process.
#3: The Personal Representative
The personal representative is in charge of finalizing the decedent's estate and transferring the estate's assets to the beneficiaries.
This is frequently you, especially if you are the lone heir, filed the Petition for Probate, or are appointed as executor in the will.
In some circumstances, such as when beneficiaries disagree, there is a challenged will, or the beneficiaries live out-of-state, it is advisable to appoint an independent third party to manage the estate. This person, known as a professional fiduciary or a professional executor, acts as an impartial, third-party representative of the estate. While inventorying, selling, and distributing the estate's assets, the fiduciary functions without the distorted view that relatives of the dead may have.
The 3 Phases of the Probate Process
While there are multiple steps in the probate process, the timetable may be divided into three major phases: pre-petition for probate, administration of the estate, and estate closure.
Pre-Petition for Probate
The first stage occurs prior to your attorney filing a Petition to Probate with the probate court. Even if you are included in the will, you are not the executor or personal representative until this initial hearing. This indicates that you lack legal authorization to act on behalf of the estate.
At this point, you are just gathering the decedent's documentation in preparation for filing the petition. In most circumstances, you will need a copy of the death certificate, the actual will (if available), and the formal petition papers completed by your attorney.
The court hearing on the probate petition is often set many week following the original filing. During that time, you do not have power to act on behalf of the decedent's estate, such as dispersing assets or executing a listing agreement with a real estate agent.
However, you can and should maintain the property, hire a probate agent, and deliver a notice of probate to beneficiaries and creditors.
Administration of the Estate
When the initial probate hearing occurs, the court will award you or your professional fiduciary letters of administration if no will exists, or letters of testamentary if a will does. These letters provide authority to the personal representative to do business on behalf of the estate.
During this period of administration, all of the decedent's final business activities will be carried out in order to settle and dissolve the estate. This involves paying off debts, submitting the last tax return, dispersing bequests in accordance with the terms of the will, and selling the property.
Of course, selling the inherited property is the most difficult and time-consuming task at this era. The manner in which this probate sale takes place is primarily determined by the administration authorities given to you by the court.
Personal representatives with independent administration powers conduct probate sales in the same way as regular sales do, with only minor variations in contracts, paperwork, and disclosures.
If you only have dependent administration rights, your probate property sale will require court approval before it can close. In these cases, a real estate agent with probate expertise and training is very critical.
Your attorney will present the offer you've accepted during the confirmation hearing, but the court will not automatically accept it. The court initiates the overbid procedure to guarantee that the property sells for the greatest feasible price.
Overbidding works similarly to an auction, with the court beginning the bidding process at a percentage higher than the offered offer. At the hearing, the court will accept the best offer and confirm the sale.
Once the proceeds from the property sale are put in the estate account, they can be used to settle estate debts such as taxes and creditor claims. Any residual funds will be given to the estate's beneficiaries when the estate is closed.
Closing the Estate
When all debts have been paid, the home has been sold, and the distribution of tangible personal property has been completed, the estate is ready to be dissolved and closed.