Attempting to sell a house in probate can be challenging for several reasons. The main goal of the probate process is to settle the affairs of the deceased and transfer ownership of property, including real estate, to any remaining heirs. The amount of time this takes depends mainly on the complexity of the estate.
To answer the initial question of can you sell a house in probate? The answer is “yes, you can,” however, the process is not easy and will involve a substantial investment of time and know-how. Laws regarding probate will vary by state and occasionally by the local jurisdiction.
Working through the probate process on your own is, of course, an option. But using the services of an experienced, licensed real estate professional who has been through the probate process many times before will save you a lot of time and unnecessary aggravation.
The Probate Process
There are a few reasons why a home will end up in probate. Typically when a person dies without leaving a will, the probate court will step in to determine the distribution of the person’s assets. This happens much more often than many realize since a recent Gallup poll from May 2020 reported that a staggering 68% of Americans do not have a will. Not having a will leaves their loved ones at risk of being involved in a complicated probate process to settle their estate.
Having a will is not a 100% guarantee for avoiding probate, but a will does make the process much easier and a lot less expensive.
Of the American’s who have a will, less than 10% are below the age of 60. Without a last will and testament or a trust, there is no way to ensure that your home and other personal property will be divided according to your wishes after death.
In some states, when a property owner dies, regardless of whether or not there was a will, the property must go through the probate process. But a legally binding will make the situation much faster and more accessible for everyone concerned.
How Long Does Probate last?
The home, along with any other property, is considered “in probate” for as long as it takes the probate court to locate the closest living relative of the deceased and name an executor or estate administrator. The executor or administrator will have the job of carrying out the wishes of the person who has died, and the property will be “out” of probate when all matters have been settled. The current nationwide average time to settle probate is nine months, but a complex case can take years.
The cost for probate can quickly run into the thousands. Court costs to sort out the estate, inspection costs for the home, survey fees for the property, and of course, legal fees are some of the more common expenses of estates going through probate, along with any back taxes or other costs that will need to be paid to complete the process. Current estimates put the amount American’s are spending on probate at around $2 billion per year.
Several adverse situations can happen when an individual inexperienced in probate attempts to work through the process.
Avoiding Probate
For some cases, probate cannot be avoided due to regulations, but probate is certainly avoidable for most situations. With a bit of preparation beforehand, you can spare your loved ones from dealing with the headaches of a long, expensive probate situation.
Consider giving your real estate and personal property to loved ones before death is one way of ensuring that the estate is divided according to your wishes. An attorney experienced in these matters can help get things set up for substantial items, like a house or a plot of land.
Your Bank May Be Able to Help
If there are funds in a savings account or CD that you want to go to the correct person, your bank can assist you with this. The individual in question will have to be named a designated beneficiary to receive the money in those accounts after your demise.
Many married couples hold joint accounts, and this is beneficial if one spouse happens to outlive the other. These accounts are usually set up with a right of survivorship that will simplify things for the surviving spouse during what is sure to be a challenging time.
Establishing a living trust is one of the simplest ways to avoid probate, particularly real estate. A living trust provides for the beneficiaries directly so, and there is no probate and no probate fees. Items held in the trust are not part of your estate; they belong to the trust.
Selling a House in Probate
If you are in the position of selling a house that is in probate, there are a few pitfalls that you’ll want to look out for before placing the house on the market. Taking the wrong step at this point could cost you thousands.
Real estate in probate is under the probate court’s jurisdiction, which means no action can be taken on those items without the probate court’s permission. The judge will be the one to make any significant decisions on the distribution of the property. Selling a house without notifying the court can have serious legal consequences.
Ensuring that the house is occupied during probate is a great idea. Occupancy in the home will ensure that basic maintenance tasks are handled promptly. A place with a resident is less likely to be broken into or vandalized. There may also be negative consequences with the insurance company insuring the house if it is vacant for an extended period.Selling a house in probate can be a complicated process. Many people in this position rely on the services of an experienced, trusted professional to protect their interests. Choosing to work with a professional is a wise decision that will help you avoid costly mistakes later on.
Brianna Hansen has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers).