Real Estate in Probate
DISCLAIMER: The contents of this article are intended to convey general information only and not to provide either legal advice or opinions. While FairSquare Home Buyers works with a team of attorneys on a regular basis, we are not licensed to practice law, and as such, the contents of this article, as well as the posting and viewing of the information contained within this article, should not be construed as, and should not be relied upon for, legal or tax advice in any particular circumstance or fact situation. No action should be taken in reliance on the information contained within this article, and an attorney should be contacted for advice on specific legal issues. Should you need such a referral, please feel free to reach out to us.
Selling property during probate can be a long, drawn out process during an already stressful and emotional time, which can be further complicated if the decedent did not have an estate plan. It is always advisable that families retain legal counsel with extensive experience in this field of law to assist them with this process. If you are facing probate due to the loss of a loved one, please know that we at FairSquare House Buyers work with several experienced attorneys who are available to help guide you through the steps.
Real Estate and Probate – Overview
At FairSquare House Buyers, we will believe the best decisions are informed decisions. Dealing with the loss of a loved one is often compounded by the stress of handling the estate. Oftentimes there are assets, like Real Estate, that are inherited but must go through the probate process before a benefactor can take possession. We have provided an overview of the probate process below to help you understand what will happen if you are faced with this situation.
- What is probate?
- How does the probate process start?
- What happens throughout the process?
- When does it end?
- When can I sell my inherited property?
- How do I get my inherited property ready to sell?
What is probate?
Probate is the legal process for reviewing the assets of a deceased person and determining inheritors. After an asset-holder dies, the court appoints either an executor named in the will or an administrator (if there is no will) to administer the process of probate. This involves collecting the assets of a deceased person to pay any liabilities remaining on the person’s estate, and to distribute the assets of the estate to beneficiaries.
How does the probate process start?
First, you will need to determine whether probate is even necessary to handle the decedent’s estate, and one of the primary factors in this decision is if the estate has property that must pass through the probate process to legally pass on to the decedent’s heirs.
“Non-probate” property includes items that pass from the decedent to another person by a mechanism other than through probate. These items can include any of the following:
- Property that the decedent owned as joint tenants with right of survivorship with another person who is still alive, such as joint bank accounts and certain kinds of real estate. In those situations, upon the death of a joint owner, the decedent’s interest in jointly-owned property automatically passes to the surviving joint owner outside of probate.
- Assets such as retirement plans and life insurance policies that have beneficiary designations as part of the property contract. These items are distributed directly to the designated beneficiaries by the retirement plan or insurance company.
- Bank or investment accounts with “pay on death” or “transfer on death” features. These allow the owner to designate beneficiaries to receive these assets upon the account holder’s death, and these are transferred directly to the designated persons outside of probate.
- Properties that have been transferred into a trust prior to the decedent’s death. After the decedent’s death, these are handled and managed as provided for within the trust documents.
Typically, anything not described above is considered “probate” property, and it requires the Court to transfer ownership of these items to third parties.
What happens throughout the process?
Once you’ve determined whether probate is necessary, then you must gather the information necessary to start this process, including, but not limited to, the following:
- The Last Will and Testament of the decedent (if one exists);
- Any and all known property and assets owned by the decedent;
- Any and all known debts of the decedent; and
- Identifying all beneficiaries of the estate.
An attorney skilled in the probate process in Kentucky can advise you as to the full list of everything you need to gather prior to starting.
If you determine that probate is necessary, the process begins in Kentucky with the preparation of a Petition for Probate that is filed with the District Court in the county in which the decedent lived when they died. This Petition provides the Court with basic information regarding the estate, such as the decedent’s identity, date of death, whether a Will exists, the decedent’s next of kin, the proposed Executor or Administrator, and an estimate of the estate property and value.
Once this is filed, a hearing is scheduled for the judge to review the submitted documents to determine their validity, as well as to appoint the Executor or Administrator. Usually, the official representative of a decedent’s estate is called an Executor (or Executrix when the representative is a female) when the decedent died with a valid Last Will and Testament in place (in that case, the decedent died “testate”), and the official representative of a decedent’s estate is called an Administrator (or Administratrix when the representative is a female) when the decedent died without a will (in that case, the decedent died “intestate”).
When the Court appoints an Executor (or Administrator), that individual has the responsibility of administering the estate in accordance with both the law and the Will (if applicable). This includes having access to bank account information, authority to take legal positions and settle legal issues regarding the estate, and authority to take control over the decedent’s probate assets, including the sale of any real estate. Within sixty (60) days, the Executor must file an inventory of assets with the Court, listing the estimated value of the decedent’s assets at the time of death, and they must also provide notice of the open probate matter to all creditors of the decedent’s estate, as well as to potential heirs and beneficiaries. The estate must remain open for at least six (6) months to allow creditors to make claims against the estate, and all claims deemed valid by the Court must be paid out of the estate’s assets. If the estate is “financially sound,” the estate will pay the debts and costs of administration in full, and then distribute the remainder of the assets to the beneficiaries. In certain circumstances, an Executor (or Administrator) of an estate may sell probate assets – such as real property – to make cash available to pay any debts.
When does it end?
After all administrative tasks have been completed, the estate will need to be closed with the Court, at which time the Executor will be discharged and relieved from any further responsibility, and in Kentucky, estates can be closed by either an informal final settlement process or a formal final settlement process. An informal final settlement involves the filing of a simple form in which the Executor informs the Court that the estate administration is complete, and documents are submitted to the Court, signed by the beneficiaries, indicating their satisfaction with the estate administration. Based on the filing of these documents, the Court will usually issue an Order closing the estate and discharging the Executor. A formal final settlement is far more complicated – it involves providing the Court, as well as any and all other parties having an interest in the estate, complete information about the administration of the estate, including an accounting of the estate’s financial transactions. Parties with an interest in the estate then have an opportunity to present any objections they may have, and the court holds a hearing to resolve the objections.
When can I sell my inherited property?
Once all debts have been paid and the estate has been closed, any inherited assets you received (including real estate) is now officially owned by you. At this point you have the ability to sell the property.
How do I get my inherited property ready to sell?
Oftentimes when you receive an inherited property from a loved one, the property is in need of work – outdated kitchens and baths, interior and exterior repairs, old furniture and belongings that need to be cleaned out. Dealing with your grief is already stressful enough. Adding the stress of preparing a house to sell can be a taxing process.
At FairSquare House Buyers, we want to help make this an easy, stress-free and fast process so you can move on with your life. We have worked with many clients who have recently inherited property and. We will purchase your property as-is, no repairs or renovations needed. Worried about what to do with unwanted furniture or junk left in the house? No problem! We will clean out the house for you. After speaking with us, we will provide you an all cash offer within a day. Please call us 502-417-7467 or send us a message any time to discuss your inherited property.
Please keep in mind that this is a simplified summary of the probate process in Kentucky, and that experienced legal counsel should always be consulted and retained to assist you with these matters. The owners and employees of FairSquare House Buyers are here to assist you during this difficult time to help make this process easy. Please call us today or send us a message should you need help selling your probate property in Louisville!