What is probate?
Probate is the process by which legal title of property is transferred from the decedent's estate to his/her beneficiaries. Since you can't take it with you, the court determines who gets it.
If a person dies with a Will ("testate"), the probate court determines if the Will is valid, hears any objections to the Will, orders that creditors be paid and supervises the process to assure that property remaining is distributed in accordance with the terms and conditions of the Will.
If a person dies without a Will ("intestate"), the probate court appoints a person to receive all claims against the estate, pay creditors and then distribute all remaining property in accordance with the laws of the state. The major difference between dying testate and dying intestate is that an intestate estate is distributed to beneficiaries in accordance with the distribution plan established by state law; a testate estate (after payment of debts, taxes and costs of administration) is distributed in accordance with the instructions provided by the decedent in his/her Will.
A tale of two paths....
The probate process takes one of two very distinct paths. A path that requires court confirmation and one that does not.
When court involvement is required, the home-buying and home-selling procedures are significantly different than that of a traditional sale. One can expect longer sale time and lower ability to react to market changes. Ultimately, this may lead to a lower sales price and less proceeds toward the estate.
Under the Independent Administration of Estates Act (IAEA), a designated adminstrator can partially or fully act on the behalf of the estate. This allows one person to sell real property within the estate without the supervision of the court. In this scenario, real property is sold in a similar manner as a traditional sale.
IAEA or court-confirmation required? Who or what determines this? Typically, this is outlined in the decedent's will or ordered by the court, upon the petition by a personal representative.
We'll help you navigate through the process
Come speak with our team of experienced agents, who are versed in the probate process and understands its impact on real estate, or meet with our in-house estate planning attorney for questions pertaining to the law.