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When someone passes away, dealing with their real estate becomes a necessary part of managing their estate. However, selling property after someone’s death is not a straightforward process and involves legal procedures, particularly when the deceased person’s will is yet to be probated. In this blog post, we will delve into the intricacies of buying property from a deceased person, exploring the risks and procedures involved.

Buying Property from a Deceased Person: Understanding Probate

Probate is a legal term that refers to the process of applying to the Surrogate Court to obtain an order recognizing the deceased person’s last will and testament and identifying the beneficiaries, executors, trustees, and others involved in the estate. Until the court issues a grant of probate, no one has the legal authority to represent or act on behalf of the deceased person’s estate. This grant is essential when it comes to real estate transactions because, in most cases, it is required to transfer title ownership.

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Selling Homes Without a Will or Before Probate: Risks and Strategies

If a person passes away without a will, a situation known as intestacy, the process of selling their real estate is quite like probate. In this case, court permission is still needed to sell the property, but the process and the specific forms involved may vary slightly. Instead of a grant of probate, the court issues a letter of administration in cases of intestacy.

From a strictly legal perspective, selling a home after someone’s death can only occur after the court has granted probate or issued a letter of administration. However, there are alternative options with varying degrees of legal risk for those looking to expedite the process.

Selling a property before probate carries certain risks, not only for the person selling the home but also for real estate agents involved in the transaction. These risks can include:

  1. Discovery of a New Will: If a new will emerges after the sale, with different beneficiaries or executors, it can lead to legal complications.
  2. Beneficiary Preferences: The will may specify that the property should go to a particular beneficiary, not be sold for cash. This can cause disputes and legal challenges.
  3. Family Law and Dower Rights: In some cases, family law contracts or dower rights may take precedence over the will, giving someone else priority in terms of the property.
  4. Beneficiary Desires: A beneficiary might express a strong desire to keep the property rather than accepting the sale proceeds.
  5. Lack of Authorization: The person attempting to sell the property might not have the legal authority to do so.

How to Sell a Home After Someone’s Death Before Probate

Several options are available for selling estate homes after the owner’s death, each with its own set of risks. It is crucial to consult with a wills and estates lawyer to understand these risks fully. Some options include:

  1. Limited Grant of Probate: This allows for the sale of the property only and is a relatively new system designed to expedite the process. The estate applies for full probate later to distribute the proceeds.
  2. Probate Seller’s Condition: The sales contract can include a condition that the sale is contingent on the court granting probate. The condition can be waived once probate is obtained.
  3. Tenancy at Will: The person handling the estate may decide to sell the property without court authorization, but this option carries risks. The contract should include terms outlining what happens if probate is not obtained by the scheduled possession date.
  4. Fast Probate: The quickest way to secure probate for selling estate homes after death is through a limited grant of probate, which typically takes 2-3 weeks to obtain.
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Selling Estate Real Estate: Factors to Consider

When selling real estate owned by an estate, several factors come into play. Here are some key considerations:

  1. The Grant: Property held as “joint tenants” can be transferred immediately after one person’s death. Otherwise, a grant from the court is required to deal with any interest in land owned by the deceased person.
  2. Beneficiaries: Consider the age and consent of beneficiaries. If any beneficiaries are under 18 or incapacitated, their consent may be required. Family dynamics and agreements among beneficiaries can also affect the sale.
  3. Will and Estate Directions: Examine the deceased person’s will for specific directions regarding the real estate, including conditions, timing, and beneficiaries’ preferences.
  4. Dower Rights: Be aware of potential Dower Act claims, which grant a surviving spouse a life estate in the property.
  5. Outstanding Claims: Address any claims against the property, such as unpaid debts or agreements made by the deceased.
  6. Tax Considerations: Consult with a tax advisor to understand any potential capital gains tax implications.
  7. Property Condition: Clean up and maintain the property for sale, considering whether renovations are needed.
  8. Tenants or Occupants: Address any tenants or occupants and their rights, especially if rent is involved.

Ongoing Issues to Address

In addition to the above considerations, several ongoing issues need attention when selling estate property:

  • Building Insurance: Maintain insurance on the property and ensure the insurer is informed if the property is vacant.
  • Utilities: Arrange for payment of ongoing utilities and property taxes.
  • Security: Ensure the property is checked regularly for security purposes, especially if it is vacant.

The Sale Process

Selling estate property can be complex, and it is advisable to work with a professional realtor who understands the nuances of estate sales. Offers received must be accepted by those granted authority by the court, and approval may be required from the Public Trustee in cases involving minor beneficiaries. While consent from beneficiaries may not be needed for sales solely for distribution purposes, specific clauses can address the sale’s terms if a grant has not been obtained.

Conclusion

Buying property from a deceased person involves a series of legal procedures and potential risks. It is essential to navigate these complexities carefully, consulting with professionals and ensuring all legal requirements are met to facilitate a smooth and legally sound transaction. Whether you are an executor or a potential buyer, understanding the procedures and risks involved is crucial in the process of selling or buying property after someone’s passing.

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